Empowering Youth in Cambodia’s Horticulture Sector

Young Cambodians see greater opportunities for sustainable livelihoods

Cambodia is one of the “youngest” countries in Southeast Asia. With nearly two thirds of the population under the age of 30, youth play an increasingly vital role in driving Cambodia’s economic and social development.

Feed the Future Cambodia Harvest II works to accelerate growth in Cambodia’s horticulture sector. Over the past year, Harvest II partnered with over 400 horticulture buyers and producers – 12 percent of whom are youth – as part of Harvest II’s efforts to catalyze progress towards a stronger and more robust market system.

Mr. Pok Pich, 24, is one such young entrepreneur. Based in Siem Reap province, Pich started out managing his parents’ 20-hectare cashew farms. When he had trouble finding reliable buyers, however, he decided to create his own business collecting cashews from other growers, in addition to growing his own. At first, Pich had trouble sourcing cashews of adequate quality and quantity for export markets. “The main challenge,” he said, “is increasing cashew yield and quality, as harvests are affected by climate change causing pest and disease outbreaks.”

Pich prunes trees on his cashew farm to improve the quality and quantity of his cashews.

©Feed the Future Cambodia Harvest II/2018/Solina Kong

Then, Harvest II worked with Pich to expand his supply network, introducing him to new producers and helping him negotiate buying conditions. Harvest II partnered with Angkor Green Co., an agro-input company, to provide technical trainings and follow-up visits for Pich’s producers, helping them improve their cashews’ quality and quantity.  “Since we received trainings and on-farm demonstration from Harvest II,” Pich said, “and applied the techniques on our farms, we noticed significant improvements, especially concerning the trees’ health and roots.”

As a result, Pich was able to collect 1,000 metric tons of raw and dried cashew last year, and is currently working with Harvest II to connect his suppliers to specialized input companies for additional technical guidance and quality inputs. Harvest II is also helping Pich connect to new buyers who can offer better prices.

Three hundred kilometers away in Battambang Province, Mr. Meas Pheaktra, 28, is also eager to expand his business. Pheaktra began growing mango and longan six years ago, but his technical capacity was lacking. With help from Harvest II, Pheaktra connected with a specialized input company, who provided him with technical knowledge and on-farm demonstrations on pruning, fertilizing, hormone treatment, and other practices to improve mango quality. Harvest II also connected Pheaktra to several buyers, including a processing company and an exporter, to ensure a secure market for his fruits.

After working with Harvest II, Pheaktra began implementing improved growing practices in his orchards, increasing his yield by two thirds.

©Feed the Future Cambodia Harvest II/2018/Solina Kong

“I planted mango six years ago, but I didn’t use proper techniques,” he said. “Now, I feel confident, as I am connected to a trusted input company and several buyers who offer me a competitive price.”

By working with youth in the horticulture sector, Harvest II is building the capacity of young Cambodians like Pich and Pheaktra to take part in and drive progress towards a stronger Cambodian economy.

Promoting Public-Private Dialogue in Cambodia’s Horticulture Sub-Sector

Good communication between the government and the private sector is essential to building an enabling environment that can support growth. However, interaction between stakeholders is not always regular or fruitful. To address this problem in the Cambodian horticulture sector, public-private dialogue (PPD) meetings were organized by Feed the Future Cambodia Harvest II in four provinces: Pursat, Battambang, Siem Reap, and Kampong Thom. Participants at the PPDs included buyers, suppliers, agro-input supply companies, financial institutions, provincial chambers of commerce, as well as provincial line departments. During the dialogues, these actors discuss constraints and challenges and propose solutions through focus group exercises.

Mr. Chhim Vachira, Director of PDAFF in Battambang commented that “I am happy to see diverse relevant stakeholders help address constraints and identify areas for collaboration as it is rare to have everyone sitting together like this.” A longan exporter, Mr. Kong Sokha also expressed that “This is a good opportunity to meet and talk about our challenges and propose solutions that benefit all.”

Focus group discussion between microfinance institutions in the horticulture in Battambang.

©Feed the Future Cambodia Harvest II/2018/Solina Kong

Numerous findings were raised during each group discussion. For instance, a priority concern raised by agro-input companies was the unfair competition brought about by unregistered and illegal imported agro-inputs and the complex registration and license process. Horticulture producers expressed that they lack production knowledge and technologies, have inadequate capital and market information, and that agro-inputs are expensive – all chronic issues preventing them from being competitive.

