A shipment of internationally-certified organic rice left Cambodia for the first time Saturday bound for European markets, potentially setting a new horizon for Cambodia’s agricultural exports, officials said.
Cambodia Biologicals Company sent seven tons of organically-grown rice under the label New Rain Organics to be sold as a fair trade product in Italy, according to Ira Setiawati, a CBC food processing consultant.
Though domestic markets have provided people in Cambodia with the option of organic rice for several years, it has taken until now for the product to break into foreign markets, said Mao Thora, undersecretary of state at the Commerce Ministry.
Palm sugar and palm wine were among the first organic products to be exported from Cambodia in recent years, but the addition of rice increases the potential of organic farming becoming popular among a larger segment of the population, officials said.
“Rice is a poor man’s crop, but when you upgrade farms from conventional to organic then farmers get a premium and there is a bigger impact on poverty reduction,” said Ralf Muller, an agriculture business expert.
Muller has been working with the Commerce Ministry through the German development organization GTZ to train 1,300 Cambodian farmers how to grow organic rice in Kompong Thom, Kampot, Pursat and Battambang provinces.
Experts say that, on average, farmers are paid 20 percent more for organic rice than regular rice.
Muller said, that farmers are also able to save money they would be otherwise spending on fertilizer.
“There is more output, less input and a higher price,” Muller said.
On the other hand, organic farming is far more labor intensive and requires knowledge of things like how to replace chemical fertilizer with natural products.
There is also a tough transition period when farms go organic.
If farms have used chemicals in the past, it takes three years for the soil to be free of chemical contamination, said Birgitt Boor, a consultant on organic agriculture with the Germany-based company BioHerb.
Produce from that interim period cannot be sold as organic, she said.
Farmers are also likely to experience a lower initial yield and therefore lose money in the first year or so, she warned.
But if Cambodia can develop an international reputation for quality organic exports, the entire economy would benefit, said Lyaun Hay, chairman of the Cambodian Organic Agriculture Association and owner of the company Confirel, which exports organic palm sugar and palm wine.
Tim Smyth, managing director of market research firm Indochina Research, said organic markets are growing worldwide, and that this could be a viable option for Cambodia.
Cambodia’s entry into the World Trade Organization in late 2004 has created theoretical access to many new markets worldwide, but the reality for a small country where resources are limited is much more complicated, he said.
Matching the volume of agricultural produce of Vietnam and Thailand is simply not feasible, Smyth said, adding that Cambodia needs to find another way to compete. Developing a niche market is one way to do that.
But particular risks come with niche markets, he cautioned.
“Niche markets are always much more variable than broader base markets,” he said.
“A supplier might say ‘I need this quality, this many, this quickly,’ and the market must be able to adjust.”
(Additional reporting by Kay Kimsong.)