Rice value chain report in Kampot and Takeo provinces

Paddy value chain study in Kompot and Takeo provinces 1

Synthesis Report Paddy Value Chain Study

in Kompot and Takeo Provinces

Funded by CARF/CAVAC (Cambodia Agriculture Research Fund)

Implemented by CEDAC

January 2010


Tables of Contents

I. INTRODUCTION ....................................................................................................................................... 4

1.1. RATIONALE .............................................................................................................................................. 4 1.2. OBJECTIVES OF THE RESEARCH ..................................................................................................................... 4 1.3. METHODOLOGY ........................................................................................................................................ 5

II. RESULTS OF THE STUDY ........................................................................................................................... 6

2.1 GENERAL STATISTICS OF THE VILLAGES STUDIED .................................................................................................... 6 2.2 PRODUCTION ................................................................................................................................................ 7

2.2.1. Rice varieties used in the studied districts ....................................................................................... 7

2.3 PADDY PRODUCTION ...................................................................................................................................... 8

2.4 PRODUCTION COST....................................................................................................................................... 10 2.4.1 Usage of chemical fertilizers ......................................................................................................... 10

2.4.2 Natural Fertilizer ........................................................................................................................... 11 2.4.3 Wet season paddy production cost ............................................................................................... 12 2.4.4 Dry season paddy production cost ................................................................................................ 13

2.4.5 Paddy Harvesting and Yield ........................................................................................................... 14

2.5 PRODUCTION COST OF PADDY PER KILOGRAM .................................................................................................... 14

2.6 CREDIT SERVICES .......................................................................................................................................... 15 2.7 CHARACTERISTIC OF FOOD SECURITY IN THE VILLAGE .......................................................................................... 16

2.8 SUPPLY SIDE ............................................................................................................................................... 18

2.9 DEMAND SIDE ............................................................................................................................................. 21 2.9.1 Demand for paddy by paddy collectors / middlemen.................................................................... 22

2.9.2 Demand of paddy by wholesalers ................................................................................................. 25 2.9.3 Demand for rice by retailers .......................................................................................................... 26

2.9.4 Demand for rice by customers ....................................................................................................... 27 2.10 PRICE TRENDS......................................................................................................................................... 28

2.11 ADVANTAGES AND EFFECTS OF COMMUNITY-BASED RICE MILLS ........................................................................ 29

2.12 SWOT ANALYSIS .................................................................................................................................... 32

2.12.1. SWOT analysis of farmer producers ......................................................................................... 32 2.12.2. SWOT analysis of paddy collectors ........................................................................................... 33

2.12.3. SWOT analysis of rice millers .................................................................................................... 34

2.12.4. SWOT analysis of wholesalers .................................................................................................. 34 2.12.5. SWOT analysis of retailers ........................................................................................................ 35

III. CONCLUSION ......................................................................................................................................... 36


Tables

TABLE 1: GENERAL STATISTICAL INFORMATION OF THE VILLAGES STUDIED................................................................................ 6

TABLE 2: PADDY VARIETIES IN THE DISTRICTS STUDIED ......................................................................................................... 7 TABLE 3: POPULAR RICE VARIETIES MOSTLY GROWN BY FARMERS .......................................................................................... 7 TABLE 4: LAND SIZE FOR PADDY PRODUCTION PER FAMILY .................................................................................................... 8

TABLE 5: PERCENTAGES OF FARMER FAMILIES CULTIVATE DRY SEASON PADDY PRODUCTION ........................................................ 9

TABLE 6: FAMILY'S EXPENSE ON PADDY PRODUCTION (EXCLUDED OWN LABOUR) ..................................................................... 9 TABLE 7: EXPENSE ON CHEMICAL FERTILIZER PER FAMILY .................................................................................................... 10

TABLE 8: EXPENSE ON CHEMICAL FERTILIZER PER VILLAGE ................................................................................................... 11

TABLE 9: TYPES OF CHEMICAL FERTILIZERS MOSTLY USED BY THE FARMERS: ........................................................................... 11

TABLE 10: PERCENTAGE OF FARMERS MAKE NATURAL FERTILIZER/COMPOST PER VILLAGE ........................................................ 12 TABLE 11: EXPENSE ON WET SEASON PADDY PRODUCTION PER HA (RIELS/HA) ....................................................................... 13

TABLE 12: EXPENSE ON DRY SEASON PADDY PRODUCTION PER HA (RIELS/HA) ........................................................................ 13 TABLE 13: YIELD OF WET AND DRY SEASON PADDY PRODUCTION ......................................................................................... 14

TABLE 14: WET SEASON PADDY PRODUCTION PER KILOGRAM ............................................................................................. 15

TABLE 15: DRY SEASON PADDY PRODUCTION PER KILOGRAM .............................................................................................. 15

TABLE 16: FOOD SECURITY IN THE STUDIED VILLAGES ........................................................................................................ 17

TABLE 17: VOLUME OF RICE NEEDED FOR CONSUMPTION IN THE VILLAGE .............................................................................. 17

TABLE 18: AMOUNT OF PADDY PRODUCER IN THE STUDIED VILLAGES ................................................................................... 21

TABLE 19: LIST OF COMMUNITY BASED RICE MILLS ............................................................................................................ 29

Graphs

GRAPH 1: AVERAGE AMOUNT OF CHEMICAL FERTILIZERS AND EXPENSE PER FAMILY PER YEAR .................................................... 10

GRAPH 2: AVERAGE AMOUNT AND EXPENSE OF CHEMICAL FERTILIZER PER VILLAGE PER YEAR .................................................... 11

GRAPH 3: AVERAGE EXPENSE OF WET SEASON PADDY PRODUCTION (RIEL/HA) ....................................................................... 12

GRAPH 4: AVERAGE EXPENSE OF DRY SEASON PADDY PRODUCTION (RIEL/HA) ........................................................................ 13

GRAPH 5: AVERAGE YIELD OF PADDY PRODUCTION (T/HA) ................................................................................................. 14

GRAPH 6: PRODUCTION COST OF WET AND DRY SEASON PADDY PER KILOGRAM (RIEL/KG) ........................................................ 15

GRAPH 7: PERCENTAGE OF FARMERS ASK FOR CREDIT SERVICE FROM EACH MFI ..................................................................... 16

GRAPH 8: AMOUNT OF RICE LACK PER FAMILY (KG/FAMILY/YEAR) ....................................................................................... 17

GRAPH 9: PERCENTAGE OF SOURCES THAT VILLAGERS BUY RICE FROM .................................................................................. 18

GRAPH 10: AVERAGE PADDIES PRODUCED AND SOLD PER FAMILY PER YEAR ........................................................................... 19

GRAPH 11: AVERAGE PADDIES PRODUCED AND SOLD PER VILLAGE PER YEAR .......................................................................... 19

GRAPH 12: INCOME FROM SELLING PADDY PER FAMILY PER YEAR (RIEL/FAMILY/YEAR) ............................................................ 20

GRAPH 13: INCOME FROM SELLING PADDY PER VILLAGE PER YEAR (RIEL/VILLAGE/YEAR)........................................................... 20

GRAPH 14: PERCENTAGE OF PADDY VARIETIES BOUGHT BY THE PADDY COLLECTORS/MIDDLEMEN IN KOMPOT.............................. 22

GRAPH 15: PERCENTAGE OF PADDY VARIETIES BOUGHT BY THE PADDY COLLECTORS/MIDDLEMEN IN TAKEO ................................. 23

GRAPH 16: PROBLEMS FACED BY THE PADDY COLLECTORS/MIDDLEMEN ............................................................................... 23

