Ministers Approve Regulation for Contract Farming

Chun Sakada, VOA Khmer
Phnom Penh Monday, 14 February 2011

via CAAI

Photo: AP

Cambodia hopes to produce 1 million tons of rice for export by 2015.

“ [It] will eliminate middlemen and bring investors directly to meet farmers or farmer associations."

The Council of Ministers has approved a subdecree that it says will help farmers find markets for their products and create a major role for the Ministry of Agriculture in contract farming, officials said Monday.

The subdecree on contract farming, approved Friday by the council, aims to improve farming techniques and other aid to the agricultural sector. It would also help private companies organize farming to improve production quality and guarantee pricing.

“The subdecree allows a direct relationship between sellers and farmers in signing of contracts,” said Mao Sopheareth, director of the Agriculture Ministry’s industrial development department.

The subdecree will also “eliminate middlemen and bring investors directly to meet farmers or farmer associations,” he said.

Farmers have long complained of middlemen who earn much more for marked up goods. At the same time, agricultural experts say Cambodian production often lacks quality control that would allow more export to foreign markets. Cambodia hopes to produce 1 million tons of rice for export by 2015.

Nov Seiha, an economist at the Economic Institute of Cambodia, said farming contracts can be a key step in promoting the growth of agricultural production. However, the fluctuating price of rice and Cambodia’s small rice stocks remain a concern, he said.

Farming contracts have not worked in the past, because some farmers are able to sell at a high price from traders, he said.

However, Yong Saing Koma, head of the Cambodian Center for the Study and Development of Agriculture, said the subdecree was good for farmers overall because it regulates contracts.

“The farmers have a clear contract on the market, quality, quantity and standards with the sellers,” he said. “The company has clarity for buying their products with quality, quantity and standards.”