The Ministry of Commerce is working with Kompong Cham district authorities to bring back cotton, a French colonial crop forgotten since the war.
Authorities are trying to convince skeptical farmers to convert their hectares to cotton production, in return for a guaranteed price from a local manufacturer.
Manhattan Cotton Textile and Garment Factory in Kompong Cham imports cotton from the US and China, but managers would rather buy locally, said Sok Siphana, secretary of state for the Ministry of Commerce.
“It is a factory that has good will and a good idea to help villagers,” Sok Siphana said.
The factory needs 40,000 tons of cotton per year to fill its production needs. About 1,000 hectares are needed to grow that much cotton in Cambodia, said Mao Phirun, second deputy governor of Kompong Cham. This year farmers in six districts converted 300 hectares to cotton, about one-third of the factory’s need.
“They may not trust the factory yet for the first year,” Sok Siphana said. “They would like to see what happens with the buying and selling situation for the first year.”
He said he was confident that Manhattan Cotton would not renege on deals it made with farmers.
In the past, investors in some provinces bordering Thailand have promised farmers set prices for their goods, only to renege on those commitments at harvest time. That has left some farmers unwilling to risk changing from staple crops like rice.
But experts have said Cambodia must diversify its crop base in order to become more internationally competitive in a world embracing globalization and free trade. Farmers willing to take the risk with Manhattan Cotton will not regret it, Sok Siphana said.
If Manhattan is able to make garments with locally grown cotton, it also would save money on import duties. That, in turn, would create more jobs for factory workers, and guarantee prices for cotton farmers.
“I think it will help villagers to get a job, [either] farming or working in the factory,” Sok Siphana said.
This year’s price for cotton was set at 1,200 riel (about $0.30) per kg. A hectare of land should produce between 2.5 tons and 3 tons. Farmers who planted cotton this year saw a profit between 1 million and 1.4 million riel (about $250 to $350) per hectare.
Sok Siphana said he was confident the idea would catch on, especially in Kompong Cham, where tobacco farmers for British American Tobacco profit from a similar scheme.
BAT has been contracting with farmers since 1997 to grow some of its filler tobacco, with the amount increasing each year.
“With both companies, BAT and Cotton Textile, farmers need not worry about the market,” Mao Phirun said.
Kompong Cham is Cambodia’s most populous province, and much of the land is ideal for agriculture.
Irrigation and high prices for water and electricity remain a problem, but officials expect good economic growth in the province.
Krek, Memot, Krouch Chhmar, Kosh Sotin and Kong Meas districts are all good for farming cotton, said Te Son Tho, a provincial official for the Ministry of Mines and Industry who works directly with Manhattan Cotton. The challenge is to convince farmers.
“I think for the first year, some of the farmers are considering the unsecured market because many companies have come over to them and made promises—then lied,” Te Son Tho said. “But we are guaranteeing to buy from them.”