GRAPH 17: VOLUME OF PADDIES SELLS FROM PADDY COLLECTORS IN KOMPOT (%) ................................................................ 24

GRAPH 18: VOLUME OF PADDIES SELLS FROM PADDY COLLECTORS IN TAKEO (%) ................................................................... 25

GRAPH 19: VOLUME OF PADDIES SELLS FROM WHOLESALERS IN KOMPOT (%) ....................................................................... 25

GRAPH 20: VOLUME OF PADDIES SELLS FROM WHOLESALERS IN TAKEO (%) .......................................................................... 26

GRAPH 21: VOLUME OF RICE BUY BY RETAILERS IN KOMPOT FOR SELLING (%)........................................................................ 26

GRAPH 22: VOLUME OF RICE BUY BY RETAILERS IN TAKEO FOR SELLING (%) ........................................................................... 27

GRAPH 23: PERCENTAGE OF RICE VOLUME BUY BY DIFFERENT CUSTOMERS IN KOMPOT ........................................................... 27

GRAPH 24: PERCENTAGE OF RICE VOLUME BUY BY DIFFERENT CUSTOMERS IN TAKEO .............................................................. 28

GRAPH 25: PRICE TREND OF TRADITIONAL PADDY VARIETIES ............................................................................................... 28

GRAPH 26: PRICE TREND OF IR VARIETY ......................................................................................................................... 29


I. INTRODUCTION

1.1. Rationale About 80 percent of Cambodia’s population of 14 million inhabitants live in rural areas, depending primarily on rice production for their livelihoods. There are around 1.8 million rice farming households with on average 5-6 members per household. The majority are subsistence rice farmers with land holdings of less than 1 hectare (ha) per family. Chumkiri, Dong Tong and Kompong Trach districts are located in Kompot province. Angkor Borey, Borey Chulsa and Koh Andet are districts located in Takeo province. These districts are located close to the Vietnam border where the farmers produce paddy for their own consumption and export to Vietnam. To date, there has been no adequate in-depth study of the paddy value chain in these districts, especially of rice farmer producer communities, other rice producers in the villages and local stakeholders. The results of research conducted in these districts will provide critical knowledge and marketing information to all of them. While there are some paddy producer groups set up in the proposed target areas to be studied, they lack information for developing their business plans and marketing strategies.

There are many paddy market chain actors. A study that includes a SWOT analysis of each actor has not yet been conducted so it is difficult to generate efficient and effective ways for improving the rice market chain in these districts. A more detailed analysis will enable government and NGOs/institutions to provide support to ensure that all the market chain actors are able to benefit equitably.

Based on farmers’ observation, there is a huge amount of rice exported from the proposed studied districts to Vietnam especially after the harvesting season in December or January, but some farmers also buy imported rice from outside their community or from a neighboring country (from Vietnam and Thailand) for family consumption as well. At the current time, there is no study to check the balance between amount of imported rice and exported paddy in the proposed study districts and there is also no financial flow analysis in terms of rice in those communities. It is particularly important to determine the estimated volume of rice exported from the studied districts to Vietnam.

Recently, CEDAC has set up community-based rice mills in the proposed study districts. Based on the information from farmers, farmers can get better prices where there are community-based rice mills. The rice middlemen give better prices to farmers and it is easier for the traders to collect paddy. However, a detailed study on the effectiveness and impact of community-based rice mills has not yet been conducted.

1.2. Objectives of the research The objectives of the research were as follows: - To assess the trends in rice production and import and export in the studied areas. - To determine market value chains and farmers’ position in the chains. - To conduct financial flow analyses in term of paddy export and rice import in the villages

studied. - To assess the impact of community-based rice mills supported by CEDAC.


1.3. Methodology The paddy value chain study was conducted in 50 villages across 12 communes, in 6 districts of Kompot and Takeo provinces. The research team selected 25 villages across 6 communes, in 3 districts in Kompot province. The research team also selected the same number in Takeo province. The following is the description of the roles and main responsibilities of the research team: - Team leader will be responsible for the overall responsibility of the research project. This

includes formation of the study team, the facilitation of a reflection session with the study team for writing up the study findings and also for writing the synthesis report.

- Data collectors will be divided into groups: Each group will be responsible for making appointments with villagers, conducting interviews (group discussions, individual interviews). In addition, each group will take responsibility for writing individual interview notes, group discussion notes. Moreover, they will be responsible for writing the district reports and case studies.

Concerning the data collection method, the research team has conducted both secondary data and primary data collection. The focus group discussions with key informants and respondent interviews were conducted in order to find out the main findings of this research project. Checklists and questionnaires were developed for group discussions and respondent interviews. The following are the number of various respondents to be interviewed. Expected Actual Results % 400 farmers will be interviewed 401 100 60 paddy collectors will be interviewed 44 73 30 wholesalers will be interviewed 27 90 42 rice retailers will be interviewed 40 95 42 rice millers will be interviewed 36 85.7 60 customers will be interviewed 60 100 50 village chief will be interviewed 50 100 2 custom officers will be interviewed 0 0 6 agricultural district officers will be interviewed 6 100 50 focus group discussion meetings will be organized 49 98 It is to emphasize that the research team could not meet the custom officers at the Vietnam border due to the custom officers were not at the offices. The custom officers come and work in the offices about a few days per month. On average, the research team was able to collect about 94.5 % of the total planned number of questionnaires.


II. RESULTS OF THE STUDY

2.1 General statistics of the studied villages Table 1: General statistical information of the villages studied

Description Kompot Takeo

Chhumkiri Dong Tong

Kompong Trach

Angkor Borey

Borey Chuolsa

Koh Andert

Number of families per village 391 182 261 254 221 167 Number of population per village

1803 1740 1384 1346 1004 806

Number of landless families per village

6 2.5 2.5 18 13 4

Number of families with no draft animals for farming

30 11 20 70 90 51

Total village land (hectare) 603 390 679 672 527 359 Land area for house settlement (hectare)

138 44 40 60 29 19

Land area for wet season rice (hectare)

362 166 222 156 185 264

Land area for dry season rice (hectare)

217 15 40 218 303 113

Source: village statistical book (2009) On average, there are 5-6 members per family. About 50% of the total family members are the main farming labour, especially for paddy cultivation. The majority of the farmer families in the studied villages are rice-based farming families except for some landless families who don't have a paddy field. Based on the table above, the number of landless families is 3% of the total families per village on average. In other words, 97% of all families in the villages are rice-based farming families. The average number of cattle per family is three. The farmers prefer to use cows as draft animal rather than buffalo. Among the studied villages in Kompot province, only 3.45% of farmers interviewed use buffalo for farming activities; only 1% of farmers interviewed in Takeo use buffalo. Concerning dry season paddy production, farmers normally rent agricultural machines for ploughing, harvesting and threshing. The rent of agricultural machines is one among other factors contribute to the increase of production cost of dry season paddy production. Based on the data presented in the table above, the land area of wet season paddy production in some studied districts is larger than dry season paddy production and vice versa. For instance, the largest wet season paddy field is in Chhumkiri district, Kompot province. But the largest dry season paddy field is in Boreychulsa district, Takeo province. There are more farmers cultivate dry season paddy in Takeo, which is why the area of dry season paddy production is bigger than in Kompot.


