Logo of Phnom Penh Post newspaper Phnom Penh Post - Tobacco deal leaves farmers out

Tobacco deal leaves farmers out

A farmer inspects tobacco plants at a farm in the Kingdom’s Tbong Khmum province in 2014.
A farmer inspects tobacco plants at a farm in the Kingdom’s Tbong Khmum province in 2014. Vireak Mai

Tobacco deal leaves farmers out

It has been more than six months since Vietnam agreed to waive duties on 3,000 tonnes of Cambodian dried tobacco exports per year, yet local smallholder tobacco farmers claim the agreement has done little to improve their incomes, with some accusing large tobacco companies of hoarding all the profits.

The duty-free exemption on tobacco came as part of a bilateral trade enhancement agreement signed last October that gave special preferential treatment to 39 export items from Cambodia and 29 items from Vietnam. Under the deal, Cambodian tobacco producers could apply for licences to export up to 3,000 tonnes of dried tobacco per year to Vietnam duty-free in 2016 and 2017.

The agreement was widely expected to stimulate exports, with smallholder farmers benefitting from higher prices and demand from traders looking to fill the quota.

However, Som Ra, head of the Krouch Chhmar district agricultural office in Tbong Khmum province, said tobacco prices have remained stable since the quota deal and he questioned whether anybody had actually benefitted from it.

“If a deal for 3,000 tonnes [duty-free] to Vietnam existed, I would expect prices to rise and more competition in the market, but so far nothing has changed from the Vietnamese side,” he said.

He added that most tobacco farmers in his district were selling their leaves to British American Tobacco (BAT) or Chinese dealers.

Chhin Buntheourn, a smallholder tobacco farmer in the Kong Meas district of Kampong Cham province, said he was disappointed that the quota deal had done little to improve his income.

“I initially expected that the price of tobacco would increase, but until now we continue to struggle with the same low price,” he said, adding that the market rate on fresh tobacco leaves has remained unchanged at between 300 and 400 riel per kilogram.

Buntheourn said he suspected that large tobacco firms had obtained the export permits but were not passing along any of the profits to smallholder farmers.

“The bilateral agreement only benefits the big companies and has not offered any better price for us,” he said.

Chhay Sokhon, who cultivates tobacco on his 2.5 hectare farm in Krouch Chhmar district in Tbong Khmum province, expressed similar sentiment, adding that market prices were dictated by smooth-talking traders.

“When I heard the news I expected that I would receive a good price this year for my crop, but nothing has changed,” he said. “Any fluctuation in the price is the result of bargaining.”

Kim Sarourn, director of Kampong Cham’s Provincial Agriculture Department, said farmers saw better yields this year, but the agreement has done little to open new markets.

“I haven’t heard of any new markets,” he said. “Demand from the Vietnamese side remains the same and there is really only BAT contracting with farmers.”

Almost all tobacco grown in Cambodia is cultivated in the adjacent provinces of Kampong Cham and Tbong Khmum. The provinces have about 5,000 and 1,000 hectares of tobacco under cultivation, respectively, yielding on average 1.5 tonnes per hectare.

MOST VIEWED

  • PM responds to Rainsy ticket claims

    Prime Minister Hun Sen on Monday expressed frustration over claims by Sam Rainsy that he had altered Rainsy’s ticket with Thai Airways to prevent him boarding his November 7 flight to Thailand, from where he had claimed he would enter Cambodia. Hun Sen made the

  • Phnom Penh International Airport wins award as passenger traffic soars

    The Phnom Penh International Airport has been awarded Best Asia Pacific Regional Airport 2019 for its sustained high growth in passenger traffic in recent years. The award was presented by the Capa Centre for Aviation (Capa) – a world-leading and trusted organisation that provides market intelligence to

  • PM urges ‘democracies’ to learn from horrors Cambodia faced

    Prime Minister Hun Sen on Tuesday chided countries that he said declared themselves a democracy while supporting a military coup that eventually gave birth to the Khmer Rouge regime. Speaking during the 2nd Asia-Pacific Summit at the Peace Palace, Hun Sen said without naming those

  • Princess Buppha Devi passes away aged 77

    Princess Norodom Buppha Devi, who was famous for her skills and key roles behind the Kingdom’s Royal Ballet, passed away on Monday from unspecified illness at a hospital in the Thai capital Bangkok, according to the official Facebook page of King Norodom Sihamoni. “May

  • PM: Request for release of plotters not due to pressure

    Prime Minister Hun Sen on Saturday said his request to have the supporters of former opposition leader Sam Rainsy and his “coup plot” released on bail was not made under international pressure. Speaking at the groundbreaking ceremony for the construction of 34 roads in Preah Sihanouk

  • Ministry deplores RFA report on EBA

    The Ministry of Foreign Affairs and International Cooperation on Friday deplored as fake news a Radio Free Asia (RFA) report that it had received a copy of the European Commission’s assessment on the human rights situation in Cambodia as part of the Everything But