Strengthening the Horticulture Sector through Contract Farming

Agricultural Cooperatives in Battambang use contract farming to guarantee consistent and quality supply

Businesses in Cambodia’s horticulture sector are often hampered by the lack of formal agreements to clarify mutual expectations in business dealings. Contract farming is a formal agreement to promote trust and clarify expectations around product quality, quantity, timing, and price. However, many actors fail to form contract farming agreements because they don’t know what’s involved and don’t understand the benefits. 

Feed the Future Cambodia Harvest II “Harvest II” encourages the adoption of contract farming as a tool of mutual benefit for both farmers and buyers. Harvest II facilitated a contract farming signing event between Tasei Agricultural Cooperative (AC) and five ACs, from Battambang and Banteay Meanchey provinces, and the buyer REMIC. The Provincial Department of Agriculture, Forestry and Fisheries (PDAFF) from Battambang served as the witness for the event. In the agreements, Tasei AC agreed to source vegetables from the five ACs based on price, quantity, type of vegetable, and other binding conditions agreed to by both parties. 

Farmers harvest curly cabbages in Tasei Agricultural Cooperative’s net houses in Battambang. 

Before entering into the agreement, Harvest II introduced these ACs to growing safe vegetables under net houses. Observing a strong interest, Harvest II connected them with Tasei AC to provide net house building services and sign agreements to work together. Among these ACs, PichChenda AC originally focused on growing longan but after seeing the benefits, they expanded to also include vegetables. Harvest II supported 30 of the AC’s members’ joining Cam-GAP trainings conducted by PDAFF. 

Prior to the signing of the agreement, Tasei AC sourced around 600 kg of vegetables per day from its members, but after signing the agreement, they can now source an average of two tons per day. Tasei AC supplies these vegetable to REMIC, one of the leading buyers in Phnom Penh, and other buyers across the provinces. Additionally, Harvest II connected Tasei AC with Laey Baitong, a vegetable supplier in Battambang. The two parties have partnered together to capture the growing market demand. 

Harvest II facilitates a contract farming signing event between Tasei AC with five other ACs, and buyer REMIC, witnessed by PDAFF.

Even though many businesses were negatively impacted by the pandemic, Tasei AC has expanded, increasing from 26 to 49 net houses and building an estimated 120 net houses for other cooperatives across the provinces. The expansion created jobs for 26 Cambodian migrant workers returning from Thailand, helping them generate income during the crisis. 

The leader of Tasei AC, Mr. Nob Nun, has worked as a farmer in the past. This experience inspired him to help other farmers implement better farming techniques. He welcomes new ideas and support from various development projects including Harvest II. He shared, “Through Harvest II, we have expanded our services, building more net houses and sourcing more vegetable from other ACs. Through contract farming, farmers are happy to work with us because we help them find markets for their products.” 

Tasei AC is one of many safe vegetable suppliers, working to not only expand their cooperative but also help other ACs grow. Through the establishment of strong connections with multiple actors, Tasei AC brings quality and safe local products to Cambodia’s people, encourages healthy living and promotes the country’s sustainable landscape.