Evaluation of Organic Rice Contract Farming Model in Cambodia

Abstract

In Cambodia, organic farming under contract farming scheme is considered as one of the measures for better access to markets and poverty reduction since 2012. Previous literature revealed that organic rice farmers can generate more profit by engaging in contract farming. But only a few organic farming cases under contract farming succeeded. Since there was a lack of empirical study on current condition and issues of contract farming design and arrangement, this study clarified the effectiveness of organic rice contract farming arrangement and determined the most suitable contract farming model for small-scale farmers to maximize economic benefits. From a total of 5,053 organic rice contract farming households in Preah Vihear province, a total of 90 respondents were randomly selected. In the study area, two different organic rice contract farming models were found, namely intermediary model (Model A) and the multipartite model (Model B). Economic analysis approach revealed that even farmers in model A received a higher rice price than model B, but there were still model A farmers who did side-selling much more than model B farmers. Thus, third-party in model B seemed to play an essential role in contract farming to make proper arrangements as well as to balance the bargaining between farmers and contractors. In general, model B contract farming (also known as multi partite model) is recommended for organic rice farmers to maximize their economic benefits as well as profits.