2.2 Production

2.2.1. Rice varieties used in the studied districts

Table 2: Rice varieties in the studied districts

Early varieties Medium Varieties Late Varieties 3 Sanlik Changkom Rompak 6 Khuor Damnerb Kanlas Chhmar Prom 8 Khuor Damnerb Krachokses Damnerb Chhmal Angkongh IR Damnerb Khmoa Battambang Makari Kha 1 Kha 8 Nam Kong Bong Kha 4 Kha 9 Neang Kra Ob Kong Til Kong Sar Neang Noy Krachork Chab Krahorm Chin O M Krahorm Sral Krahorm Hamat Philippine Neang Dom Krahorm Laksenlik Senpidour Neang Meas Krahorm Thngon Srov Yuon Neang Smer Neang Chin Pka Khnhey Neang Kong Pka Malis Neang Minh Pka Romdol Pka Sla Porng Lorlok Pka Sla Thngon Prasac Pka Trakeat Romchol Rang Chey Sambok Angkrong Smer Sambok Tortim Sen Sangha Somaly Sophor Dong Srov Sar Totally, there are 55 rice varieties in the studied districts, including 12 early-maturing varieties, 24 medium-maturing varieties and 19 are late-maturing varieties. In case of the early rice varieties, farmers could harvest it for about 3 months from planting to harvesting, medium rice varieties is about 4-5 months and the late rice varieties is about 6 months. There are 7 rice varieties that are popularly grown by farmers. Based on the analysis of individual interviews with farmers, majority of the farmers prefer to use early and medium rice varieties because they can harvest their paddy at the early time and they also expect to have adequate rain water. The table below shows the name of popular varieties and their special characteristics. Table 3: Popular rice varieties grown by most farmers

Name of popular varieties Special characteristics noted

1. Senpidour

- good taste and smell - soft and aromatic rice so it also attract pests (rats, insects, etc) - high marketing price - the farmers can harvest it early

2. IR - high yield - the farmers can harvest early to support the family's consumption

3. Makari

- high yield - more tolerant to flood and drought - it is better market price than IR variety - the life cycle is short that enables farmers to harvest early - good growth even on poor soil

4. Pka Malis - lower yield if compared to normal rice varieties but high marketing

price


- soft and fragrant rice - more pests

5. Krahorm Laksenlik

- high yield - adapts to most kinds of soils - strong and high trunk - it is not soft so that it is appropriate for the family that have many

members - resistant to disease

6. Nam Kong Bong (504)

- high yield - it is can be harvested early - good market demand for exporting to Vietnam

7. Banteay Meas - favourable for paddy traders - more tolerant to drought - farmers can harvest a good yield

2.3 Paddy Production Amongst the studied villages in Kompot province, only 45.8% cultivated dry season paddy production. In Kompot province, Chhumkiri district has more farmers cultivating dry season paddy production as it has more water sources compared to other districts. Chhumkiri is also a bigger district in terms of the number of families per village compared to other studied districts, both Kompot and Takeo provinces. Farmer families in Koh Andet district have bigger paddy fields because of lower population density compared to other studied districts. All studied villages in Takeo province conduct dry season paddy production. On average, farmers have 1.5 ha of paddy field per family. In Borey Chulsa and Koh Andet districts in Takeo province, the farmers possess about 2.3 ha per family. According to the table below, dry season paddy production is mostly conducted in the districts of Takeo province. Table 4: Land size for paddy production per family


Chhumkiri Dong Tong Kompong Trach

Angkor Borey

Borey Chuolsa

Koh Andert

Total paddy field holding per family (family/ha)

Maximum 7 4 4 4 5 5

Average 1.7 1.37 1.52 1.54 2.24 2.38

Minimum 0.2 0.4 0.4 0.12 0.5 0.5

Total land area for wet season paddy production holding per family (family/ha)

Maximum 7 5 4 1.5 8 5.4

Average 1.7 1.35 1.52 0.6 1.6 1.63

Minimum 0.2 0.26 0.4 0.1 0.2 0.5

Total land size for dry season paddy production holding per family (family/ha)

Maximum 2 2 - 12 4 4.5

Average 0.75 0.54 - 1.54 1.56 1.28

Minimum 0.25 0.1 - 0.16 0.2 0.2 Source: Individual interview with farmers Generally, the land for cultivating dry season paddy production is the same land used for wet season paddy production. Therefore, the farmer cultivated the same field for both wet and dry season paddy production. Dry paddy production is normally conducted after the harvesting of


wet season paddy production. Particularly, in some villages located in districts of Takeo province, the farmers apply only dry season paddy production. In Takeo, approximately 50% of the total cultivated fields are used for dry season paddy production. Table 5: Percentage of farmer families cultivated dry season paddy production


Chhumkiri Dong Tong

Kompong Trach

Angkor Borey

Borey Chuolsa

Koh Andert

Percentage of farmer families conducting dry season paddy production in the studied districts (%)

41.33 12.5 N/A 78.38 62.30 66.15

About 19% of the interviewed farmers in the studied villages in Kompot province conduct dry season paddy production. At the same time, 69.5 % of interviewed farmers in the studied villages of Takeo province conduct dry season paddy production. Generally, many more farmers in Takeo apply dry season paddy production than in Kompot. The studied villages in Takeo are located close to Vietnam border, and farmers produce dry season paddy mainly for selling to Vietnamese traders. Most of the farmers in Takeo sell out the dry season paddy production, but buy in the wet season paddies from other villages for family consumption. Table 6: Family's expenses on paddy production (excluding own labour)



Angkor Borey

Borey Chulsa

Koh Andet

Expense on wet paddy production (Riels/family/year)

Maximum 4,197,000 1,550,000 2,080,000 1,942,000 3,936,000 5,941,000

Average 574,000 337,800 374,000 617,000 1,532,800 1,766,000

Minimum 500,000 80,000 56,000 78,000 183,700 20,4000

Expense on dry paddy production (Riels/family/year)

Maximum 743,800 756,700 N/A 6,600,000 8,085,000 481,5000

Average 238,000 240,900 N/A 1,867,000 3,165,500 1,887,600

Minimum 140,000 84,600 N/A 225,000 798,500 744,000

Based on the table shown above, it is able to know that, in Kompot province, the expense on dry season paddy production is lower than the expense on wet season paddy production. on contrary, the expense on dry season paddy production in Takeo province is more expensive than the expense for wet season paddy production. Wet season paddy production is normally started in the rainy season, in June or July. However, this is highly dependent on the availability of rains. If there are adequate rains early the rainy season, the farmers are able to cultivate rainy season paddy production early. In case of dry season paddy production, the farmers usually cultivate it after harvesting rainy season paddy production. Based on farmers' cropping calendar, the farmers harvest rainy season paddy production in December and January. So, the dry season paddy production starts from January until March or April. In Takeo province, some farmer families can cultivate two crops for dry season paddy production when they have adequate water.


2.4 Production cost 2.4.1 Usage of chemical fertilizers

Generally, all farming families in the studied villages use chemical fertilizers for the paddy cultivation. The quantity of chemical fertilizer used is different according to the methods of the paddy production. Specifically, the farmers used a lot of chemical fertilizers and chemical pesticides for dry season paddy production, especially in the studied districts of Takeo province. Due to dry season paddy production, the farmers in Takeo province use more chemical fertilizers compared to the farmers in Kompot province. On average, one family uses 125 kg/year. But the farmers in Takeo use around 483 kg/family/year, almost four times higher than the farmers in Kompot province. Table 7: Expense on chemical fertilizer per family


Chhumkiri Dong Tong

Kompong Trach

Angkor Borey

Borey Chulsa

Koh Andet

Amount of chemical fertilizer use per family per year (kg/family)

Maximum 500 200 300 1175 1900 1600

Average 150 75 150 350 550 550

Minimum 25 25 25 50 100 100

Total expense on chemical fertilizers per family per year (Riel/family/year)

Maximum 1150000 460000 690000 2350000 3200000 3700000

Average 345000 172500 345000 702000 1148000 1254000

Minimum 57500 57500 57500 100000 160000 270000 Source: Individual interview Graph 1: Average amount of chemical fertilizers and expense per family per year

Additionally, based on the analysis of individual interviews with farmers, villages in Kompot province use on average approximately 36.65 tons/village/year of chemical fertilizer. The average use of chemical fertilizers in studied villages in Takeo province was 139 tons/village/year.


