Cambodian farmers will get high benefits from sub-degree on contract farmings

Cambodian farmers will get high benefits from sub-degree on contract farmings


Ministry of agriculture, forestry and fisheries on July 29 started debating a sub-decree on contract farming and productions that will protect and provide the huge benefits for local farmer, standing about 85 per cent of total population and most living at rural.

“The main purpose of the sub-decree is to define the implementing framework for contract farming in order to enhance and expand the responsibilities as well as building trust and confidence in purchasing and supplies and other services, in particular focusing on contribution to risk reduction in agricultural business and productions, promoting farmers to from agricultural cooperatives, where mobilized all existing means and production forces to take role as investment partners with private sectors, cable in technique and capital resources, enhancing mutual trust among contract farming parties, ensuring agricultural production supply in turn of quantity, quality, safety, standard, market and domestic and foreign competiveness, contributing to the implementations of the Cambodia government’s strategies in promoting sustainable agriculture and agro-industry development,” Dr Chan Sarun told the consultation workshop at the ministry.

“The draft of sub-decree of contract farming aims to respect to the end of the farmers and producers whose techniques, capital funds and markets remain weak, especially targeting to ensure purchasing and supplying of agricultural products –quantity and quality, processing and exporting. Contract farming is a new form rationalized to promote understanding and has impact on agricultural and agro-industrial development trends,” Dr Sarun added.
“It is also a mean for organizing commercial based farming for small and large farms, where method has been extensively and gradually implemented in various countries in the world, potentially for agricultural sector and market liberalization,” Dr Sarun noted.

He added the increase in demands for fast food restaurants and supermarkets required expansion and promotions in vegetable and crop farming, cereal productions as well as animal raising and aquaculture to meet the domestic and global markets demands –raw and processed.

“The sub-decree on contract farming would build on mutual trust among farmers, producers and agri-business companies in implementing the process would also contribute to generating revenues by both parties, in addition to reducing risks and uncertainties in productions and agri-business,” the minister added.
“We already discussed with private sectors and now we need to consult with other stakeholders to finalize and sooner we will hand over it to the government to be approved for effective use,” he continued.
He highlighted that Cambodian government has always considered agricultural sector as a priority area in its platform, in which this sector plays a significant role in promoting national economic growth. Through the promotion of the productivity and agricultural diversification-a key strategic action in the rectangular strategy phase two of the royal government of Cambodia-has mobilized foreign and domestic investors to invest in agricultural sector through maximizing incentives and encourage for poverty reduction, development and economic growth, where private sectors would play a key role in this area.
He states It is remarkable that even in circumstances such as global financial crisis, drought, rained flood, Ketsana storm and insects’ destruction, with appropriate policies in addition to the government’s private sectors’ and development partners’ effort , in particular the extensive rice farming. Contract farming has contributed to the improvement of quality and production yields on top of better processing capacities for domestic consumptions and exports and promotion of other crops to response to regional and global markets.

“In overall, we overcome all the worst circumstances –global financial crisis and economic downturn and able to maintain that the GDP 2009 increased positively due that the agricultural sectors and services were able to maintain their growth –in this foundation, the food security has been increased and cable to export up to more than 2.2 million tons, the minister said, adding that this increase has confirmed that the agricultural sectors contribute to the reductions of the impact crisis, and in the long-run, agricultural sectors are still being the solid foundation for promoting economic growth.
“The real agricultural business’s situation and agricultural product markets, we see that there are still weakness, namely production are still unorganized, supplies are still limited-in turn of quality and quantity –due to lack of wholesale systems, making barriers to the flows of farmers products into the markets, and difficulties for the investment companies to collect buy at largest scales for processing or exports,” He noted
He said that in the supply chains, most farmers and produces do not sell their products directly to the major companies –but to different layers of middlemen-making them losing a lot of profits due to low price purchasing by those people.

“Furthermore, it was noted that there were also failed to respect their agreement due to that there were no legal support documents which created distrust and weak contract respect as well as negative impacts on foreign investments,” He maintained. He added having seen the challenges; the government has supported policy on contract farming and under the ideal guidance by Samdech Prime Minister Hun Sen has drafted the sub-decree on contract farming. The ministry has contributed to strengthening better business and investment environments particularly ensuring sustainability, enhancing legal frameworks and polices and continuous and gradual eliminations of administrative bureaucracies.

“Experiences in developed countries proved that the implementation of contract farming has provided a lot of advantages to farmers, investors and governments. Indeed, farmers would receive agricultural materials supplies, credits, techniques and skill trainings, price confirmation, market stabilities and other services from partners through this contract. On the top of this, farmers are capable to transform from less productive farming to extensive ones to serve market demands. Also, investors would be able to gain trust and better make decisions in production cooperation with farmers,” He viewed.

Cambodia’s agricultural products supported domestic markets and remaining have exported to neighboring countries through middle dealers and through this way, local farmers earned less and forced local people to abandon the agricultural cultivations and then they started seeking job as migrant workers. And finally they have faced risk of human trafficking.
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