Agriculture officials are in the final stages of drafting a new sub-decree on contract farming that, if passed, will grant the Agriculture Ministry the central role in all contract farming in Cambodia.
Yi Bunhak, chief of the ministry’s Agroindustrial Development Office, said that under the sub-decree, which could come up for adoption by the Council of Ministers as soon as March, the ministry would act as a facilitator for contract farming, in which buyers and farmers commit to the price, quality and quantity of crops for sale.
An independent committee will be formed for “problem solving,” he said.
But NGOs said that while contract farming can bring benefits for farmers, such as increased yield and guaranteed crop prices, the consultation process for the sub-decree was inadequate, and that they had serious concerns about the so-called problem-solving process that is to include representation for businesses, but none for farmers.
Mr Bunhak said the sub-decree was drawn up to encourage foreign investment, and to help the government achieve its aim of exporting a million tons of rice by 2015. He hoped it would increase farmers’ productivity by linking them with businesses that will provide “input” such as better quality seeds, fertilizer and pesticides, to improve overall productivity.
“Under the sub-decree, if a company would like to export rice to China, that company [can] come to my department or the Ministry of Agriculture and [we] find them the farm organization,” Mr Bunhak said. “Then we bring both parties together and set the conditions in the contract.”
The sub-decree also directs that the government solve any dispute that might arise, such as a failure on either side to fulfill a contractual obligation. Mr Bunhak said the problem-solving committee would consist of members from more than 10 ministries, and that business interests would be represented by the Cambodian Chamber of Commerce.
“Cambodian Chamber of Commerce represents private sector. It is a very important member,” he said. If the committee were unable to solve the problem satisfactorily, it would be sent to the courts, he added.
But the committee detailed in the sub-decree will include no farmers, no members from farmers associations and no NGO representatives, Mr Bunhak said.
Sharon Wilkinson, who stepped down as country director of CARE International in December, said the decision to exclude farming representatives from the problem-solving process rendered it profoundly unfair.
“Any arbitration process, whatever name it goes by, to represent full disclosure and transparency requires each interest group must be represented,” she said. “You cannot leave key groups out of the dialogue and say it is a transparent process.”
Mr Bunhak declined to comment directly on the inclusion of private-sector representatives alone, but said the sub-decree would help protect farmers from buyers that break agreements.
The Agriculture Ministry “helps the farmer. We help to see…whether the land is suitable for the crop or not,” he said. “But we have control [over] both parties, also we control the company. Companies…must finish the contract.”
NGOs were also critical of the consultation process for the sub-decree, which consisted of a half-day workshop in July with one day’s notice, they said.
“We got the sub-decree from the Ministry of Agriculture and we have only one day to have a meeting with NGOs and farmers before giving our recommendations,” said Keam Makarady, director of the environment and health program at the Cambodian Center for Study and Development in Agriculture. “The timeframe was very difficult.”
According to a list of those invited provided by Mr Bunhak, the Agriculture Ministry invited 21 representatives from government bodies, 15 from the private sector and 14 from NGOs. One member of the Federation of Cambodia Rice Millers Associations was invited, and no farmers.
Mr Bunhak defended the decision to exclude farmers from the consultation process yesterday, as he said the local NGOs that were invited could adequately represent their views.
“I think local NGOs know well about the situation of the farmers,” Mr Bunhak said. “I think farmers we have no space to invite. But we invite [a representative from] farmers association.”
Ms Wilkinson said she disagreed.
“To have a meaningful consultation, you have to create an environment that is enabling, you have to put [the sub-decree] in the hands of the people that it will affect,” she said.
Mong Reththy, president of Mong Reththy Group, attended the workshop and said yesterday he thought the new sub-decree would be a boon to agribusiness in Cambodia.
“There will be a bigger market and durable price of the product…. There will be more investment.” Mr Reththy said, adding that sub-decree would benefit farmers as a whole.
Prey Veng provincial rice farmer Kuy Borath said yesterday that farmers should have been involved in the debate. Mr Borath, who farms a three-hectare plot, had not heard about the sub-decree although he did know about contract farming, and said he hoped the draft would improve his ability to sell his rice.
“The government should pay more attention to the farmers by finding markets for the product,” Mr Borath said.
Leang Penh, a farmer of Banteay Meanchey province, was also unaware of the draft sub-decree, but noted that if the government body helped the farmers, the farmers would be happy for it to be created.
” We will be very happy if they purchase our rice yield with good price because now the price fluctuated according to the middlemen’s mouths,” Mr Penh said.