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KINGDOM OF CAMBODIA
CONTRACT FARMING
IN CAMBODIA
Ministry of Agriculture,
Forestry and Fisheries
Contents
• Introduction
• Agriculture and National Economic Development
• Agricultural marketing Constraints
• Contract Farming Situation in Cambodia
• National Policy Support on Contract Farming
• Sub decree on Contract farming
2
• Total area : 181,035.00 km2
• Population : 14,521,276 (2010)
• Population growth rate: 2,2%
• GDP per capita: 790USD(2010)
• 55% are under 20 years old
• Only 15% live in urban centers
• 73 inhabitants/km2
• 200.000 young people reach
employment age each year, mainly in
rural areas
3
Introduction
Cambodian National Economic Growth(2011)
28.4 %
30.5%
41.1%
2004 2005 2006 2007 2008 2009 2010 2011
Agriculture
(%)
32.1 33.4 32.8 31.6 30.6 33.5 29.0 28.4
Industry (%) 25.4 24.6 25.0 25.7 26.2 21.7 28.0 30.5
Services(%) 42.5 42.1 42.1 42.7 43.2 38.8 43.0 41.1
Crops Livestock Fisheries Forestry
2006 50.8% 15.8% 25.9% 7.5%
2007 52.2% 15.6% 24.8% 7.3%
2008 52.7% 15.5% 25% 6.9%
2009 52.9% 15.3% 25.2% 6.6%
2010 53.8% 12.8% 27.3% 6.1%
2011 54% 15% 25% 6%
Composition by Sub Sector in
Agriculture Sector
Rice Production
Descriptions 2007 2008 2009 2010 2011
Cultivated Areas(Ha) 2,585,905 2,615,741 2,719,080 2,795,892 2,968,529
Harvested Areas (Ha) 2,566,952 2,613,363 2,674,603 2,777,323 2,766,617
Yield (T/Ha) 2.621 2.746 2.836 2.970 3.173
Production (MT) 6,727,127 7,175,473 7,585,870 8,249,452 8,779,365
Rice Surplus (MT) 1,649,640 2,025,033 2,244,598 2,516,752 2,780,328
Paddy Surplus (MT) 2,577,562 3,164,114 3,507,185 3,932,425 4,344,263
Other Crop Production
Commodities 2006 2007 2008 2009 2010 2011
Maize 108,836 142,391 163,106 206,058 213,622 174,257
Cassava 97,918 108,122 179,945 160,326 206,226 391,714
Mung Bean 85,140 65,261 45,605 49,599 69,206 68,111
Soya bean 75,053 76,981 74,413 96,388 103,198 70,584
Total 4 main
Crops
366,947 392,755 463,069 512,370 592,250 704,666
Crop Marketing Constraints
in Cambodia
8
Crop Marketing Constraints in Cambodia
9
• Limited domestic demand
• No value addition capture
• No access to market or market channels not
known
• Lack of quality incentives and product
standards
• Competition with cheap imports (informal cross
border trade), especially VN and Thai
• Low reputation of Cambodian products
• No facilitators for market linkage between FOs
& Agri-companies
10
Crop Marketing Channel
Crop Marketing Situation in CambodiaCrop Marketing Situation in CambodiaCrop Marketing Situation in CambodiaCrop Marketing Situation in CambodiaCrop Marketing Situation in CambodiaCrop Marketing Situation in CambodiaCrop Marketing Situation in CambodiaCrop Marketing Situation in Cambodia
Farmers
Village Collectors
Exporters
District
Collectors
Local
consumptions
85-90%10-15%
11
Rice Marketing Channel
Farmers
Village Collectors
Exporters
District
Collectors
Local
consumption &
processors
50-60% as raw materials
40-50%
Crop Marketing Situation in CambodiaCrop Marketing Situation in CambodiaCrop Marketing Situation in CambodiaCrop Marketing Situation in CambodiaCrop Marketing Situation in CambodiaCrop Marketing Situation in CambodiaCrop Marketing Situation in CambodiaCrop Marketing Situation in Cambodia
12
Case study: Structure of the marketing
chain from catchment area of Soybean to Vietnam (120Km)
Producers (22,000)
Village middlemen
(about 1600)
District middlemen (about 400)
Inter-provincial middlemen (87)
Exporters (4 )
Vietnamese traders/buyers
Processors in
Kampong Cham
(26)
Middlemen in
Phnom Penh (5)
Main processors in
Phnom Penh (31)
Source: ACIAR organization in Cambodia (2006)
Crop Marketing Situation in CambodiaCrop Marketing Situation in CambodiaCrop Marketing Situation in CambodiaCrop Marketing Situation in CambodiaCrop Marketing Situation in CambodiaCrop Marketing Situation in CambodiaCrop Marketing Situation in CambodiaCrop Marketing Situation in Cambodia
13
Case study:Price of Soybean in the Marketing Chain ($/tonne) along a Trade Route from Bos
Knaor commune in Kompong Cham, through Neak Leang in Cambodia, to Taing Chov in Vietnam.
