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.