Table 8: Expense on chemical fertilizer per village

Description Kompot Takeo Chhumkiri Dong

Tong Kompong Trach

Angkor Borey

Borey Chuolsa

Koh Andert

Amount of chemical fertilizer use per village per year (ton/village)

Maximum 192 36 77.4 270 400 254

Average 57.75 13.5 38.7 131 204 82

Minimum 9.63 4.5 6.5 85 58 25

Total expense on chemical fertilizers per village per year

Maximum 422,400,000 79,200,000 170,280,000 541,000,000 686,000,000 508,500,000

Average 127,050,000 29,700,000 85,140,000 224,430,000 327,379,000 162,770,000

Minimum 21,186,000 9,900,000 14,300,000 85,000,000 116,000,000 48,260,000

Source: group discussion Graph 2: Average amount and expense of chemical fertilizer per village per year

There are 8 types of chemical fertilizers widely used in the studied districts. They are listed in the table below. Table 9: Types of chemical fertilizers used most often by farmers:

Name of chemical fertilizer / Trade name Scientific name / Formula AMERICA N/A DAP 18.46.0 FRUIT1 20-20-25+TL NPK 16.20.0 Buffalo 4.10.10 UREA 46.0.0 PHILIPPINE 16.16.18 16 20 0 16.20.0

2.4.2 Natural Fertilizer

At the same time, farmers also save natural fertilizer or compost for paddy production. Farmers can make an average amount of compost of 2.5 ton/family/year. The maximum is

1 Fruit and Buffalo are names of chemical fertilizer called by the community farmers


about 5 tons/family/year and the minimum is 0.5 ton/family/year. It is to note that the compost is used only for wet season paddy production. In case of dry season paddy production, the farmers use only chemical fertilizers. Farmers who are cultivating organic paddy try to save natural fertilizer/compost in order to fertilize their paddy field, as it is needed to follow the standard of organic paddy. According to the individual interviews with farmer respondents, farmers who are members of organic paddy producer groups confront a shortage of organic matter for compost making, which is a barrier for them to expand the arable land for organic paddy production. It should be emphasized that some organic paddy producer groups were established in the studied villages of Kompot province under the facilitation and support by NGOs, such as GTZ and CEDAC. Table 10: Percentage of farmers who making natural fertilizer/compost per village


Chhumkiri Dong Tong

Kompong Trach

Angkor Borey

Borey Chuolsa

Koh Andert

Percentage of farmer families making natural fertilizer per village (%)

90 92 93.5 82 46.5 69

2.4.3 Wet season paddy production cost

Based on the data in the table below, the production cost of dry season paddy production is generally higher than the wet season paddy production. The average expense of wet season paddy production is around 1.3 million riels. About 50% of the total production cost is for hiring labour and payment for the cost on external agricultural inputs (chemical fertilizer and pesticide); the other 50% is for own labour costs. Graph 3: Average expense of wet season paddy production (riel/ha)


Table 11: Expense on wet season paddy production per ha (riels/ha)

Province District

Production cost (riels/ha) Own labour cost (riel/ha)

Maximum Average Minimum Maximum Average Minimum Kompot Chhumkiri 1120,000 338,000 200,000 1,487,000 575,000 110,000

Dong Tong 1150,000 347,000 124,000 1,663,000 738,000 105,700

Kompong Trach 770,000 305,000 100,000 1,822,500 685,000 110,000 Takeo Angkor Borey 1200,000 984,000 803,000 2,248,000 620,000 144,700

Borey Chuolsa 1688,000 963,000 750,000 2,555,000 781,000 111,000

Koh Andert 1740,000 1160,000 460,000 1,719,000 454,000 106,000

2.4.4 Dry season paddy production cost

The production cost for dry season paddy production in Takeo is higher than in Kompot, because farmers in Kompot cultivate smaller paddy fields than the farmers in Takeo. The farmers in Takeo conduct dry season paddy production for selling, mainly to Vietnam. Therefore, that is why the farmers in Takeo can produce more volume of paddy for selling. They normally use similar production methods and agricultural inputs as Vietnamese farmers.

Graph 4: Average expense of dry season paddy production (riel/ha)

Table 12: Expense on dry season paddy production per ha (Riels/ha)

Province

District

Production cost (Riels/Ha) Own labour cost (riel/ha)

Maximum Average Minimum Maximum Average Minimum

Kompot Chhumkiri 2880000 572000 125000 1,392,000 792,000 132,000

Dong Tong 1300000 377000 109000 2,505,000 1,356,000 452,300

Kompong Trach 1585000 363000 100000 N/A N/A N/A Takeo Angkor Borey 2550000 1606000 750000 1,658,700 704,600 187,500

Borey Chuolsa 3053000 2388000 1500000 1,315,000 679,000 110,000

Koh Andert 2922000 2336000 1250000 1,172,000 431,000 105,000


2.4.5 Paddy Harvesting and Yield

Generally, the yield of paddy production in the studied villages of Takeo province is higher than in Kompot province for both wet and dry season. Based on the graph below, in case of Kompot province, the yield of dry season paddy production is lower than in the wet season. This is opposite to Takeo. In Takeo province, the yield of dry season paddy production is higher because the farmers mainly produce dry season paddies for selling; dry season paddy production is a commercial activity of the farmers in the studied villages in Takeo.

Graph 5: Average yield of paddy production (t/ha)

Table 13: Yield of wet and dry season paddy production


Chhumkiri Dong Tong

Kompong Trach

Angkor Borey

Borey Chuolsa

Koh Andert

Yield of wet season paddy production (ton/ha)

Maximum 5.5 3.5 3 3.3 8 3.6

Average 2.8 2.4 2.53 3 3 3.1

Minimum 2.5 1.1 0.5 2.1 1.5 2.3

Yield of dry season paddy production (ton/ha)

Maximum 4.5 3 2.27 5.5 10 4.5

Average 3 2.3 2.19 4 4 3.5

Minimum 2.7 1.5 2 2.5 2.5 3

2.5 Production cost of paddy per kilogram In Kompot, the farmers spend around 390 riels on average to produce one kilogram of paddy from wet season production. At the same time, the farmers in Takeo province spend about 655 riels to produce one kilogram of paddy from wet season production. It should be noted that the farmers in the studied villages in Takeo normally use higher external agricultural inputs than in Kompot province, which is why the production cost of paddy per kilogram is more expensive than in Kompot.


Graph 6: Production cost of wet and dry season paddy per kilogram (riel/kg)

Table 14: Wet season paddy production per kilogram


Chhumkiri Dong Tong

Kompong Trach

Angkor Borey

Borey Chuolsa

Koh Andert

Average total expense on production of wet season paddy production (riles/ha)

913,000 1,085,000 990,000 1,604,000 1,744,000 1614,000

Average yield of wet season paddy production (ton/ha)

2800 2400 2530 3000 3000 3100

Production cost of wet season paddy production (riel/kg)

326 452 391 534 580 520

Table 15: Dry season paddy production per kilogram


Chhumkiri Dong Tong

Kompong Trach

Angkor Borey

Borey Chuolsa

Koh Andert

Average total expense on production of dry season paddy production (riles/ha)

1364,000 1,733,000 1437,000 2,310,600 3,067,000 2,767,000

Average yield of dry season paddy production (ton/ha)

3,000 2,300 2,190 4,000 4,000 3,500

Production cost of dry season paddy production (riel/kg)

455 750 656 577 766 790

2.6 Credit services There are nine credit providers in the studied districts as listed in the graph below. These include international organizations, like FAO and IFAD, as well as Micro Finance Institutions (MFIs). FAO and IFAD are the donors of some community development projects in the studied districts, the projects that are financially supported by FAO and IFAD provided to farmers some no-interest loan, for example the farmers can borrow some money to buy chicks, piglets for raising, etc. Some farmers also borrow money from private moneylenders and relatives to invest in paddy production and other purposes. The interest charged by the MFIs is around 3 % per month on average. Normally, the interest rate of loans from private moneylenders is higher than the MFIs.


