Cambodian farmers, the backbone of the country’s economy and food security, face persistent and deepening poverty. Low agricultural prices and a lack of market opportunities force them into crippling debt, often resulting in land confiscation. Many farmers are left with no choice but to migrate to Thailand for low-paying jobs to survive and repay their debts, draining rural areas of labor and undermining agricultural productivity.
The Cambodian government has implemented a rice price support policy intended to stabilize farmer incomes, but it has proven ineffective. This policy relies on loans to private rice millers, often linked to the political elite, who prioritize profits over fair pricing for farmers. As a result, farmers continue to struggle while intermediaries benefit disproportionately.
Failures of the Current Policy
An Inefficient and Biased System
The government’s reliance on private rice millers to stabilize rice prices has significant flaws. These millers, often connected to the political elite, act as intermediaries between farmers and the market, prioritizing their profits. Farmers are offered insufficient prices and remain vulnerable to market fluctuations. Comparison with Thailand: Thailand’s government guarantees a minimum price directly to farmers, cutting out intermediaries and ensuring stable incomes.
Lack of Regulation
Cambodia lacks effective regulations to ensure that rice millers purchase paddy from farmers at fair prices. There are no appropriate mechanisms to monitor their operations or enforce minimum purchase requirements. Comparison with Vietnam: Vietnam enforces strict purchase quotas through state-supported cooperatives, guaranteeing farmers fair prices and equitable income distribution.
No Direct Support for Farmers
Instead of channeling subsidies directly to farmers, the government routes financial aid through intermediaries. This approach dilutes the impact of support and allows intermediaries to capture most of the benefits. Comparison with Thailand: Thai farmers receive direct subsidies in the form of compensatory payments and access to subsidized inputs, such as seeds and fertilizers, ensuring aid directly addresses their needs.
Proposed Reforms
Cambodia can draw inspiration from neighboring countries to implement reforms that address the shortcomings of its current policies. These reforms focus on empowering farmers, improving infrastructure, and ensuring fair pricing.
1. Implementation of a State-Guaranteed Minimum Price
The government should establish a guaranteed minimum price for paddy. If market prices fall below this threshold, the state would compensate farmers for the difference. This measure would stabilize incomes and protect farmers from market volatility. Comparison with Thailand: Thailand’s guaranteed price system stabilizes farmer incomes by purchasing harvests at fixed prices, providing a safety net against price fluctuations.
2. Creation of a Public Paddy Procurement Agency
A public agency could purchase paddy directly from farmers at fixed prices, eliminating intermediaries and managing strategic reserves to stabilize prices. Comparison with Vietnam: Vietnam uses state-supported cooperatives to collect and distribute harvests, ensuring farmers receive fair prices and fostering trust in the market.
3. Targeted Subsidies for Farmers
Direct subsidies calculated based on production volumes would provide immediate and transparent support. This approach reduces fund mismanagement and ensures aid reaches the intended beneficiaries. Comparison with Thailand: Thai farmers benefit from production-based subsidies and easier access to subsidized inputs, enabling them to reduce costs and improve yields.
4. Promotion of Agricultural Cooperatives
Encouraging farmers to organize into cooperatives would enhance their bargaining power, reduce costs, and provide access to profitable markets. Comparison with Vietnam and Thailand: Both countries have demonstrated the effectiveness of cooperatives in empowering farmers and improving access to export markets.
5. Development of Storage Infrastructure
Community silos and warehouses would allow farmers to store paddy and wait for better market conditions, reducing the need to sell immediately after harvest at low prices. Comparison with Indonesia: Indonesia’s investment in local storage facilities reduces post-harvest losses and enables farmers to manage their supply more effectively.
6. Contract Farming and Guaranteed Markets
Facilitating contracts between farmers and buyers with pre-agreed prices would reduce uncertainty and encourage higher production. Comparison with Vietnam: Vietnam promotes contract farming to secure farmer incomes and improve crop quality. Cambodia could adopt this approach to ensure greater income stability for its farmers.
7. Massive Investments in Irrigation
Developing modern irrigation systems would ensure a steady water supply, improve productivity, and reduce reliance on rainfall. Comparison with Thailand: Thailand’s advanced irrigation infrastructure, supported by significant public investment, has boosted yields and increased resilience to drought.
8. Access to International Markets
Promoting Cambodian agricultural products, such as fragrant rice, on international markets would increase demand and provide farmers with new opportunities. Comparison with Thailand: Thailand’s success as a leading rice exporter demonstrates the potential of effective marketing and trade negotiations. Cambodia could intensify its efforts to better position its products globally.
Conclusion
The plight of Cambodian farmers, compounded by ineffective policies, highlights the urgent need for reform. Unlike neighboring countries such as Thailand and Vietnam, Cambodia has yet to adopt inclusive and equitable systems to support its farmers and stabilize prices.
By implementing solutions inspired by regional successes—such as guaranteed prices, cooperative development, and investments in infrastructure—Cambodia can transform its agricultural sector. These reforms would not only stabilize farmer incomes but also foster a resilient and sustainable economy. To achieve this, Cambodia must prioritize its farmers and adopt strategies that empower them to overcome poverty and contribute to national development.
[Photo by Image by Sasin Tipchai from Pixabay]
The views and opinions expressed in this article are those of the author.
Sam Rainsy, Cambodia’s finance minister from 1993 to 1994, is the co-founder and acting leader of the opposition Cambodia National Rescue Party (CNRP).
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