Trade route
US $ per tonne
Average
Mar
gin
Transpor
t and
fee
Loading,
Unloa
ding
Total Selling
Price*
Farmer gate price 550
Village middlemen 5 2 0 7 557
District middlemen 5 0 2 7 564
Inter-provincal middlemen (by
route)
5 2.5 2 9.5 573.5
Exporter in Neak Leang (by route) 5 7 2.5 14.5 588
Importer in Taing Chov (by boat) 12 15 3 23 611
Total 32 26.5 9.5 61
Price of Cassava Chip (US$/t)
14
Crop Marketing Situation in CambodiaCrop Marketing Situation in CambodiaCrop Marketing Situation in CambodiaCrop Marketing Situation in CambodiaCrop Marketing Situation in CambodiaCrop Marketing Situation in CambodiaCrop Marketing Situation in CambodiaCrop Marketing Situation in Cambodia
Contract Farming Situation
in Cambodia
15
National Policy Supported CF and Partnerships
• National Strategic Development Plan (2009-2013, para.396)
• Strategy for Agriculture and Water 2010-2013(SAW 2010,
para.116,301, 308,313)
• RGC’s policy paper on the Promotion of Paddy Production
and Rice Export (2011-2015) ( page 11)
• Sub decree on Contract Farming (promulgated Feb, 2011)
• Currently, PM requested to implement the link SLCs
programs and ELCs through contract Farming ( during addressing
at the inauguration of the new building of the MLMUPC, date 9th, Feb, 2012)
16
Contract Farming Situation in Cambodia
Sub Decree of Contract
Farming (SDCF)
17
Contract Farming Situation in Cambodia
Objective of SDCF
(Article 2,Charpter 1)
• Strengthening the responsibility and trust between
producing and purchasing parties base upon the
principles of equality and justice.
• Ensuring the accuracy of the prices, purchases,
and supply of agricultural products, both quantity
and quality
• Increase purchasing, processing and exporting of
agricultural products
• Contribute to national economic development and
people’s poverty reduction pursuance of the
policies of the Royal Government 18
Sub decree on Contract farming
Application (Article3, chapter 1)
This sub-decree has its scope that applies all types of
agricultural production business under the contract-based
agricultural production
19
Sub decree on Contract farming
MAFF to be lead body (article 5,6 , Chapter 1)
Producers
(Farmers)
Purchasers
( Agribusiness firm)
Contract Farming
• MAFF shall be the lead institution in
communicating, coordinating, and provided
expertise services in order to facilitate the
contract-based agricultural production
development.
• MAFF shall monitor and evaluate all of these
functions and reports to RGC .
