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Tobacco prices hurt farmers

Tobacco farmers
Tobacco farmers in Kampong Cham province bundle their crops together in preparation for drying at the end of the harvest season in 2011. Sovan Philong

Tobacco prices hurt farmers

Tobacco farmers in Kampong Cham province are concerned over declining prices amid sluggish demand for the crop.

Chhay Vy, president of the Tobacco Farmers Association (TFA), said decreasing demand for Cambodia-grown tobacco from companies and Vietnamese buyers has resulted in a price fall during the 2014 harvest season to $1.25 per kilogram, down from $1.80 in 2013.

“2014 was not a good year for tobacco farmers,” Vy said.

“Prices have become lower compared to 2011 and 2013. Farmers are unable to make a profit on this pricing because planting tobacco requires time and labour, both before and after harvesting.”

A large quantity of Cambodian-grown tobacco is cultivated, semi-processed then sold onto British American Tobacco Cambodia (BAT) under a “contract farming” system, according to Vy. The remainder is exported to Vietnam through private buyers.

Of TFA’s 500 member family, about 300 have secured farming contracts with BAT. That number, however, could soon shrink.

“BAT cannot buy all of the tobacco from farmers. Their demand has also decreased. Meanwhile, demand from other local tobacco companies has decreased, and even private traders now do not want to buy from us as demand from Vietnam is also falling,” he said.

In response to Vy’s concerns, government officials say tobacco farmers should diversify their crops.

Chheang Chay, director of Kampong Cham Provincial Department of Commerce, said tobacco farmers in Vietnam are facing similar issues as smoking becomes less and less popular.

“Tobacco is a sensitive product due to health issues. We cannot promote it like other agricultural product,” Chay said.

“Farmers should plant other crops instead of tobacco because the smoking trend is becoming less popular and it is doubtful that it will again become popular.”

Sderng Trot, a farmer in Kampong Cham province, said despite having ideal growing conditions for tobacco crops, farmers in his area had begun to switch to other crops due to uncertainty over price.

“Farmers start planting vegetable and fruit in some parts of their tobacco farms,” he explained.

“But the soil here is not good for other crops such as corn, bean or sesame. Also, most of the farmers own only a small amount of land and we can earn more by planting tobacco on the same area,” he said.

Trot, who produces an average of 3 tonnes of tobacco per year, said he hoped prices will recover to about $2.50 per kilogram in 2015.

“I might want the price to increase so I can sell to the market, but that does not mean I encourage people to smoke,” he added.

Figures from agriculture provincial departments show that tobacco farming in Cambodia occupies about 11,000 hectares of land. The industry produces about 2.5 tonnes of tobacco per hectare.

Tobacco plantations are mostly found in Kroch Chhmar, Dei Doss, Kampong Cham, Koh Pen and Koh Sotin districts of Kampong Cham and Tbong Khmum provinces.

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