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Importance of contract farming reaffirmed

Farmers in Kampong Speu province plant paddy in a field.
Farmers in Kampong Speu province plant paddy in a field. Hong Menea

Importance of contract farming reaffirmed

A prominent local agro-industry veteran has reaffirmed the importance of striking and renewing contract-farming arrangements with growers and cooperatives to preserve agricultural production and value chains, especially the mutual benefits between farmers and exporters.

Song Saran, president and CEO of leading Cambodian milled-rice exporter Amru Rice (Cambodia) Co Ltd was speaking to The Post on June 25.

The term “contract farming” refers to pre-harvest agreements between farmers and buyers on agricultural production with predetermined terms, typically pertaining to product types, prices, volumes, quality, and other requirements.

Saran shared that Amru Rice and Cambodian Agriculture Cooperative Corporation Plc (CACC) two days earlier renewed their contracts with several cooperatives in Preah Vihear province, stepping up their orders of organic produce from 28,000 tonnes in 2022 to 43,770 tonnes in 2023.

He also reaffirmed his company’s commitment to contract farming in potentially lucrative provinces to improve agricultural value chains and linkages between farmers and buyers.

At the June 23 signing ceremony, Preah Vihear provincial governor Kim Rithy said the province plans for contract-farming agreements involving organic produce to the tune of 43,770 tonnes this year, including “18,760 tonnes” of paddy, 25,000 tonnes of cassava and 10 tonnes of peanuts.

He also affirmed that Preah Vihear’s cooperatives supplied more than 28,000 tonnes to exporters last year.

Rithy voiced support for the renewed contracts, which he said “will help prop up and maintain sustainability between suppliers and companies”. Additionally, he stressed, these partnerships will make a substantial contribution to the development of the province’s agricultural sector, particularly in terms of ensuring fair prices for its cooperatives.

Preah Vihear provincial Department of Agriculture, Forestry and Fisheries director Peung Tryda revealed that Amru Rice’s paddy contracts involve 21 cooperatives with more than 3,000 “producers”, and CACC’s cassava deals 10 cooperatives with over 1,400 producers.

For reference, there are 43 agricultural cooperatives in the northern province with about 10,000 households among their ranks, according to him.

Local media reports confirmed that a total of 31 cooperatives were involved in the deals, which when combined with Tryda’s assertions suggest that all of them signed a contract for either paddy or cassava, but not both. CACC is also apparently behind the contract for the 10 tonnes of peanuts.


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