MAFF
20
Sub decree on Contract farming
Establishment of CF Coordination
Committee (Article 7, Chapter 2)
Producers
(Farmers)
Purchasers
( Agribusiness firm)
Contract Farming
CF
Coordination
Committee
(MAFF + 17 Relevant
Organizations )
Develop policy, strategic plan aim at the promotion of the CF
To facilitate and strengthen the harmonization between parties to CF
To intervene or reconcile argument or conflict that might be occurred
from the implementation of the CF that expertise institution is unable
to settle or conflict which required settlement of the inter-institutions
DAI as its
assistant
21
Sub decree on Contract farming
Rights and Obligations of Producers & Purchasers
( Article 8,9 , Chapter 3)
Producers ( farmers)
• To comply with conditions as inscribed
in the agreement
• To proceed production activities based
on seasonal and required timeframe
• To supply on time , in term of grade,
quantity, and quality and due timeline
• To accept the payment of product value
as set in agreement
Purchasers ( Agribusiness firm)
• To comply with conditions as inscribed in
the agreement
• To determine the commodity items such
as quantity, quality , place, and date of
delivery and acceptance of the
commodities
• To provide agricultural materials such as
vegetable or crop seeds, animal breeds ,
and provided credit advance, technical
services, etc
• To pay by specific unit –based products
and quality as agreed prices
• To pay the commodities to producing
party as specifying under the conditions
and at specific timeframe as agreed upon
.
Contract Farming
22
Sub decree on Contract farming
In Conclusion : The SDCF will engage for
mutual benefit to both producer and purchaser party
Producers
• Inputs and production services
are provided
• Access to credit
• Skill and technology transfer
• Assured market outlet
• Stabilized income
Purchasers
• Reliable supply of raw materials
• Overcoming land constraints
• Greater conformity to desired
quality and safety standards
• Labor cost/ issues reduced
Contract Farming
23
Sub decree on Contract farming
Thank you for your
attention
24
Contact Person :
- Dr. Mao Sopheareth, Tel: 012 77 54 97 , E-mail: maosopheareth@hotmail.com
- Mr. Yi Bunhak , Tel: 017 59 69 16 , E-mail: yihak54@yahoo.com
Department of Agro-Industry,
Ministry of Agriculture, Forestry and Fisheries

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CONTRACT FARMING IN CAMBODIA

  • 1. KINGDOM OF CAMBODIA CONTRACT FARMING IN CAMBODIA Ministry of Agriculture, Forestry and Fisheries
  • 2. Contents • Introduction • Agriculture and National Economic Development • Agricultural marketing Constraints • Contract Farming Situation in Cambodia • National Policy Support on Contract Farming • Sub decree on Contract farming 2
  • 3. • Total area : 181,035.00 km2 • Population : 14,521,276 (2010) • Population growth rate: 2,2% • GDP per capita: 790USD(2010) • 55% are under 20 years old • Only 15% live in urban centers • 73 inhabitants/km2 • 200.000 young people reach employment age each year, mainly in rural areas 3 Introduction
  • 4. Cambodian National Economic Growth(2011) 28.4 % 30.5% 41.1% 2004 2005 2006 2007 2008 2009 2010 2011 Agriculture (%) 32.1 33.4 32.8 31.6 30.6 33.5 29.0 28.4 Industry (%) 25.4 24.6 25.0 25.7 26.2 21.7 28.0 30.5 Services(%) 42.5 42.1 42.1 42.7 43.2 38.8 43.0 41.1
  • 5. Crops Livestock Fisheries Forestry 2006 50.8% 15.8% 25.9% 7.5% 2007 52.2% 15.6% 24.8% 7.3% 2008 52.7% 15.5% 25% 6.9% 2009 52.9% 15.3% 25.2% 6.6% 2010 53.8% 12.8% 27.3% 6.1% 2011 54% 15% 25% 6% Composition by Sub Sector in Agriculture Sector