In addition, inconsistent supply due to seasonal production, low quality produce, high competition with imports, lack of investment in processing, lack of working capital, and financial skills seemed to be major issues among buyers. The latter, especially, has led to an increase of payback risk to microfinance institutions and banks. Similar issues were also brought up by provincial line departments and development partners.

Focus group discussion between NGOs and development partners on the challenges faced by horticulture actors in Siem Reap.

©Feed the Future Cambodia Harvest II/2018/Solina Kong

Harvest II will synthesize and share these findings in a national public-private dialogue to be held later this fiscal year, where government ministries, development partners, and key private sector actors will be engaged. Additionally, this PPD will document the issues, constraints, and challenges, and formulate potential joint solutions to address enabling environment constraints in the sub-sector.

 

Strengthening Resilience to Climate Change

In Cambodia, agriculture plays a vital role to ensure food security and contribute to economic growth. Over 80 percent of the population of Cambodia lives in rural areas and about 70 percent depends on agriculture for their livelihoods. However, farmers in Cambodia are facing major production constraints from unreliable rains, drought, changes in weather patterns, and pest and disease outbreaks caused by climate change, affecting their economic and livelihoods.

To help farmers with this challenge, Feed the Future Cambodia Harvest II ("Harvest II") awarded two grants to local NGOs - Aphivat Strey (AS) and International Institute of Rural Reconstruction (IIRR) - to work directly with 2,000 producers in Battambang, Pursat, and Siem Reap, three of the four Feed the Future’s Zone of Influence.

Producer Phon Hok (right) is packaging cucumber into 10 Kg plastic bags ready for buyers to transport to the market.

©Feed the Future Cambodia Harvest II/2018/Solina Kong

This climate change adaptation and resilience activity under the Feed the Future Cambodia Harvest II project is intended to improve access to and use of climate information, resulting in risk-reducing actions in the targeted intervention areas. The main activities under these grants is to identify successful technologies or practices, then provide training and follow-up coaching to sure that producers and producer groups are applying climate smart practices on-farm. The trainings include bed raising, trellising, drip irrigation and mulching, healthy seedlings, and composting. This training is helping farmers produce more efficiently, which improves their ability to increase production quality and quantity to meet buyer demand. As of June 2018, 14 climate resilience practices were introduced to 1,184 vegetable producers (59% women; 11.5% are youth) through direct trainings and follow-up visits. As a result, 64% of them have applied multiple climate resilience practices.  

Producer Sophal collects long beans to sell at a local market in Battambang.
©Feed the Future Cambodia Harvest II/2018/Solina Kong

For example, vegetable producer Phon Hok is one of the farmers who received trainings and has applied and improved his production capacities significantly. Hok said, “I used to read agriculture books and asked [for advice] from neighbors but now I have benefited from an expert coming to my farm.” Similarly to Hok, vegetable producer Sophal said that her vegetable production is much better in term of quality and quantity, helping her to increase her income and support her family.

Harvest II also launched a series of one-hour radio talk shows on climate resilience practices that was broadcast over a six-month period through one of the most popular local radio stations. Speakers from private sector such as input supply companies, NGOs, and model farmers, were invited to share their experience with farmers calling in to ask for more information on their production challenges. Over this period, 12 talk shows on climate resilience were broadcast and shared over social media like Facebook, reaching over fifteen thousand people across the country.

Increasing Buyers’ Capacity to Respond to Market Demand

Cambodia’s juicy and sweet mango is in high demand for the export market. Although Cambodia has many varieties of mango, Keo Romeat mangoes (pictured at left) are the most popular on the international market.

Vuth Chanthou is a mango buyer in Battambang province, part of the Feed the Future’s Zone of Influence. Chanthou exports grade one mango to the Thai market, sending the rest to a wholesale market in Battambang. Chanthou has been working as a mango buyer for five years, developing a positive relationship with ten producers, exporting around 1,000 tons on- and off-season mango per year. Chanthou wanted to buy more, but she was having problems finding new producers.

Vuth Chanthou, a mango buyer in Battambang stands in front of her car and truck, preparing to collect mango from her producers. 

©Feed the Future Cambodia Harvest II/2018/Solina Kong

Feed the Future Cambodia Harvest II is a project designed to help horticulture actors connect and work more closely together. Harvest II has connected Chanthou to an additional 21 producers and collectors, doubling her mango sourcing by increasing farm-level sales of $582,901 between December 2017 and June 2018.

