Twelve agricultural communities in Preah Vihear province on Wednesday entered into contract farming schemes with major rice exporter Signatures of Asia.
The agricultural communities will sell a combined 2,000 tonnes of organic rice to Signatures of Asia at set prices, guaranteeing a certain level of income to the farmers.
Contract farming is hailed by public officials as an effective tool to lift farmer’s livelihoods and develop the agricultural sector.
Chan Pich, general manager of Signature of Asia, said selling organic rice is a sustainable business and establishing contract farming schemes benefits farmers.
“Demand for organic rice continues to increase, fetching 25 to 30 percent more than regular rice,” Mr Pich said.
“What’s important is that organic rice is grown following the standards required by the importing countries,” he said.
“The market for organic rice is much more stable than that of regular rice, whose price fluctuates a lot.”
He said contract farming schemes usually involve farmers, exporters, buyers and the companies that process the commodity.
Poeng Trida, director of Preah Vihear’s agriculture department, welcomed the agreements.
“The price of paddy rice in this province has always been lower than in other areas of the country. Contract farming can help make the price more stable,” Mr Trida said.
In the European Union, Signatures of Asia exports to Italy, Sweden, the United Kingdom, Spain, Poland, the Netherlands and Germany. The company also has buyers in the United States and Australia.
Cambodia exports a significant amount of rice, but shipments of organic rice are relatively new, with only a few companies exporting it.
Last month, Prime Minister Hun Sen urged rice farmers to abstain from using chemical fertilizers, arguing that Cambodian rice’s appeal abroad is that it is grown using organic techniques.
“Our paddy and milled rice are competitive within the Mekong sub-region. All countries in the Mekong sub-region produce similar types of rice – Myanmar, Laos, Thailand, and Vietnam all produce similar rice.
“Cambodia differentiates itself by not using chemical fertilizers and pesticides. There is strong demand for milled rice without chemicals,” Mr Hun Sen said.