  • 6. Rice Production Descriptions 2007 2008 2009 2010 2011 Cultivated Areas(Ha) 2,585,905 2,615,741 2,719,080 2,795,892 2,968,529 Harvested Areas (Ha) 2,566,952 2,613,363 2,674,603 2,777,323 2,766,617 Yield (T/Ha) 2.621 2.746 2.836 2.970 3.173 Production (MT) 6,727,127 7,175,473 7,585,870 8,249,452 8,779,365 Rice Surplus (MT) 1,649,640 2,025,033 2,244,598 2,516,752 2,780,328 Paddy Surplus (MT) 2,577,562 3,164,114 3,507,185 3,932,425 4,344,263
  • 7. Other Crop Production Commodities 2006 2007 2008 2009 2010 2011 Maize 108,836 142,391 163,106 206,058 213,622 174,257 Cassava 97,918 108,122 179,945 160,326 206,226 391,714 Mung Bean 85,140 65,261 45,605 49,599 69,206 68,111 Soya bean 75,053 76,981 74,413 96,388 103,198 70,584 Total 4 main Crops 366,947 392,755 463,069 512,370 592,250 704,666
  • 9. Crop Marketing Constraints in Cambodia 9 • Limited domestic demand • No value addition capture • No access to market or market channels not known • Lack of quality incentives and product standards • Competition with cheap imports (informal cross border trade), especially VN and Thai • Low reputation of Cambodian products • No facilitators for market linkage between FOs & Agri-companies
  • 10. 10 Crop Marketing Channel Crop Marketing Situation in CambodiaCrop Marketing Situation in CambodiaCrop Marketing Situation in CambodiaCrop Marketing Situation in CambodiaCrop Marketing Situation in CambodiaCrop Marketing Situation in CambodiaCrop Marketing Situation in CambodiaCrop Marketing Situation in Cambodia Farmers Village Collectors Exporters District Collectors Local consumptions 85-90%10-15%
  • 11. 11 Rice Marketing Channel Farmers Village Collectors Exporters District Collectors Local consumption & processors 50-60% as raw materials 40-50% Crop Marketing Situation in CambodiaCrop Marketing Situation in CambodiaCrop Marketing Situation in CambodiaCrop Marketing Situation in CambodiaCrop Marketing Situation in CambodiaCrop Marketing Situation in CambodiaCrop Marketing Situation in CambodiaCrop Marketing Situation in Cambodia
  • 12. 12 Case study: Structure of the marketing chain from catchment area of Soybean to Vietnam (120Km) Producers (22,000) Village middlemen (about 1600) District middlemen (about 400) Inter-provincial middlemen (87) Exporters (4 ) Vietnamese traders/buyers Processors in Kampong Cham (26) Middlemen in Phnom Penh (5) Main processors in Phnom Penh (31) Source: ACIAR organization in Cambodia (2006) Crop Marketing Situation in CambodiaCrop Marketing Situation in CambodiaCrop Marketing Situation in CambodiaCrop Marketing Situation in CambodiaCrop Marketing Situation in CambodiaCrop Marketing Situation in CambodiaCrop Marketing Situation in CambodiaCrop Marketing Situation in Cambodia
  • 13. 13 Case study:Price of Soybean in the Marketing Chain ($/tonne) along a Trade Route from Bos Knaor commune in Kompong Cham, through Neak Leang in Cambodia, to Taing Chov in Vietnam. Trade route US $ per tonne Average Mar gin Transpor t and fee Loading, Unloa ding Total Selling Price* Farmer gate price 550 Village middlemen 5 2 0 7 557 District middlemen 5 0 2 7 564 Inter-provincal middlemen (by route) 5 2.5 2 9.5 573.5 Exporter in Neak Leang (by route) 5 7 2.5 14.5 588 Importer in Taing Chov (by boat) 12 15 3 23 611 Total 32 26.5 9.5 61
  • 14. Price of Cassava Chip (US$/t) 14 Crop Marketing Situation in CambodiaCrop Marketing Situation in CambodiaCrop Marketing Situation in CambodiaCrop Marketing Situation in CambodiaCrop Marketing Situation in CambodiaCrop Marketing Situation in CambodiaCrop Marketing Situation in CambodiaCrop Marketing Situation in Cambodia
  • 16. National Policy Supported CF and Partnerships • National Strategic Development Plan (2009-2013, para.396) • Strategy for Agriculture and Water 2010-2013(SAW 2010, para.116,301, 308,313) • RGC’s policy paper on the Promotion of Paddy Production and Rice Export (2011-2015) ( page 11) • Sub decree on Contract Farming (promulgated Feb, 2011) • Currently, PM requested to implement the link SLCs programs and ELCs through contract Farming ( during addressing at the inauguration of the new building of the MLMUPC, date 9th, Feb, 2012) 16 Contract Farming Situation in Cambodia
