Contract Farming Resource Centre

White Gold: The Commercialisation of Rice Farming in the Lower Mekong Basin

Year 2020

[Cramb, R. (2020). White gold: The commercialisation of rice farming in the lower Mekong Basin (p. 456). Springer Nature.]

In this publication, Rob Cramb and colleagues explore various agricultural, economic, and policy aspects involved in rice production in the Lower Mekong Basin of Southeast Asia. They specifically discuss the application of contract farming in this agricultural sector and region of the world in Chapter 16 entitled “Contract Farming of High-Quality Rice in Kampong Speu”. According to the authors’ investigations, contract farming is seen as an approach to overcome current commercialisation impediments in the Cambodian rice sector. However, little is still known about the use and impact of contract farming in rice production in Cambodia. Therefore, to better illuminate aspects of inclusion of smallholder farmers, contractual arrangements, benefits of contract farming for farmers, and the current challenges still faced in this system, a study was conducted to examine rice contract farming employed by Angkor Kasekam Roongroeung Co. Ltd. (AKR), the first agribusiness to implement a contract farming program for rice production in Cambodia. From this case study, it was found that AKR was inclusive of poor smallholder farmers allowing an increase in their rice farming returns due to access to several important benefits under this scheme. Some challenges for both AKR and contracted farmers were identified as flaws in some contractual arrangements established and technical difficulties associated with satisfying the requirements for delivering high-quality rice for exportation. It was noted that policy interventions could provide a means to address some of these challenges encountered. By overcoming such challenges, enhanced benefits for rice farmers and contract agribusinesses will be realized, simultaneously furthering the commercialisation of the rice sector and thus reducing poverty in rural areas.