About 69% of the studied villages in Kompot and Takeo have collective saving groups, which were formed through the facilitation of CEDAC's projects. The graph below indicates that 46% of total interviewed farmers asked for credit services from the collective saving groups. However, the size of the loan is smaller than from MFIs and banks. If farmers are members of a collective saving group, they prefer to borrow from their own collective saving group. In the studied villages in Takeo province, the main purpose of borrowing money from MFIs/banks is to invest in dry season paddy production. The farmers need further capital in order to pay for external agricultural inputs such as chemical fertilizers, pesticides, hiring labour, petroleum, etc. There are many MFIs/banks operating in the studied villages in Takeo as there are many farmers doing dry season paddy production in those villages. Therefore, the farmers need to pay interest on a monthly basis. The loans can be paid after harvesting season. According to the interviews with farmers, about 30% of total production costs are financed through loans from MFIs. Graph 7: Percentage of farmers asking for credit from each MFI

2.7 Characteristic of Food Security in the Village According to the table below, the number of families who lack rice for family consumption in the studied villages in Takeo is higher than Kompot; 53% of the all families experienced a shortage of rice in Takeo, but only 46% in Kompot. As noted previously, the farmers in Takeo cultivate dry season paddy production for selling out and buy in wet season paddy from neighbouring villages for home consumption. For this reason the percentage of families who lack rice for consumption in the villages of Takeo is higher than Kompot. Most of the families lack rice for 1 to 3 months per year. At the same time, there are families who lack rice throughout the whole year, and most of them are the landless families.


Graph 8: Amount of rice shortfall per family (kg/family/year)

Based on the graph above, the amount of rice shortage for family's consumption in Takeo province is about three times more than the amount of rice shortage in Kompot province. Table 16: Food security in the studied villages


Chhumkiri Dong Tong

Kompong Trach

Angkor Borey

Borey Chuolsa

Koh Andert

Average number of families per village

391 182 261 254 221 167

Percentage of families who lack paddy for family consumption (%)

55 44 40 45 60 55

Percentage of families who lack paddy for family consumption

throughout the year (%) 2.5 1.22 1 4.8 33 3.3

Percentage of families who lack paddy for family consumption 6-12

months (%) 10 12 9 18 17 19


months (%) 15.39 11 10.5 12.60 12.77 9.30


months (%) 25 19.5 18.5 17.5 26 22

On average, the families in the villages of Kompot province have a shortfall of 219 kg/family/year. Families in Takeo province have a shortfall of 800 kg on average. In Kompot, one family spent about 406,200 riels on average to cover the shortage of rice for the family's consumption in the whole year. In Takeo, one family spent about 1,034,100 riels to cover the shortage of rice for the family's consumption throughout the year.

Table 17: Volume of rice needed for consumption in the village


Chhumkiri Dong Tong

Kompong Trach

Angkor Borey

Borey Chuolsa

Koh Andert

Quantity of rice lack per family (kg/family/year)

Average 274 162 221 587 977 847


Maximum 484 400 466 2,017 2,689 3,630

Minimum 135 52 77 158 136 71

Quantity of rice lack per village (ton/village/year) Average

(ton/village) 59 13 23 67 129 78

Maximum 104 32 48.5 230 355 334

Minimum 29 4.2 8 18 18 6.6

Expense per family for rice shortage (riel/family/year)

Average 498,800 351,800 368,000 738,400 1,055,000 1,309,000

Maximum 800,200 616,000 592,700 1,712,700 1,893,000 5,362,500

Minimum 220,700 54,000 265,900 345,800 438,000 314,000

Expense on rice per village per year (riel/village/year)

Average 98,298,000 24,823,000 41,255,000 120,330,000 232,163,000 140,024,000

Maximum 168,975,000 57,350,000 87,134,000 414,477,000 639,870,000 600,600,000

Minimum 52,986,600 7,560,000 14,093,000 32,000,000 32,900,000 11,880,000

Based on the data from individual interviews with the farmers, majority of families who lack rice for their consumption buy rice from other farmers in their villages or they buy rice from rice millers and rice retailers at the commune level. However, some families who are the district dwellers buy rice from rice retailers at the district level, which is located outside their villages. Graph 9: Percentage of sources that villagers buy rice from

2.8 Supply Side

The majority of the farmer families in the studied villages can produce adequate paddy for family consumption and sell surplus paddy in the market. About 38% of the families in Kompot province can produce paddy for selling after supplying for own family's needs. Approximately 46% of the families in the studied villages s in Takeo province can produce paddy for selling after meeting the family's consumption. Therefore, the number of families in Takeo who can produce surplus for selling is higher than in Kompot as the farmers produce dry season paddy for selling purposes.


However, based on the results of group discussions in the studied villages, almost all of the families in the villages sell some paddy. However, some families don’t have enough paddy for family needs after they sell some of their rice and later on need to buy rice in. The farmers need to sell paddy immediately after harvesting because they need money to repay loans for external agricultural inputs and for other family purposes. In the villages of Kompot province, about 57.5% of the total paddy harvested per family is sold. At the same time, 70.5% of the total paddy harvested per family is sold in the studied villages of Takeo province. Therefore, the farmers in those villages mainly cultivate paddy for selling. The amount of paddy produced for selling by the farmers in Takeo is about four times higher than the farmers in Kompot province. Graph 10: Average paddy produced and sold per family per year

Based on the graph below, the villages in Takeo province are able to produce paddy three times more if compared to the amount of paddy produced in the villages of Kompot province. In Kompot, 24.5 % of total paddy per village per year is sold. At the same time, 50.5 % of total paddy per village per year is sold in Takeo province. Graph 11: Average paddy produced and sold per village per year


Graph 12: Income from selling paddy per family per year (riel/family/year)

Based on the graph above, farmers in studied villages in Takeo province can generally achieve very high incomes from selling paddy compared to the income of farmers in Kompot province earn from selling paddy. However, the farmers in Takeo mostly cultivate dry season paddy production, so that the production cost is definitely higher if compared to the production cost of paddy production in Kompot. Graph 13: Income from selling paddy per village per year (riel/village/year)

Based on the graph above, the income from selling paddy per village per year in Takeo is about 15 times higher than Kompot. However, the expense on external agricultural inputs such as chemical fertilizers, chemical pesticide, and petroleum has not been included in the calculation.


