No end to farmers’ woes as paddy prices further decline

No end to farmers’ woes as paddy prices further decline

The drop in rice prices has broader implications for the agricultural supply chain. Lower farmgate prices affect not only farmers but also millers, traders, and exporters, threatening cash flow throughout rural communities.

With paddy prices hitting below 600 riels per kilogram, farmers who have rented lands are facing considerable losses of 500,000-1,000,000 riels ($125-$250) per hectare. Many of the affected farmers are now considering returning to Thailand for work and income security.

Farmers in Kampong Thom and Banteay Meanchey provinces told Khmer Times yesterday that dry season rice generally yields five to eight tonnes per hectare, while rainy season rice produces higher-quality grain but only two to three tonnes per hectare.

However, the dry season rice came with more production costs, making profitability extremely sensitive to market fluctuations. Renting farmers, in particular, face heavy expenditures that erode their earnings and threaten long-term viability.

The ongoing price slump is creating financial strain for many smallholders, particularly those unable to absorb high cultivation costs, prompting farmers to raise alarms on social media about Cambodia’s vulnerable agricultural sector.

A farmer in Kampong Thom said, “Renting land costs 1,000,000 riels or about $250 per season, which is around four months. Fertiliser expenses range from 120,000-180,000 riels ($30 to $45) per sack, depending on its quality, with roughly five bags required per hectare.”

“Harvesting machinery and workforce costs about 280,000 riels ($70) per hectare, and insecticides or other pest control measures require 200,000 riels ($50),” he added.

A farmer in Banteay Meanchey said, “Water use adds about $10 (40,000 riels) per season, while gasoline for pumping water—essential in dry season cultivation—adds another $50 (200,000 riels).”

“At the current market price of 580 riels per kilogram (roughly $0.14), five tonnes of rice generate about 2,900,000 riels ($725) and eight tonnes bring in approximately 4,640,000 riels or $1,160,” he added.

It should be noted that farmers in Kampong Thom benefit from relatively reliable water resources, including seasonal floodplains and irrigation canals, allowing them to reduce water supply costs, although some pumping expenses are still required.

In Banteay Meanchey, water resources are more limited, particularly during the dry season, forcing farmers to rely heavily on external water providers, which raises cultivation costs and limits dry-season rice yields compared to other provinces.

According to farmers’ calculations, these expenses bring the total production cost for one hectare over 2,400,000 riels ($600) before even factoring in transportation, or unexpected shocks such as pest outbreaks and adverse weather.

While this revenue may cover costs for small land-owning farmers, renting farmers struggle to break even due to land rental fees, with these expenses not yet including daily family food costs, as they spend about $10 per day or $300 per month.

Those cultivating multiple hectares face even steeper losses. For instance, a farmer renting 10 hectares could face losses reaching up to 10,000,000 riels ($2,500), a sum that can push households into serious debt.

The local consumers said that while rice prices at the market remain high, paddy prices are very low, raising questions about whether middlemen are capturing the majority of profits, benefiting disproportionately compared to farmers themselves.

Many renting farmers are now questioning their future in Cambodia’s agricultural sector. “We are working harder, yet instead of earning, we are losing,” one farmer posted a video on social media.

He said, “If rice prices remain below 600 riels, some of us may have no choice but to return to Thailand to find more stable income,” underscoring mounting financial pressures as they struggle to repay loans from financial institutions.

The decline in rice prices has broader implications for the agricultural supply chain. Lower farmgate prices affect not only farmers but also millers, traders, and exporters, threatening cash flow throughout rural communities.

The Cambodia Rice Federation (CRF) has previously urged the government to take steps to stabilise farmgate prices, including investing in storage facilities, milling capacity and export diversification.

However, renting farmers emphasise the need for more immediate interventions such as price support programmes, government-backed purchasing schemes, or input subsidies, preventing households from falling into deeper debt while supporting sustained rice production.

Agriculture remained a critical sector for Cambodia, employing roughly one-third of the workforce and providing livelihoods for millions in rural areas. The ongoing dry season harvest has brought the price slump into sharp focus, underscoring the tension between global market forces and local income security.

khmertimeskh