Agriculture fund aims to sow seeds of growth
The government recently launched a programme in partnership with the International Fund for Agricultural Development (IFAD) to help thousands of Cambodian smallholder farmers commercialise their operations. The Accelerating Inclusive Markets for Smallholders (AIMS) project will work closely with development agencies and the local private sector to provide assistance to develop agricultural value chains. The Post’s Cheng Sokhorng sat down with IFAD Country Programme Officer Meng Sakphouseth to discuss the project.
What is the AIMS project and what is the significance of working with the government to implement it?
This is the first time that IFAD will work on market access for farmers. And this is the first time that IFAD will work with the government through the Ministry of Commerce. Together we will see how we can improve the livelihoods of farmers and promote higher productivity. While we have found that some farmers have high productivity, the lack of market access creates a production surplus causing farmers to sell their products at below market prices. This does not help them reduce their levels of poverty, so we need to link farmers with buyers by directly working with the Ministry of Commerce to identify potential private sector players.
How long does the project last for and who is funding it?
The project is a six-year partnership with the Ministry of Commerce. IFAD will provide initial funding of $36 million while the government will contribute around $8.7 million. Large-scale agricultural firms have committed to supplying $8.1 million, while private sector wholesalers and raw material suppliers will provide $8.6 million.
What types of farmers will the AIMS project support?
Our main goal is to support farmers in remote areas who are the most reliant on agriculture, and those that hold small parcels of land of around 2 hectares. We want to raise their income levels to better their standard of living. With Cambodia’s economic growth rate and membership in Asean, we see that we need to also help farmers increase the quality of their yields to compete with free trade. That is why we also need to look at capacity building in order to compete. So, with the help of the government, we will educate farmers about food safety, hygiene protocols and how to produce healthy crops. There are already many programmes that do these things, but AIMS will do it on a bigger scale and it will be more efficient and faster.
How many beneficiaries are targeted?
After six years, we will have at least 75,000 farmer families who will have worked with this project and received economic benefits from better market access. While the project is countrywide in scope, we will have headquarters in the provinces of Battambang, Kampong Cham and Takeo.
How will the project assist smallholder farmers to gain market access?
A gap has always persisted between farmers and buyers, and we will match them together to ensure that farmers are getting a fair price. For buyers who invest in this project, we will provide technical support and working groups to make sure it is profitable for both sides. We will also focus on contract farming agreements to match farmers with suitable companies. Additionally, we will work with farmers before the harvest season to make sure that they are producing at high levels and that they have sufficiently agreed on price, quality and quantity.
The first five flagship products that we will focus on are fragrant rice, vegetables, chicken, cassava and raw silk.
What has limited farmer productivity and how will the project improve this?
The biggest challenges farmers face is that they do not understand the market. So usually farmers fall into the habit of producing only what they are used to growing. This gives them low productivity and low prices. In addition, we will help them by supplying technicians that can help properly utilise fertiliser. If our programme succeeds, Cambodia will become less reliant on importing producing while lifting up domestic farmers.
What challenges could the project face?
Our main challenge would be politics. If the situation is not stable, it will negatively impact the ability for us to implement the project because it will not only be difficult to encourage private sector investment and buyers, the rate of immigration out of the country could increase, causing shortages in the labour force.