Table 18: Amount of paddy produced in the studied villages



Angkor Borey

Borey Chuolsa

Koh Andert

Average number of families per village

391 182 261 254 221 167

Percentage of families who produce paddy for selling (%)

25.5 48 41 46 48 45

Total paddy harvested per family per year (kg/family/year)

Average 2,622 2,077 1,484 7229 9395 4924

Maximum 5,052 4,796 2,144 15278 12828 1018

Minimum 1,444 1,608 1,100 4232 6520 2622

Average amount of paddy sold per family per year (kg/family/year)

Average 1889 932 729 5336 6513 3332

Maximum 4150 2247 1200 7857 9630 7689

Minimum 569 263 237 3227 4312 941

Percentage of paddy produced for selling per family per year (%)

Average 53.91 57 40.32 72.45 70.41 61.74

Maximum 75.53 88.54 68.59 99 89 85.97

Minimum 31.12 22.22 15.47 57.04 41.23 35.89

Amount of paddy produced for selling per village per year (ton/village/year)

Average 261.63 90 90.93 950 1093 636

Maximum 781 280 240 2145 2451 2022

Minimum 44.6 17 51 355 831 158

Total amount of paddy produced in the village per year (ton/village/year)

Average 972.52 484.73 355 2129 2229 943

Maximum 1429.68 825 509 5760 4131 2678

Minimum 650 239 227 745 1128 339

Income from selling paddy per family per year (riel/family/year)

Average 1,611,000 846,300 627,500 17,291,400 5,287,900 2,760,800

Maximum 3,323,000 1,798,000 1,020,000 70,708,800 8,667,700 6,881,800

Minimum 484,200 21,400 237,500 2,134,600 4,083,300 799,900

Income from selling paddy per village per year (riel/village/year)

Average 239,547,000 81,833,000 79,276,000 4,375,020,000 1,091,112,500 537,343,900

Maximum 820,050,000 252,000,000 204,000,000 19,393,500,000 2,083,350,000 1,809,913,700

Minimum 35,680,000 13,676,000 45,280,000 32,8500,000 473,670,000 134,300,000

2.9 Demand Side

The main actors of paddy market chains are the paddy collectors, stock owner, rice millers, wholesalers, retailers, and customers. Each market chain actor interacts with each other to operate the paddy market chain system in the communities. Furthermore, each market chain actor has its own particular demand and the quantity of demand varies among different actors. A detailed description of each market chain actor follows below.


2.9.1 Demand for paddy by paddy collectors / middlemen

Based on the individual interviews with farmers, all farmers sell their paddies to paddy collectors. The paddy collectors do not only buy paddy from the farmers, but also from the village-based rice mills. However, 98% of all paddy was bought from the farmers and only 2 % was bought from the village-based rice mills. Based on individual interview with paddy collectors, one rice collector could buy paddy in the amount of 51 tons/year on average. The maximum is 114 tons/year and the minimum is 20 tons/year. The rice collector does not buy paddy from only one village in the communities, but they can afford to buy paddy from farmers in different villages. Concerning the paddy varieties, the traditional paddy varieties are more popular to cultivate than the external varieties like IR. At the same time, it is observed that the farmers in the studied villages of Takeo province mostly cultivate IR variety for their dry season paddy production.

Graph 14: Percentage of paddy varieties bought by the paddy collectors/middlemen in Kompot


Graph 15: Percentage of paddy varieties bought by the paddy collectors/middlemen in Takeo

Graph 16: Problems faced by the paddy collectors/middlemen


Based on the graph above, fluctuating selling prices of paddy, competition from other paddy collectors, and lack of capital are the main problems and constraints of the paddy collectors. However, in some cases, the paddy collectors do no need to have their own capital to buy paddy from farmers because they receive capital from stock owners. Paddy collectors then sell their bought paddy to different actors such as wholesalers, district-based rice mills, Vietnamese traders, etc. In the case of villages in Kompot province, 99% of the total paddy sold by the paddy collectors to the wholesalers and only 1% to the district-based rice mills. In case of Takeo province, 100 % of the paddy bought by the paddy collectors was sold to Vietnamese traders directly. It should be recalled that most of the studied villages of Takeo province are located close to the Vietnam border so the paddy collectors sell the paddy that they purchased to Vietnam. Volume of paddy distributed by paddy collectors In Kompot province, the majority of paddy bought by the paddy collectors was sold to Vietnamese traders and Khmer traders in the districts. Only 13.6% of total paddy bought by the paddy collectors was sold to district-based rice mills. Although 40.9% of total paddy bought by paddy collectors was sold to wholesalers in the districts, the wholesalers continue selling their bought paddy mainly to Vietnamese traders and other traders in the province. Graph 17: Volume of paddies sells from paddy collectors in Kompot (%)

In the studied villages in Takeo province, 73% of total paddy bought by the paddy collectors was sold to wholesalers in the districts. Therefore, the wholesalers in the districts play an important role in collecting paddy from paddy collectors to continue selling paddy to Vietnamese traders and others. Only 16% of total paddy bought by paddy collectors was sold to district-based rice mills and only 10 % to the villagers.


Graph 18: Volume of paddy sold by paddy collectors in Takeo (%)

2.9.2 Demand of paddy by wholesalers

Volume of paddy distributed by wholesalers In Kompot province, 65% of total of paddy volume is distributed to Vietnamese traders. The study found that only 1.5 % of paddy was distributed from wholesalers to Khmer traders in the local areas. However, 32.9 % of total paddy was distributed from wholesalers to district-based rice mills. Graph 19: Volume of paddy sold by wholesalers in Kompot (%)

In Takeo, 60% of total paddy was distributed from wholesalers to Vietnamese traders. Furthermore, 26% of total paddy was also distributed to Thailand. Only 7% was sold to Khmer traders in the local areas, 5.5 % to villagers and only 1.5 % to the district-based rice mills.


Graph 20: Volume of paddies sells from wholesalers in Takeo (%)

2.9.3 Demand for rice by retailers

It is to note that rice retailers sell rice, not paddy. Majority of the rice retailers buy rice from rice millers and there are only a few of them buy paddies from farmers. In Kompot, the rice retailers sold on average about 2 tons of rice per year. The maximum is about 10 tons/year and the minimum is about 0.3 ton/year. Particularly, a few retailers could sell as much as 30 tons/year. Based on the graph below, Srov Sar, Rang Chey and Krahom Laksenlik are the most popular rices. Graph 21: Volume of rice purchased by retailers in Kompot for selling (%)

In Takeo province, Pka Khnhey is the most popular rice being sold by retailers. The retailers could sell rice in the amount of 3.5 ton/year. The minimum is about 0.3 ton/year and the maximum is around 10 tons/year.


Graph 22: Volume of rice purchased by retailers in Takeo for selling (%)

2.9.4 Demand for rice by customers

Generally, customers such as villagers, district dwellers, restaurant owners, etc. also need rice for their consumption. All of them buy rice from different rice sellers such as rice retailers and rice mills. Graph 23: Percentage of rice purchased by different customers in Kompot

The majority of customers in Takeo province buy rice from rice retailers at the markets. Restaurants, though, and cooked rice sellers prefer to buy rice directly from the rice mills because they can get a lower price compared to the price of rice from rice retailers at markets.


