Amru Rice, a leading organic rice exporter, yesterday concluded contract farming deals worth $7 million with 24 agricultural communities in Preah Vihear province to purchase 20,000 tonnes of paddy rice for the year.
According to Song Saran, CEO of Amru Rice, the rice company will be partnering with the French Agency for Development (AFD), International Volunteers of Yamagata and Oxfam to ensure that the quality of organic rice adheres to international standards.
“We are working together with the development partners to ensure that organic rice farmers have the requisite knowledge and skills to produce rice for export,” said Mr Saran.
“The $7 million is for use from November this year to January next year,” he added.
Mr Saran said organic rice from Cambodia was renowned overseas for its high quality.
“Every year we are seeing its demand go up by 10 to 20 percent, especially in the EU. Because of that we are trying to increase the capacity of farmers to produce more organic rice for export,” he said.
Limited market access and underdeveloped agricultural infrastructure are two major bottlenecks constraining the development of organic rice farming in Cambodia.
According to the Asian Development Bank, contract farming is beneficial to farmers because it opens up otherwise unavailable markets, provides materials, technological and financial support, and reduces farmers’ costs and the risks involved in selling their products.
It also benefits contractors by allowing them to establish close relationships with farmers and by reducing uncertainties in purchases through predetermined timing, prices, and quality standards.
Poeung Tryda, director of Preah Vihear provincial agriculture department, said more farmers are planting organic rice due to its growing demand, coupled with the benefits of contract farming that guarantees a market for their paddy rice.
According to Mr Tryda, there are more than 10,000 hectares of farmland planted with organic rice in Preah Vihear province by about 5,154 households.
According to a government report, Cambodia exported more than 6,900 tonnes of milled organic rice in the first half of the year. This was an increase of 2.4 percent compared with the same period last year.