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Amru’s milestones in contract farming benefits 8000 famer’s households in 2020

Within the goal of improving farmers’ livelihoods and brings positive social change to the communities along the supply chain, Amru in 2020 has achieved the 82 contract farmings with agricultural cooperatives (AC) across the Cambodia, resulting in direct benefit to 8000 famer’s households.

Initiated in 2014, Amru pilot the first year project of contract farming in Preah Vihear province with only 8 ACs, equal to 200 households. The company has its niche market which is the organic food and sustainable rice, resulting in 2022, the contract farming business model working with 82ACs and equal to 8000 farmers’ households.

The signing ceremony on contract farming of Sustainable Rice Platform (SRP) production between AMRU Rice (Cambodia) company and 22 Agricultural Cooperatives (ACs) on 13 August 2020

According to Royal Government’s Sub-Decree No. 36 of the Ministry of Agriculture, Forestry and Fisheries in 2011, the definition of the contract farming is defined as an agreement on an agricultural production business made between two or more parties for legal operation, and conditions must be stated in advance.

The Research by Cambodia Development Resource Institute (CDRI) has given the definition of contract farming in Cambodia that, it’s increasingly seen as an effective mechanism to maximize the inclusion of and benefits for small-scale farmers. Thus, Contract farming is an appropriate mechanism to promote farming, supply, and varieties of seed that meet the needs of market conditions, especially paddy and organic crops, and as a mechanism to ensure and improve farmers’ capacity in farming.

Signing ceremony on the “Contract farming of Sustainable Rice Production (SRP) between AMRU Rice and 8 Agricultural Cooperatives in Battambang Province on 10 July 2020
Contract Farming Signing Ceremony on Agro-Processing and Organic Rice between companies and 59 Agricultural Cooperatives in Cambodia on 29 September 2020

Amru’s contract farming mostly focus on sustainable rice (SRP) and organic rice, as the big market of company’s export is to developed countries, in which the organic rice is in high demand in those market destinations, including the European Union, Australia, the United States, and Canada, where buyers care about the environmental impact of what they consume.

Within this business model, Amru has improved farmer livelihood in the context of farmers have received more incentive price from the organic rice than the normal rice, farmers’ capacity and productivity have been also improved (around 20% to 30% gains). So in total, farmers receive around 50% more than the normal conventional practices. Also, this help in reducing the cost and improving productivity under this organic rice project.

Amru Rice’s CEO and Chaiman, Song Saran
Amru Rice’s CEO has visited the organic rice harvesting of an AC contracted with Amru Rice in Preah Vihear

Mentioned in the ifoam organic international platform, Amru Rice’s business is also conducted with strong ethics by embracing its CSR concept and working closely with various Agriculture Cooperatives throughout the country in carefully crafted contract farming format to also improve livelihood of our farmers along the supply chain.

ACs benefits from contract farming with Amru in not only gain market sustainability and profitable, but also get training from company on various soft skills and practical skills related to organic standards, internal audit systems, techniques. Cultivate planning, trading, entrepreneurship, business concepts, financial records and management.

Amru Rice Staff conducted training on the standard of SRP rice to farmers
Farmers from ACs that contracted with Amru are invited to join the training on contract farming benefits and process

The paddy purchased from the ACs that Amru’s contracted with reached nearly 50000 tons, where the milled rice exports volume reached 53,000 tonnes to more than 40 countries including countries in European Union, Australia, USA, Canada, New Zealand, Hong Kong, etc. This export is increased by 10 percent comparing to 2019, despite Cambodia’s drought in July, floods in October and the issue of rising shipping costs and containers shortage at the end of the year. This is a sign of significant positives for Amru Rice exports in 2020.

AMRU Rice started its rice trading activities in 2011 and gradually integrated other steps in its rice value chain. Over time, the company established its own semi-processing facilities and then ventured into contract farming with farmer cooperatives in various provinces in Cambodia, resulting in 82 contracts signed with 8000 farmers’ housholds. Amru has exported over 450,000 Metric tons over the period of 10 years, equal 10% of overall export in Cambodia.

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