Graph 24: Percentage of rice volume buy by different customers in Takeo

2.10 Price trends Generally, the selling price of paddy gradually increases from September to November as it is harvesting season of the paddy production. During the harvesting, there is high demand from Vietnamese traders so that the paddy collectors actively collect the paddy during this period, which is why the price of paddy is increased during that time. Due to the amount of paddies demanded by Vietnamese traders is higher than the local demand so the fluctuation of paddy price is highly depended on Vietnamese traders. However, the price decreases at the end of harvesting period, in December. The price of paddy increases or decreases depending on the market demand, especially the demand for paddy from Vietnamese traders. Graph 25: Price trend of traditional paddy varieties

IR variety is one of the most popular paddy varieties for dry season paddy production. Based on the graph below, the average price of IR variety is about 800 riels per kilogram. IR is


mostly adopted for dry season paddy production. Furthermore, the higher price of IR variety is from September to November. Generally, the price of paddy in Takeo is normally higher than Kompot. Graph 26: Price trend of IR variety

2.11 Advantages and effects of community-based rice mills In the target districts of this research, it is to note that the community-based rice mills/agricultural cooperatives formed under CEDAC's support existed only in Kompot province. In all there are four community-based rice mills in four districts, namely Dong Tong, Chhouk, Chumkiri and Kompong Trach districts. Those community-based rice mills are now working on collective buying and selling of paddy in their respective communities. Some of the community-based rice mills conduct rice milling to sell rice in the communities. On average, there are 100 members in each community-based rice mill. The members of the community-based rice mills consist of farmers from different villages in the commune or district. Farmers who are members of community-based rice mills deposit their capital together (shareholder subscribe) in order to develop a capital account for their collective business. To date, each community-based rice mill has an average capital account of about 24,425,000 riels (approximately 6,100 USD). Table 19: List of community-based rice mills

N Name of community based rice mill

Commune District Date established

Number of total members

Number from village under the affiliation

Total capital (riels)

1 Dong Tung Rice Agricultural Development Cooperative

Damnak Sokrom

Dong Tong

08/06/2009 69 18 35,000,000

2 Chhouk Sakri Reing Agricultural Development Cooperative

Sat Pong Chhouk N/A 77 3 26,000,000


3 Srecheng Sakry Reang Sen Monorom Agricultural Development Coopertive

Sre Cheng Chumkiri 02/06/2006 202 5 35,000,000

4 Kaksekor Phros Psay Bom Reu Sevakam Pakchek Tes Kaksekam Sruk Kampong Trach

Domnak Kantuot Khang Chheung

Kompong Trach

25/01/2008 114 17 1,700,000

a) Rationale for setting up community-based rice mills

- Farmers lack negotiating power with middlemen in terms of determining the selling price

of paddy. Normally, the price of paddy is cheaper when the farmers sell their paddy individually. The capacity of farmers is still low to produce paddy in terms of both quantity and quality. At the same time, there is a lack of coordination among farmers in order to sell their paddy collectively. Generally, farmers can get a higher price if they have a large amount of paddy for selling.

- The farmers lack knowledge and capacity in relation to agricultural innovations, especially techniques for improving paddy cultivation and other agricultural innovations. Furthermore, the farmers lack good communication and networking with other farmers in the communities for sharing and learning the agricultural innovations altogether.

- There is inadequate capacity of farmers for supplying paddy to markets. Most of the rice-based farming families are considered subsistence farmers who mainly produce for domestic consumption, but not for commercial purposes.

The management committees of community-based rice mills were established in order to conduct daily operations. The management committee members of community-based rice mills are comprised of a president, vice president, treasurer, secretary and the others are the members of the management board. The management committee members of the community-based rice mill are selected by the members through a general election.

b) Activities of the community-based rice mill are mainly focused on: Main activities of the community-based rice mills consist of the following: - Conducting business activities crucial to buying and selling paddy collectively. - Providing training in relation to agricultural training to farmers in their communities. - Providing saving and credit service to members and other farmers. - Promoting ecological agriculture through farmer-to-farmer extension approaches.

c) Advantages of setting up community-based rice mills are as follows: - Farmers can gain more negotiating power with middlemen and other traders in selling

paddy. - Improved knowledge and understanding about intensive paddy cultivation because the

members of community-based rice mills have formed into groups and received regular training from supporting NGOs.

- As the techniques and skills have improved, paddy productivity has increased and the volume of paddy produced has also been gradually increased, which means more paddy for family consumption and market supplies.


- The farmers have learned more about market information related to the selling price of paddy.

- The farmers know how to sell their paddy with a better price through collective selling. Based on the farmers' experience, they could get higher price about 20 to 50 riels per kilogram of paddy.

- Solidarity and cooperation among the farmers have improved when they participate as members of community based rice mill. Particularly, the farmers who are members of community-based rice mills deposited their money for collective business and saving.

However, the majority of the farmer families in the village do not yet understand the advantages of setting up a community-based rice mill so that they don't intend to participate as members of the community-based rice mill.

d) Swot analysis of the community-based rice mill Strength Weakness The management committee members of community based rice mill have good commitment

Majority of the members as well as the villagers have not yet understood the advantages of a community-based rice mill.

The community-based rice mill can raise capital from their members. The mill can use that capital for business investment and providing credit to members.

Lack of adequate capital for business investment.

The community-based rice mills now can communicate directly with the middlemen for selling their paddy.

Lack of marketing information in order to determine the selling price of paddy with the middlemen.

The community-based rice mill has its own warehouse so that they can buy and stock the paddy for a period of time before selling it to the middlemen.

Lack of coordination among the members and villagers in order to sell the paddy collectively. Some members sell their paddy to middlemen while the community-based rice mill has not sufficient money to pay for them.

The members of community-based rice mill are the members of paddy farmer producer groups.

Still low in terms of doing the collective action for the collective benefits.

Ability to be flexible to read the situation/condition of market.

Opportunity Threat The government department specifically the Provincial Department of Agriculture (PDA) recognize their community-based rice mill.

There is a strong competition with the middlemen. The middlemen can buy paddy from farmers at a higher price or even lower quality of paddy, such as they can buy wet paddy while the community-based rice mill buys dry paddy (approximately 14 % moisture).

CEDAC provides technical support as well as financial support to the community-based rice mill.

There is a good market demand for paddy product so that the community-based rice mill can try to produce more paddy for market supplies.


MFIs provide soft loan to the community-based rice mill.

2.12 SWOT analysis During the group discussion with key informants and individual interview with the respondents in each studied village, the research team conducted a SWOT analysis of each actor as follows:

2.12.1. SWOT analysis of farmer producers

Strength Weakness • 8% of farmers interviewed by the

research team mentioned that they are able to negotiate to use own scale for weighing their paddy.

• 29.4% of farmers mentioned that they have appropriate paddy field for paddy production,

• 17.5% of farmers said that they have improved their knowledge and skills of agricultural techniques such as system of rice intensification, compost making technique, seed selection, soil nutrient improvement, etc.

• 1.6% of rice farmers interviewed by the research team produce organic paddy.

• 30.1% of farmers mentioned that they have paddy farmer producer groups in their villages and that is a good factor to improve production and to negotiate the price.

• 10.3% of farmers stock paddy for a period of time in order to sell it at a higher price.

• 3.17% of farmers mentioned that they don't have enough agricultural materials and equipment.

• 15.2% of farmers interviewed by the research team mentioned that they lack money to repay money lenders, MFIs, after harvesting.

• 39.1% merchants determine the price, they change the price.

• 8% merchants don't use appropriate scales as well as don't do fair trade.

• 21.7% of farmers sell paddy individually so that they are not able to negotiate the price with paddy collectors as well as they lack market information.

• 13% of farmers pointed out that they are unskilled in terms of improving soil fertility.

• 1.5% of have decreased paddy productivity.

• 1.5% of farmers always buy seed from others.

Opportunity Threat • 72.6% of farmers stated that it is easy to

sell paddy because there is high market demand.

• 15.5% of farmers can access irrigation schemes.

• 2.4% of farmers said their paddy field's fertility is still good.

• 9.5% of farmers pointed out that there are some government institutions and NGOs promoting agriculture within their communities.

• 29% farmers interviewed increased their expense on chemical fertilizer, pesticide, and gasoline.

• 50% of farmers mentioned they face natural disaster, drought, flood, pest insects.

• 14% of farmers said that price of paddy often fluctuates.


2.12.2. SWOT analysis of paddy collectors

Strength Weakness

• 19.5% of total paddy collectors mentioned that they have adequate capital to buy paddy.

• 30.5% of total paddy collectors have good market linkages with other market actors so that they are able to sell their paddies.

• 8.3% of total paddy collectors said they have sufficient means of transportation.

