Cambodia Links Farmers to Market via Contract Farming: ARDB Supports Stable Supply and Fair Prices

The Agricultural Development Bank of Cambodia (ARDB) has supported the signing of an agricultural contract production agreement between City Rice company and a group of rice-producing farmers in Banon district, Battambang province. The agreement was signed on July 19, 2024, in the presence of Dr. Kaou Tach, Delegate of the Royal Government of Cambodia and Director General of ARDB, who also serves as President of the Techo Farmers Network Association. Lai Chunhang represented City Rice Import Export Co., Ltd., and Chan Samol represented the group of rice-producing farmers. The primary objective of this contract is to establish a partnership between the private sector and farmers, guaranteeing the purchase of rice from farmers at a fair and stable price. This is expected to mitigate market risks and the impact of price reductions by some traders. Dr. Kaou Tach highly commended this initiative, expressing hope that this pilot step will expand further. He emphasized ARDB's long-standing commitment to supporting farmers and urged both parties to trust their partners. Dr. Tach described the 'agricultural contract production' mechanism as an effective tool for linking market demand with production. He stated that this not only provides farmers with peace of mind regarding their harvests but also ensures rice export companies have a supply of rice that meets clear quality standards for export. Furthermore, Dr. Tach advised both parties to sincerely adhere to the spirit of the contract. He urged the rice production group to strive for cultivation according to the technical standards and quality requirements of export companies and rice processing factories. He also called on City Rice company to purchase rice from farmers according to the agreed-upon prices and conditions to maintain the sustainability of their business relationship. Dr. Kaou Tach encouraged farmers to carefully consider their production costs to maximize profits. He also recommended that farmers join the Techo Farmers Network Association, which acts as a bridge for facilitating technical information, market access, low-interest financing, and buyer connections. As a policy bank of the Royal Government, ARDB will continue to provide financial support, including low-interest loans for farmers' working capital for cultivation and for rice millers to purchase and stock rice. This is seen as a significant contribution to stabilizing rice prices in the national market.