Guide for Commune Agriculture Officers (CAOs)
Yang Saing Koma (MAFF), 27 August 2025
1. Introduction
Every harvest season, rice farmers face recurring market challenges, including:
- Fluctuating prices
- Limited access to reliable buyers
- Price speculation by some middlemen
These challenges reduce farm income, discourage investment in improved farming practices, and disrupt supply chains, limiting the consistent flow of high-quality rice. As a result, Cambodia’s rice sector competitiveness is undermined.
Contract farming is a proactive solution: a formal agreement between farmers and rice millers or traders, established before the planting season, to jointly plan production and marketing. Contract farming helps:
- Reduce market uncertainty
- Share responsibilities fairly
- Ensure a secure market for farmers while providing millers with a reliable supply of quality paddy
2. Key Principles and Benefits of a Contract Farming Agreement
Definition: Contract farming is an agreement between farmers and buyers on the production, quality, quantity, and price of crops before planting.
Key Principles to Agree Upon in Advance:
- Type of rice variety to be cultivated
- Quality standards for paddy
- Quantity of paddy to be supplied
- Harvesting period and delivery schedule
- Agreed prices or minimum guaranteed prices
- Payment terms, including timely payment to farmers
- Mechanisms for resolving disputes or contract breaches
Benefits
For Farmers:
- Secure markets with guaranteed prices
- Confidence to invest in higher-quality production
- Reduced risk of post-harvest price speculation
For Rice Millers:
- Reliable supply of paddy meeting agreed quality standards
- Stronger position in domestic and export markets
- Better planning of milling operations and cost management
3. Risks and Challenges of Contract Farming
- Production Risks: Crop failure due to pests, diseases, or extreme weather. Mitigation: Provide training on good agricultural practices, pest and disease management, and climate-resilient techniques. Include flexible clauses or insurance mechanisms if agreed by both parties.
- Market Risks: Price volatility, changes in demand, or contract breaches by buyers. Mitigation: Establish minimum guaranteed prices, diversify buyers, and strengthen collective bargaining through farmer groups.
- Quality Risks: Failure to meet agreed standards may lead to rejection or penalties. Mitigation: Provide technical guidance, monitor crop production, and implement early warning systems.
- Financial Risks: Delays in payments or lack of credit may hinder farmers. Mitigation: Encourage timely payments, support access to credit, and consider input supply agreements.
- Legal and Contractual Risks: Misunderstandings or disputes over contract terms. Mitigation: Use clear written agreements, ensure CAOs witness and register contracts, and include dispute resolution clauses.
- Coordination Challenges: Small-scale farmers may struggle to meet volume requirements or coordinate with others.
Mitigation: Form farmer groups or cooperatives, facilitate cross-commune collaboration, and provide CAO support.
4. Role of MAFF and CAOs
MAFF (Ministry of Agriculture, Forestry and Fisheries):
- Develop policies and provide technical guidance for contract farming
- Train CAOs to support farmers effectively
- Witness and register agreements
- Support farmers in meeting contractual obligations
- Facilitate access to credit for rice millers
- Promote fair, transparent, and balanced agreements
Note: MAFF is preparing a contract farming law to ensure sustainable and inclusive cooperation across the rice value chain.
Commune Agriculture Officers (CAOs):
- Advise farmers on market-oriented farming principles
- Explain contract farming benefits and risks
- Register farmers and develop production and supply plans
- Support formation of farmer groups to increase bargaining power
- Provide technical guidance to meet quality standards
- Facilitate communication, trust, and dispute resolution between farmers and millers
- Collaborate with neighboring CAOs to expand production areas and strengthen collective bargaining, forming the basis for Modern Agriculture Communities (MAC)
Practical Approach: Start with committed pilot groups, link groups across communes and districts, and gradually scale as success encourages wider participation. Review experiences and lessons learned with the participation of farmers and peer CAOs before reinforcing and expanding in the new season.
5. Conclusion
Contract farming provides a practical, proactive solution to recurring market challenges for rice farmers. By agreeing in advance on prices, quality, and quantities, farmers gain stability and fair returns, while millers secure a consistent supply.
With MAFF support and CAO guidance—especially in organizing farmers, planning production, and coordinating across communes— step by step the contract farming can become a win–win model. Proper risk management ensures sustainable outcomes, increases farmer incomes, strengthens rice value chains, and enhances Cambodia’s rice sector competitiveness.