Contract Farming Schemes On The Rise: Ministry

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The Ministry of Agriculture said the number of contract farming schemes has increased this year as farmers and traders are more aware of the benefits of such agreements.

Kann Kunthy, representative of the Cambodian Agriculture Cooperative Cooperation, shakes hands with the representative of an agricultural cooperative during a ceremony in Phnom Penh yesterday. Amru Rice

Kong Pheach, director of agroindustry at the Ministry of Agriculture, said from January to July almost 60 contract farming schemes were signed in the rice sector, 20 more than during the same period last year.

In contract farming, buyers sign agreements with farmers for the production and supply of crops to be delivered at a future date, usually at predetermined volumes, qualities and prices.

Speaking yesterday at the agreement-signing ceremony for yet another contract farming scheme, Mr Pheach said so far this year rice millers have signed agreements with agricultural cooperatives from 10 provinces.

“Our priority is to increase the number of contract farming schemes in each province. Once such agreements are in place, farmers will be able to increase their production because they have guaranteed markets,” Mr Pheach said. “Establishing contract farming schemes is how we help small farmers increase production.”

Six big rice millers have already entered contract farming schemes with agricultural cooperatives, according to Mr Pheach, who added that once the contract farming model is more widely understood by farmers and rice millers, the number of such agreements will skyrocket.

Song Saran, the newly-elected president of the Cambodia Rice Federation, said CRF’s also aims to increase the number of contract farming schemes.

“We will keep up our work linking markets to farmers, particularly farmers who produce agricultural goods of great potential. We will continue connecting farmers to companies, particularly rice millers that are members of CRF,” Mr Saran said.

“Contract farming schemes enables market expansion through innovation. It also helps agricultural cooperatives maintain existing markets,” Mr Saran added.

Him Sothea, a farmer from an agricultural cooperative in Kampong Chhnang province, said that through contract farming schemes they have been able to find new buyers and sell their rice at a good price.

“Before we entered contract farming schemes, the price they offered us for our paddy was much lower; lower than the market price,” she said.

Ms Sothea’s cooperative supplies organic rice to Cambodian Agriculture Cooperative Cooperation through contract farming.

This article was originally published in the Khmer Times.