Contract farming schemes in the kingdom work best under the centralised and the multipartite models, a study released yesterday by The NGO Forum on Cambodia revealed.
By contrast, the informal and intermediary models are less able to provide security to farmers including access to reliable markets and a fixed pricing structure, the study, titled ‘Small landholder famer and agribusiness engagement: Implication for corporate performance and impact on rural livelihood in Cambodia’, said.
According to the Food and Agriculture Organisation of the United Nations (FAO), there are five basic models for contract farming: centralised, nucleus estate, multipartite, informal, and intermediary.
The centralised model involves a centralised processor or packer buying from a large number of small farmers, while the multipartite model is usually based on a variety of organisations, frequently including statutory bodies.
In an informal model, individual entrepreneurs or small companies use informal production contracts, usually on a seasonal basis, while in an intermediary model, the sponsor relies on intermediaries to deal with farmers.
The study looks at contract farming schemes implemented by a group of agribusiness companies, including Amru Rice, Angkor Kasekam Roongroung, Confirel, Golden Rice, Lors Thmey, Cedac, East-West Seed, Entree Baitang, Mong Reththy and Natural Garden.
Researchers interviewed 70 small landholder farmers engaged in six different contract farming programmes, including contracting farming through agricultural communities and semi-formal contract rice farming.
Findings showed that “Contract farming can benefit both small landholder farmers and agribusiness companies the most when programmes are properly designed for a long-term relationship.”
It also concluded that even poorer, marginal farmers can take advantage of contract farming opportunities and that governmental policies that impact access to seeds and land rights are not sufficient to meet the needs of both small landholder farmers and agribusiness companies.
The study recommends the donor community to do more to encourage long-term, mutually beneficial contract farming programmes and to promote other engagement modalities between small landholder farmer and agribusiness companies.
“Our results provide important insights for development partners, government and researchers, and we hope that the study will help improve the livelihoods of farmers, help agribusiness companies and improve the local economy,” said Tek Vannara, executive director of The NGO Forum on Cambodia.