Working Paper   104

Contract Farming in Cambodia: Different Models, Policy and Practice


Published: 03-Aug-2015
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Abstract/Summary

Contract farming (CF) is increasingly seen as an effective mechanism to maximise the inclusion of and benefits for small-scale farmers, while giving some control over production to agribusinesses without requiring land ownership. In Cambodia, CF takes many forms and involves food and industrial crops, yet the different CF models and contract types have not been identified. Farmers and contractors have encountered many problems in obtaining reliable benefits from and sustaining CF schemes. The research objectives were to identify and evaluate the various models of CF practiced in Cambodia, explore the supports required for small farmers to maximise benefits from CF, and suggest policy options to improve linkages between small farmers and CF. Snowball sampling was used to identify different CF models and their location, and information was collected from 38 key informant interviews and seven focus group discussions. The findings revealed four modalities of CF in operation: centralised, informal, multipartite and intermediary. Most of the CF schemes are run by support agencies and contractors, with contract documents (formula and format) drawn up by contractors without recourse to the coordination mechanism described in the Sub-decree on Contract Farming. Institutional supports especially for individual contract farmers remain limited. Centralised and multipartite models can provide more benefits if contracts and agreements are well managed and coordinated and there is enough support for farmers. CF practices do exist at community level but, so far, there has been no clear supportive action from government, even though the sub-decree has been signed. The promotion of CF to improve agricultural productivity and rural incomes will not be effective unless the sub-decree is accompanied by policy, strategy and action plans. To ensure that CF schemes work well and to provide more benefits to farmers, government must pay attention to four strategic areas:

• Linking farmer organisations and CF schemes

• Formalising markets

• Improving production inputs and services

• Enforcing the sub-decree by implementing its role as stated in Article 7, Chapter 2, and forming the Coordination Committee for Agricultural Production Contract to (i) develop policy to support CF, (ii) strengthen harmonisation between farmers and contractors, and (iii) intervene in, or reconcile arguments or conflicts between farmers and contractors.




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