Gov’t Nudges Farmers Toward Associations

chamkar leu district, Kompong Cham province – Mao Sorth is a soybean farmer in an area where rubber plantations grow next to banana plantations and all manner of vegetables push through the rich, red soil.

Earlier this week, he sat smoking a cigarette, listening to Minis­try of Commerce officials list the benefits of forming farm associations, and scribbling notes down in a notebook yellowed with age. Already a member of his local soybean growers association, he had come to learn more about how such a collective might function.

About 30 other farmers sat with him, learning how they could better market themselves to foreign buyers, increase their negotiating power with middlemen and—if need be—have a legitimate right to complain through the courts if buyers back out on deals.

“Recently, it has been difficult for the farmers to sell because of middlemen who come to buy from the farmers at a lower price,” Mao Sorth said after the meeting, held at the Chamkar Leu district headquarters and attended by Commerce Secre­tary of State Sok Siphana and a delegation of foreign economic experts.

The Commerce Ministry has been pushing for the formation of such associations for the last six months and has so far registered 13 commune associations. The heads of five of those—representing 1,000 families on 1,000 hec­tares of land—were given their certificate during the meeting.

Cambodian farmers often have a difficult time getting the best prices for their fruits and vegetables. Sometimes they are exploited by buyers who offer lower prices to individual families desperate to sell their goods. Sometimes, lacking financial resources, the farmers get loans from affluent neighbors, promising in return to sell their products to the lenders for half the going price.

Sok Siphana said that if farmers can form organized associations, then they have more power to deal with foreign buyers,  who seek large amounts of goods to make a purchase profitable. He said this “critical mass” can only be reached by families joining together in local associations, and eventually in nationwide federations.

Soybean federations, corn federations, green bean federations and other groups would be able to put up a united front when selling their goods, and because they would be registered with the government, it would be easier for them to take buyers who back out on deals to court, Sok Siphana said. In addition, he said ministry officials could easily put registered farmers in touch with prospective buyers, saving a lot of legwork and cutting out “ruthless middlemen.”

Mao Sorth said farmers sometimes sell their soybeans for $0.05 per kilogram, only to find out the beans later sell in markets for $0.38 per kilogram. Other farmers sell their beans for $0.01 per kilogram to rich neighbors who have loaned them money.

“After the harvest, they get nothing. As a result, there is no benefit for them,” he said.

While associations could eliminate some of those inequities, other farmers present at the meeting pointed out that collective organization would not be a miracle cure for their burdens.

One woman said lack of irrigation makes farmer too reliant on the weather.

“Water is the most important. An association is easy to form, but if there is no water, we cannot sign a contract with a buyer. What happens if the [contract] is broken one year. Then the buyer will not come back because we broke our promise. It depends on the sky. How can we sign a contract with the sky?” she said.

Other farmers said they weren’t enthused about all selling the same crop.

“I’ve worked with soybeans for 40 years already. If everyone grows soybeans, then I plant watermelon. That way my farm is better,” said farmer Sok San, 62.

Sok San said he is waiting to see what, if anything, will happen from forming an association. And he is waiting to see how much control the government will have over what the farmers will grow.

Sok Siphana said that while the Commerce Ministry was willing to help farmers in the beginning by finding markets, the ministry would no longer have control.

“We’re in a free market now. Don’t look at the state as your buyer,” he said. “You cannot have state intervention.”

 

 

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