  • 17. Sub Decree of Contract Farming (SDCF) 17 Contract Farming Situation in Cambodia
  • 18. Objective of SDCF (Article 2,Charpter 1) • Strengthening the responsibility and trust between producing and purchasing parties base upon the principles of equality and justice. • Ensuring the accuracy of the prices, purchases, and supply of agricultural products, both quantity and quality • Increase purchasing, processing and exporting of agricultural products • Contribute to national economic development and people’s poverty reduction pursuance of the policies of the Royal Government 18 Sub decree on Contract farming
  • 19. Application (Article3, chapter 1) This sub-decree has its scope that applies all types of agricultural production business under the contract-based agricultural production 19 Sub decree on Contract farming
  • 20. MAFF to be lead body (article 5,6 , Chapter 1) Producers (Farmers) Purchasers ( Agribusiness firm) Contract Farming • MAFF shall be the lead institution in communicating, coordinating, and provided expertise services in order to facilitate the contract-based agricultural production development. • MAFF shall monitor and evaluate all of these functions and reports to RGC . MAFF 20 Sub decree on Contract farming
  • 21. Establishment of CF Coordination Committee (Article 7, Chapter 2) Producers (Farmers) Purchasers ( Agribusiness firm) Contract Farming CF Coordination Committee (MAFF + 17 Relevant Organizations ) Develop policy, strategic plan aim at the promotion of the CF To facilitate and strengthen the harmonization between parties to CF To intervene or reconcile argument or conflict that might be occurred from the implementation of the CF that expertise institution is unable to settle or conflict which required settlement of the inter-institutions DAI as its assistant 21 Sub decree on Contract farming
  • 22. Rights and Obligations of Producers & Purchasers ( Article 8,9 , Chapter 3) Producers ( farmers) • To comply with conditions as inscribed in the agreement • To proceed production activities based on seasonal and required timeframe • To supply on time , in term of grade, quantity, and quality and due timeline • To accept the payment of product value as set in agreement Purchasers ( Agribusiness firm) • To comply with conditions as inscribed in the agreement • To determine the commodity items such as quantity, quality , place, and date of delivery and acceptance of the commodities • To provide agricultural materials such as vegetable or crop seeds, animal breeds , and provided credit advance, technical services, etc • To pay by specific unit –based products and quality as agreed prices • To pay the commodities to producing party as specifying under the conditions and at specific timeframe as agreed upon . Contract Farming 22 Sub decree on Contract farming
  • 23. In Conclusion : The SDCF will engage for mutual benefit to both producer and purchaser party Producers • Inputs and production services are provided • Access to credit • Skill and technology transfer • Assured market outlet • Stabilized income Purchasers • Reliable supply of raw materials • Overcoming land constraints • Greater conformity to desired quality and safety standards • Labor cost/ issues reduced Contract Farming 23 Sub decree on Contract farming
  • 24. Thank you for your attention 24 Contact Person : - Dr. Mao Sopheareth, Tel: 012 77 54 97 , E-mail: maosopheareth@hotmail.com - Mr. Yi Bunhak , Tel: 017 59 69 16 , E-mail: yihak54@yahoo.com Department of Agro-Industry, Ministry of Agriculture, Forestry and Fisheries