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Contract farming law in the pipeline

Sok Chan / Khmer Times Share:
Workers pick a lettuces at a farm. The new contract agriculture law will help stabilise market prices. KT/Chor Sokunthea

The Cambodian Government has put the wheels in motion to create a contract farming law together with the purpose of stabilising agricultural commodity prices. It is also aimed at attracting investors and promoting public, private and producer partnerships in the Kingdom.

The Ministry of Agriculture, Forestry and Fisheries (MAFF) will oversee the project.

“MAFF will undertake this task which will encompass the training of farmers, companies and development partners to make them aware of the benefits of contract farming practices. This includes the power of price negotiation, the benefits of agricultural cooperatives and the linking of  farmers to traders, producers and purchasers,” explained Srey Vuthy, spokesperson for the ministry.

According to the decision letter produced by the Ministry of Agriculture and signed by Veng Sakhon, Minister of Agriculture, the government will establish the commission to prepare and draft the special law.

Kong Pheach, director of the agro-industry department within the Ministry of Agriculture, and the permanent deputy of the commission, told Khmer Times that the law will benefit the agricultural sector (including crop farmers and fishing and livestock producers), while also protecting the benefits of their partners – exporters, processors and the market.

“The law will address the issues that occur during every harvest season, when prices of agricultural commodities fluctuate and brokers spoil the market. If there is an issue or loss of trust among the producers, exporters and market, the law – which will be based on a civil code and may impose small penalties – will play a role to resolve the situation. But it will also encourage them (relevant parties) to discuss and negotiate the complaint, with the government acting as a mediator,” Kong explained.

The ministry is currently preparing a draft of the law which will be submitted for an internal meeting. A workshop will follow to receive more inputs from relevant stakeholders to before the proposed law is submitted to council ministers for approval by the end of the year or beginning of 2021 by the latest.

Seu Rany, president of Farmer and Nature Net, which represents 76 community members, welcomed the move, but pointed to a delay in prompt payment from exporters as being a major issue.

“It will help to build trust between producers and buyers, but the biggest challenge for farmers is not getting a return on capital quickly enough after harvest. The money is needed to pay back daily expenses, loans and to buy fertilisers,” he said.

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