• 8.3% of paddy collectors have good relations with villagers so it is easy to collect paddy from farmers.

• 11.1% of total paddy collectors are flexible in terms of determining the purchase price of paddy based on the fluctuation of market price.

• 5.5% of paddy farmer producer bring and sell their paddies directly at the paddy collector’s house.

• 2.8% examine the paddy rice before purchasing it.

• 2.8% of paddy collectors mentioned that they are able to pay money immediately to farmers when they buy paddy from farmers.

• 2.8% of paddy collectors stated they come to buy paddy at farmers’ houses so it is able them to collect more paddies,

• 8.3% of paddy collectors mentioned that they have more ideas for operating their business successfully

• 21% of total paddy collectors who were interviewed mentioned that they lack capital to buy paddy.

• 33.33% stated that they lack transportation for carrying paddy from farmers' houses.

• 16.6% mentioned difficulty in being flexible in terms of the fluctuation of paddy price.

• 12.5% of paddy collectors mentioned that they need to buy paddy from farmers’ houses so they spend a lot of time on collecting.

• 4% of paddy collectors mentioned they get very low profit from their business.

Opportunity Threat • 18.2% of total interviewed paddy

collectors mentioned that majority of farmer sell their paddies immediately after harvesting because they need money for family's purposes,

• 72.8% of paddy collectors mentioned that they have good market networks of farmer producers, wholesalers, and other traders.

• 18.2% of paddy collectors have known many families in the villages who raise ducks so those families need to buy paddy from them.

• 6.2% have many competition from merchants and they change price immediately.

• 15.4% of paddy collectors mentioned about the road is difficult so that they are difficult to travel for buying paddies,

• 15.4% of paddy collectors said that they have problems with fluctuating paddy prices because the price strongly depends on Vietnamese traders.

• 7.7% of paddy collectors mentioned low quality of paddies, which makes it difficult for them to sell.


• 9% of paddy collectors are able to access more capital for buying paddy in case that is needed.

2.12.3. SWOT analysis of rice millers

Strength Weakness • 13% of rice millers mentioned that they

are honest with suppliers and customers, which increases confidence in them as market actors.

• 32% of rice millers mentioned that they have good relationships with producers and traders.

• 13% of rice millers interviewed mentioned that are friendly communicators.

• 13% attest to good health and have enough labour.

• 13% of rice millers said that they have enough material, equipment, and means of transportation

• 16% of rice millers mentioned that they make every effort to buy paddy of high quality.

• 70% of rice millers interviewed lack of capital for their investment.

• 16.7% of rice millers lack access to market information.

Opportunity Threat • 31% of rice millers mentioned that they

have a good network of customers. • 31% of rice millers mentioned that there

is good market demand from customers. • 11.5% of rice millers mentioned that

they are located in convenient locations that enable farmer producers access them easily.

• 3.8% of rice millers interviewed mentioned that if farmers are able to produce more paddies they are able to buy from them as much as possible.

• 28.5% of rice millers mentioned that roads to communities are difficult for transportation and cost in time and labour.

• 57.5% of rice millers said that they encounter stiff competition from other rice millers and traders.

• 7% of rice millers mentioned difficulty in being flexible in dealing with fluctuating prices.

2.12.4. SWOT analysis of wholesalers

Strength Weakness

• 11% of wholesalers mentioned that they use appropriate scales for weighting paddy.

• 25% of wholesalers said that they have good communication and network with paddy collectors and their customers,

• 8% of wholesalers mentioned that they get low profit from their business.

• 19.4% of rice millers mentioned that

• 23.5% of wholesalers mentioned that they don't have enough materials or means of transportation.

• 35.3% lack of labour and capital. • 29.4% lack of communication skills. • 11.8% cannot study well the paddy

market.


they have enough capital to buy paddy. • 16.7% of wholesalers answered that they

have enough material and means of transportation.

• 11% of wholesalers mentioned that they provide some money to paddy collectors in advance for buying paddy from farmers.

• 19.4% of wholesalers mentioned that they provide good service to their customers.

Opportunity Threat • 11.5% of wholesalers mentioned that

the majority of villagers are indebted so the farmers need to sell their paddy to repay loans.

• 15.4% of wholesalers mentioned that the farmers now able to producer more paddies so they can buy more from farmers,

• 11.5% of wholesalers have enough capital and material.

• 16.7% of wholesalers mentioned that it is easy to buy paddy because they don’t need to pay tax.

• 36.8% of wholesalers mentioned the competitiveness of other market actors.

• 10.5% of wholesalers mentioned difficult roads.

• 31.6% of wholesalers mentioned that they need to pay some money to police while transporting their paddy.

• 10.5% of wholesalers mentioned that the price of paddies fluctuates.

• 10.5% of wholesalers mentioned that farmers want to sell their wet paddy with a higher price event it is not so good quality

2.12.5. SWOT analysis of retailers

Strength Weakness

• 45.2% of retailers said they are honest, selling rice with a proper scale.

• 14.3% of retailers stated that they sell at the appropriate price.

• 7.1% of retailers said that they have enough capital for investment.

• 4.8% of retailers mentioned that they are able to determine the selling price by themselves in order to generate profit.

• 9.5% of retailers stated that they can sell rice every month throughout the year.

• 9.5% of retailers pointed out that they have their own paddy fields and can mill their paddy rice to sell.

• 75.9% of retailers said that they lack of capital, labour, transportation and other material for operating their business,

• 6.9% of retailers show that they are not good at keeping in touch with the market information

Opportunity Threat • 44.1% of retailers mentioned that they

have a lot of customers to buy their product, especially villagers.

• 10.3% of retailers mentioned some clients buy rice without paying money in advance.


• 11.8% of retailers said that they are able to buy rice for selling because there are many rice suppliers in districts.

• 8.8% of retailers claimed that it is easy to sell rice.

• 67.7% of retailers said there are many competitors.

• 16% of retailers mentioned difficult roads.

• 9.8% of retailers mentioned that the price of rice frequently fluctuates.

III. CONCLUSION Based on the results of the paddy value chain research, the conclusions are as follows: - The research reveals essential information about farmers' paddy production as well as the

capacity of farmers in producing paddy to supply for the markets. Based on the results of the study, the majority of farmers in the studied villages are able to produce some surplus for selling. However, some poor farmer families lack a sufficient amount of rice for family consumption after they sell out their paddy. To fulfil the family's demand, they need to buy in additional rice. However, the majority of farmers buy paddy from other farmers in the villages.

- Generally, the production cost of dry season paddy is higher than the wet season paddy production. In the case of dry season paddy production, farmers use a lot of chemical fertilizer and pesticide, which is why their production cost is increased. The majority of dry season paddy is produced for selling purposes.

- The majority of farmers in the studied villages in Takeo province cultivate dry season paddy production for selling purposes. In contrast, the farmers in Kompot province rely heavily on wet season paddy production. The rice yield of dry season paddy production in Takeo is definitely higher than the wet season paddy production, but they use high external agricultural inputs such as chemical fertilizers and pesticides.

- Farmers play an important role in producing paddy for market supply, but they receive less benefit from their efforts. Particularly, paddy collectors are playing a critical role in collecting paddy from farmers and selling it to wholesalers and other traders from Vietnam. The paddy collectors can receive good benefit from their roles.

- The community-based rice mill is useful and important for farmers to conduct

community-led businesses because it serves to mobilize more farmers, more quantity of paddy for market supply and enables them to negotiate a more competitive price with middlemen.

Rice value chain report in Kampot and Takeo provinces

Small Business & Entrepreneurship

Transcript of Rice value chain report in Kampot and Takeo provinces