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Amru Rice Support Farmers in the contract-farming model by training them to comply with quality, organic and sustainable standards, and pays farmers above market price and fully supports fair trade

On June 01, 2021, Chairman and CEO of Amru Rice Cambodia, Mr. Song Saran, has attended as one of the speaker in the panelist of “Delivering solution at scale: Inclusive business in South-East Asia, Innovation, and Policy Action” in the UN Responsible business and Human Rights Forum, Asia and Pacific via online. This webinar also attended by national and international key speakers, in which from Cambodia, in term of delivering on how government pay attention to inclusive business (IB) and the key elements strategy to promote IB in Cambodia, H.E Heng Sokkung, Secretary of State, Ministry of Industry, Science, Technology & Innovations, attended as one of the key speakers.

By introducing the inclusive business model that Amru Rice has been implementing so far, especially on the contract farming model, Mr. Song Saran brought up that for Amru, our partnership model with small farmers who supply the raw resources for our products is through the contract farming. Our company engage smallholder farmers and their cooperatives through an Agreement—where they supply us quality-compliant rice; adapt environment-friendly and sustainable production standards such as organic standards or the Sustainable Rice Platform standards; and, farmers are trained on these standards so that they adopt its practices and participate in inspection and monitoring for their compliance through an Internal Control System.

He said that “Amru acts as the assured buyer and their link to the bigger market. We commit to a fair price above the prevailing market price. We provide them incentives through a premium for their compliance to the standards –also their share of profit from the export of their product. We also link them to NGOs and service providers that provide the training to scale-up their farming knowledge and institutional capacities or could provide inputs such as certified seeds, organic farm inputs and other technical assistance. The contract farming model is duly vouched by local government and the Ministry of Agriculture representatives. On the trading aspect, Agricultural Cooperatives (AC) are integrated in a public-private-producer platform which enable smallholder farmers to access post-harvest services, such as drying, product storage and bulk trading; enabling them to optimize higher prices after the peak buying season when prices fluctuate to its lowest. Hence, the ACs learn agripreneurship.”

Responding to the question of what type of innovations have Amru Rice introduced to be able to be profitable while working with low-income markets, Mr. Song Saran answered that “Our primary innovation is the shift to the organic rice market. This is a niche which Cambodian rice farmers are competitive—given the non-use and lesser use of chemical fertilizers and pesticides in near upland Cambodian rice fields. Our shift to the organic food market made us a specialized product, with higher global prices but with a stricter food quality standard.”

Amru Rice introduced and broadened the practice of environment-friendly and sustainable production—the use of certified organic seeds, compost and other organic farm inputs, sustainable water management, climate-resilient practices. For example, we innovated the use of rice-husk waste as organic fertilizer marketed to and used by our supplier farmers and we collaborated with IRRI on the production of certified rice seeds to supply to farmers.

He continued that there is also the need to add-value to the farmer’s products through more efficient processing of raw paddy into packaged rice. Hence, our company invested to improve our processing facilities—such as mechanized dryer, automated milling and packaging process, better product inspections—such as x-ray machines for baby-food products and greater storage capacity through a modern top-of-the-line silo we got through USAID assistance. We also piloted the use of Solar Energy to reduce our dependence on the electric grid. Along with better facilities, we have to improve on our Environmental Health and Safety (EHS) policies and practices. We did an EHS assessment of our operations and now have an Environmental Management Plan addressing EHS issues. In the face of Covid-19 challenges, we scaled-up the use of personal protective equipment and better hygiene practices in our workplaces.

Other innovations came as joint effort with other services providers. We are on a second phase of using BlockChain technology to trace the transactions and benefits of our farmer suppliers, partnership with Oxfam-Novib. We were the main proponent of the Sustainable Rice Platform—eventually put into practice by collaboration with the International Finance Corporation of the World Bank. We are bringing into partnership with Oxfam-Cambodia a green economy model in the Tonle Sap Lake area. We have also brought more indigenous people participation by expanding the sourcing of organic rice in upland Mondolkiri, in partnership with the Dutch Government. We have also expanded into organic cassava since 2019 and into organic cashew in partnership with Santana Company for processing cashew kernels.

In addition to presentations and discussions on the role of stakeholders, both public and private, for the private sector as a whole, Amru Rice is the largest and most recognized organic rice exporter in Cambodia, this also has high hopes and encouragement for all actors, all parties will continue to implement their commitments, especially in the circumstances of COVID19, which, in fact, the agricultural sector is not as severely affected as other sectors that can continue to build resilience and sustainability in this sector.

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