Coffee Farmers Struggling With Limited Local Market

banlung district, Ratanakkiri province – When Nou Ly began farming coffee beans in the hilly northeast of the country in 1997, he says they sold for about $2,500 a ton.

Now, a little more than a decade later, the 47-year-old says his 200-hectare coffee plantation is losing as much as $70,000 a year as the price of Cambodian coffee beans has plummeted—at one point to as low as $400 per ton, though prices have picked up a little.

“Most coffee farmers have turned to cashews and rubber because it costs so much to farm coffee,” Nou Ly said, adding that his beans today sell for between $1,300 and $1,400 per ton.

“I won’t give it up, though,” he added. “We have put so much into it. We used to take our coffee to exhibitions in Japan. So many people know about our coffee.”

Nou Ly dedicates about four hectares of his farm to producing paper, which he says helps negate the losses sustained by the coffee farming. Others aren’t so lucky.

Sreang Cheaheng, deputy director of Ratanakkiri’s provincial agriculture department, said in an interview Wednesday that Cam­bodia’s coffee farmers are facing major problems—or even giving up on the crop completely—because of a limited local market and poor resources.

“The major problems are the market, lack of water, poor irrigation and no electricity,” Sreang Cheaheng said, adding that the high cost of producing coffee here makes it difficult for farmers to compete with one of the world’s great coffee giants—neighboring Vietnam.

“Input [costs] for our farmers are higher, which makes it difficult to…compete with Vietnam,” he said. “In Vietnam, they have cheap electricity and irrigation…which farmers can use to sell coffee at just $0.50 per kilogram.”

More than 500 hectares of Ratanakkiri province was once dedicated to coffee farming in the mid- to late-1990s, when Cam­bodia’s coffee production reached its peak and the beans could be sold for $2 per kilogram, according to Sreang Cheaheng. Now, just 150 hectares of coffee farms remain—about 4 1/2 hectares are located in Banlung district’s Kachanh commune, and the rest in O’Yadaw district, where Nou Ly keeps his struggling farm.

Ing Ken, owner of the 4.5 hectares of coffee orchards in Banlung district, said that he and his son, Ing Kenrotha, had already cut down about 2 hectares of coffee trees, with the rest to follow, as they regroup and try to salvage their farm.

Ing Ken, who also opened his coffee farm in 1997, says that even though his farm also produces cashews, he loses about $1,750 per year because of the cost of providing his coffee with water, fertilizer and pesticides. He said he was close to giving up in 2004, but then a foreigner agreed to subsidize his coffee farm.

“We don’t want to close the farm because we want to wait for prices to go back up,” he said.

Ing Kenrotha, 30, who manages the farm, said he was adopting a tactic he heard Malaysian farmers use, growing rubber trees around the coffee to create shade and, hopefully, reduce the amount of water needed by the coffee plants.

He said about two hectares of his coffee had already been cut down, but he said the plants would grow back in about two years, in time to be harvested again in 2011. The rubber, he said, would take about seven years to grow before it could be harvested.

“We planted the rubber trees last October,” he says, pointing to the small, green rubber plants lining mounds of dead coffee branches. “We have spent lots of money to grow coffee, so it’s useless to give up and cut it down for good.”

However, many farmers have decided to give up on the coffee bean, Sreang Cheaheng said. He said many have started farming cashews, cassava and rubber because those products enjoy a more sustainable market and are cheaper to produce.

He said the province’s agricultural output can not crack the Vietnamese market, because that country’s largely self-reliant markets did not need Cambodian products. He also said Cambo­dian coffee can not match the Vietnamese product in terms of quality because of an even further discrepancy in resources to refine the beans.

“Vietnam has factories to convert agriculture into nice finished products, which they then sell to Cambodia,” he said.

Agriculture Minister Chan Sarun said Wednesday that an oversaturated international market wasn’t helping Cambodia’s coffee farmers. He said since 2004 or 2005, worldwide supply has been greater than demand causing coffee prices to plummet and leaving Cambodia’s farmers out of luck. He called the lack of a market the primary reason for their struggles.

“There was a lack of market [for coffee] in the worldwide market because of the surplus of coffee because many countries began producing coffee around 2004,” he said, adding that statistics regarding 2008 coffee production were not yet available. “Now, even Vietnam is cutting down some of its coffee farms because of the lack of a market.”

He said the government has sent officials to Saudi Arabia to learn how to better farm coffee beans, saying the country wanted to turn things around for a crop he said is regressing instead of developing.

“The government is now training people, especially in the coffee sector,” he said, adding that there are more than 200 hectares of coffee farms in Cambodia, with Mondolkiri the only other province to grow the beans.

But Nou Ly said he had serious doubts, both about the government’s support for the domestic coffee industry and the market’s ability to return to the boom of the late 1990s.

“I think coffee prices will remain unstable for a while,” he said. “I don’t expect that the government will assist coffee farmers the way they do rice farmers, but I would ask that the government helps to find a market for us.”

 

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