Harvest II has also connected input supply companies to Chanthou’s producers to provide advice about fertilizer, pruning, pests and disease control. This helps improve fruit tree health and increase yield and quality. The companies also provided in-depth technical demonstrations at mango farms that brought together producers and Chanthou to observe the new techniques.

Sok Nat is one of the new producers who just harvested mango for Chanthou for the very first time. He had negotiated with various buyers before, but their offers were low and they wanted to buy only the best quality mango instead of the entire crop. Harvest II brought Chanthou to visit Nat’s farm and facilitated the negotiation. Through Harvest II’s facilitation, Chanthou agreed to purchase Nat’s entire mango harvest and provided a cash advance to ensure the purchase agreement. Nat supplied all his mango (55 tons) to Chanthou and is willing to work with her again for the next mango season.

Harvest II has also linked Chanthou to another new producer, Cheav Chhoun, who was looking for a buyer. Chhoun also received training from input supply companies, helping him better understand how to take care of his mango trees. He said, “Many buyers come to negotiate with me, but only Chanthou offers me a good price.”

Producer Cheav Chhoun collects mango for buyer Vuth Chanthou.

©Feed the Future Cambodia Harvest II/2018/Solina Kong

Chanthou said, “I am happy that Harvest II connected me to more producers so I can increase my export capacities.” Chanthou is planning to expand to the Vietnamese market next year and expects to increase her sales to $1 million per year. Harvest II will continue to help Chanthou work more effectively with producers while also helping her scout new export opportunities.

Helping Horticulture Sector Buyers Access Finance

In Siem Reap province, the 37 members of the Banteay Srey Safe Agricultural Cooperative grow primarily cashew nut and mango on 200 hectares of land. Mr. An Som Ol, the agricultural cooperative (AC) committee leader, says one of the group’s main constraints to increasing its sales is working capital investment. “I want to borrow ten thousand dollars to collect cashew from our members and other producers, as well as expand our production to other crops, but I don’t know how,” he said.

Lack of finance has limited Cambodia’s horticulture sector actors—especially buyers of horticulture products—from expanding their businesses and increasing their sales. Many actors don’t know how to access appropriate services. For those that do know, they may still need a facilitator to help them identify the best financial products or prepare loan applications.

Harvest II staff met with Banteay Srey Safe Agricultural Cooperative committee members to discuss their constraints.

©Feed the Future Cambodia Harvest II/2018/Solina Kong

Feed the Future Cambodia Harvest II (“Harvest II”) is helping horticulture sector actors address financing constraints and seek lending options from financial institutions. Harvest II linked Banteay Srey Safe Agricultural Cooperative with Idemitsu Saison Microfinance, a Japanese micro-finance institution that provides financing for Cambodia’s agricultural sector. In discussions facilitated by Harvest II, Idemitsu Saison Microfinance agreed to disburse a $12,000 loan with a lower interest rate (1.3% per month, compared to 1.5% normally) and with no collateral requirement. As part of this facilitation, Harvest II conducted a short training for Banteay Srey Safe Agricultural Cooperative on how to prepare required documents, like financial statements, to apply for this and future loans.

“I could not have received this loan without Harvest II’s support,” Mr. Som Ol continued. This is the first time this AC has received a loan, and it will help them expand their business to buy more produce from internal and external members, as well as expand their crop production. With these additional resources, the committee has started discussing a production schedule that aligns to the needs of their customers in the wholesale market. They have started to plant mixed fruits and vegetables such as watermelon, chili, cucumber, and other leafy vegetable so that they can harvest – and earn money - year round.

Harvest II aims to accelerate growth of Cambodia’ commercial horticulture in Pursat, Battambang, Siem Reap, and Kampong Thom provinces. The project currently works with buyers and producers in the horticulture sector to establish or strengthen relationships, increase sales, boost investment, and create more jobs in the sector.

Helping Buyers and Producers Work Together

Cambodia is now a lower-middle income country, with a growing demand for fruits and vegetables. Many farmers could work their way out of poverty if they could increase sales, yet many buyers find it easier to source their produce from neighboring countries. USAID’s Feed the Future Cambodia Harvest II project (“Harvest II”) is working with buyers to make it easier to do business with local producers.

