The Rural Development Bank (RDB) is ready to provide loans to vegetable producing communities in a bid to promote chemical-free vegetable production for the local market, said director general Kao Thach yesterday.
However, to be eligible for the loans, which have a maturity date of 5 years, the vegetable farmers will have to form their own communities, he said.
The maturity date depends on loan size, he said, but he declined to reveal the amount the bank has earmarked for the communities, adding that the budget is from the RDB and the International Fund for Agricultural Development (IFAD).
“It depends on the amount of loan to be disbursed because I think the vegetable communities are not big enough. They only have a few hundred members making up 50 families, so the loan amount is not a big one.
“I expect the loan incentives will help in the implementation of the project which will rope in 20 communities for an upcoming test pilot programme.
“RDB has started a campaign to encourage farmers to form their agricultural communities. The idea is to get them to produce safer vegetables. The communities in Kampong Speu and Prey Veng provinces will benefit from this pilot project. It will help them get financial support from the bank,” Mr Thach said.
He also said RDB encourages farmers in some provinces around the capital Phnom Penh plus those from Kampong Cham to form communities though in the first stage, the project will focus on the provinces of Kampong Speu and Prey Veng.
He said market demand is high for chemical-free vegetables.
“I believe market demand is high if we produce following the standards. We import a lot of vegetables since we only have a small scale production capacity. The problem is our farmers do not dare produce in high quantity. They are afraid they will not have access to the market to dispose their products.
“We work with the traders in the markets, particularly the traders who buy organic vegetables and then encourage them to take up contract farming with the communities,” he said.
Rith Chamroeun, general manager at Natural Food Store, a shop selling organic vegetables, welcomed the move, saying the project will help boost production of both organic and chemical-free vegetables which will contribute to lower the prices, making it possible for them to compete with imported ones.
Local organic vegetables are produced based on good agricultural practices.
RDB is also providing special loans to rice millers for the purchase of paddy rice and to build rice storage facilities.