Chanthan and Nam are vegetable wholesalers working with Harvest II. Nam collects about one and half tons of mixed vegetables every day, including cucumber, eggplant, pumpkin and chili from 25 farmers in his local community and send them by bus to his wife, Chanthan, working at a market in Phnom Penh, 200 kilometers away. Together, they earn barely enough to make a living, but they know they could sell even more vegetables. Nam wants to increase his sales to three tons per day because the demand in high, but it requires a lot of works with producers. He says “Farmers do not always have a regular supply. We have the market, but lack the produce.”

vegetable producer Chun Sokhom
©Feed the Future Cambodia Harvest II/2018/Solina Kong

Under its buyer-led approach, Harvest II helps with buyers of all sizes, including Nam and Chanthan, increase sales by entering into a win-win relationship with local producers, based on a clear understanding of buyer demands. Harvest II first helped Nam and Chantham diagnose constraints to increased sales among their existing farmers and identify new farmers to work with. Then, they all met to devise solutions to increase sales in the immediate term and envision how they could grow their businesses over the longer term.

To date, Harvest II has connected Chanthan and Nam to ten new farmers. Sokhom is a farmer who can produce 200 kg of cucumber per day. She supplies cucumber to four different buyers including Nam but is willing to supply more to him with a fair price agreement. By adding these new producers, Chanthan and Nam can increase their sales to three tons per day. However, supply is not stable due to a lack of technical know-how at the farmer level.

Vegetable buyer Lach Nam collects eggplants from farmer Chun Sokhom to supply to the wholesale market in Phnom Penh.

©Feed the Future Cambodia Harvest II/2018/Solina Kong

Harvest II will help improve the production capacity of Chanthan and Nam’s farmer clients by arranging a production schedule that aligns to the needs of their customers in the wholesale market while providing targeted capacity building on technical production and business management, as well as access to finance.

Improving wholesaler-supplier relationships

Vann Chanpeth is a vegetable and fruit wholesaler in Battambang city with daily sales of three to five tons of cabbage, chili, cauliflower, mango, and other produce. He is looking to grow his business, but lacks a reliable and consistent supply. “I worked with several producers, but they are not all the same. Some of them promised to sell vegetables to me, but when harvesting time came, they sold to other buyers. And some suppliers produced low quality product but demanded high prices. We can’t sell products when the quality is not acceptable in the market,” he shared.

Buyer Vann Chanpeth and his wife selling cabbages at Phou Poy market, Battambang province.
© Feed the Future Cambodia Harvest II/2018/Solina Kong

Trust is key to establishing long-term relationships; however, in Cambodia’s horticulture sector, trust can be an issue. In addition to the constraints that buyers like Chanpeth face, producers also have difficulty committing to long-term commercial relationships with buyers. In some cases, buyers don’t pay producers on time, or they change the terms of verbal agreements and lower their payment price.

To address these constraints, Feed the Future Cambodia Harvest II (“Harvest II”) is facilitating connections between buyers and suppliers and strengthening their relationships by establishing agreements and helping them overcome the binding constraints to expanded sales. Harvest II uses a buyer-led approach, starting by identifying potential buyers and understanding their specific needs. Then, Harvest II connects them with suppliers and helps them develop their capacity to meet buyer demand.

Harvest II introduced Chanpeth to Lim Deth, a cabbage producer who is interested in developing a long-term partnership with a reliable buyer. “I used to sell my vegetables to different buyers, but they lowered their prices and some left without paying me even a cent,” Deth said. “I lost a lot of money, but I’m lucky to have met and worked with Chanpeth. He not only provided me input credit, but also paid me according to market price.”

Buyer Chanpeth collects cucumbers from farmer Lim Deth to supply to the wholesale market in Battambang city.
© Feed the Future Cambodia Harvest II/2018/Solina Kong

Harvest II works with Lim Deth and his family to strengthen their relationship with Chanpeth while also providing training on production techniques to improve the yield and quality of their produce. Chanpeth is investing in his own supply chain and in Deth’s success by offering input credit. Harvest II conducts follow-up coaching on a regular basis to learn about challenges and successes within this partnership, and help address any issues.

In its first year, Harvest II connected 27 buyers to 350 suppliers, boosting their sales by $2.5 million. “I am happy to work with Uncle Deth because he produces such good quality cabbage in response to market demand. If there is an oversupply at the market, his cabbage is the first to be sold out,” Chanpeth said.