A five-year agriculture project implemented by USAID held its closing ceremony capping a $21.2 million project that created millions of dollars of profits for buyers and suppliers and created over 2,500 jobs in the industry.
Leaders from the project joined ministry officials, business owners, and farmers joined to celebrate the results of the initiative and look ahead to the sector’s bright future.
Nancy Eslick, the Mission Director for USAID Cambodia, said: “The agriculture sector is the backbone of Cambodia’s economy, accounting for more than 20 percent of GDP and was a source of economic resilience throughout the pandemic.
The Harvest II project identified pain points within the relationships between farmers and buyers and created partnerships between the two while addressing the needs of each party. The problems centered around buyers wanting higher quality and quantity of goods while the farmers needed better prices and more markets.
Harvest II Chief of Party Nimish Jhaveri said: “We started five years ago with a single idea to basically improve the lives of farmers and improve the horticulture experience all across the value chain. Our initial goal was to work with farmers but when we saw farmers interact with the market, we found farmers wanted more from buyers and buyers wanted more from farmers.”
Eslick said during the project, farmers increased their sales by $75 million, 2,501 jobs were created, $28 million was invested in the industry, and over 1,200 companies benefited from the initiative.
H.E. Dr. Hean Vanhan, secretary of state of the Ministry of Agriculture Forestry and Fisheries (MAFF) said the project successfully provided inclusive economic opportunities for buyers, producers, and suppliers. Moving forward, he said ensuring high productivity from farmers would be a priority to help them continue to compete with international suppliers.
The ambitious project trained farmers on Good Agricultural Practices (GAP), provided funds for new technology and upgrades, and increased productivity and profitability for both buyers and farmers. Seventeen government policies were created as a result of the program.
Eslick estimated that 210,000 households received benefits from the program and 17 policies were created in partnership with the government. She credited MAFF, the General Directorate of Agriculture (GDA), local farmers, development partners, and the entrepreneurs within the industry for making the project a success.
Focused on four provinces — Siem Reap, Battambang, Kampong Thom, and Pursat, – before branching out.
Pandemic a boon for the project
Abt Associates, a Washington DC-based research and program implementation firm that focuses on health, social, and environmental policy, implemented the project on behalf of USAID.
Sally Cameron, the principal associate of the firm’s International Economic Growth Division, said $3.3 million was provided in grants to help catalyze investment within the industry.
Cameron said when her team first arrived in Cambodia five years ago, wholesalers and retailers in the industry typically bought goods from Vietnam and were averse to buying from Cambodian farmers.
This led the team to install a buyer-led approach, helping buyers to lead a shift in the sector by creating valuable deals for them and building the capacity and productivity of local farmers.
By stimulating conversation between the two sides, business deals and partnerships were arranged and both sides benefited.
The pandemic turned out to be a boon for the project, as buyers lost access to international goods and had no choice but to turn to local suppliers.
“People were very change-averse but because of the pandemic, many had to change to survive. Fewer imports were coming. They could see the opportunity, they could see the need to change,” she said.
“It’s all coming to a nice satisfying finish, where things are pulling together, but we realize now that there are new challenges. The borders are going to be opening up and if Cambodia can’t produce efficiently if prices aren’t competitive, that’s going to be disappointing. COVID provided some opportunities to innovate and some breathing space to try new things. Significant gains have been made but unfortunately, there are still more challenges.”
She said climate change was the major looming issue, as there is no easy solution to increasing productivity amid severe weather changes.
New markets for Cambodian produce
Processing plants proved to be a new market identified by the project, Jhaveri said. More farmers were enabled to ship products directly to processing plants, increasing their profits and providing needed goods to buyers.
Traditional markets, or wet markets, were another targeted market. Four goods were prioritized: mangoes, longans, vegetables, and cashews. For the first time, a direct supply chain was established bringing goods from the manufacturer directly to the consumer, he said.
Partnerships were also created with retail markets, where product quality and traceability took on increased importance.
One of the grants provided by the program went to Parth Bokotorky, the CEO of agriculture supply chain company Azallya. He developed an AI-powered app that can assess the quality of produce simply by taking a picture.
It also used geotags to source the produce. His team would scan it at the collection centers where it was shipped from and retail markets could then verify this once the product arrived.
Bokotorky said the program provided valuable reliability and could help farmers who consistently produce high-quality goods gain access to financing.
About a dozen businesses that benefited from Harvest II set up shop to showcase their products, which ranged from cashews and chili sauces to dried mangoes and taro.
Scaling up businesses
Sothnita Soeun, Handcrafted Cashew Nuts Stung Treng’s business development manager, said the company was able to start building a new factory as a result of the project and provided training sessions for over 143 farmers. The company also set up contracts with 66 farmers.
“They sell their cashews to us, we provide fertilizer to build their capacity, to secure the quality of the goods and meet the standards of international markets,” she said.
She said the company is planning exports to South Korea, the US, Germany, and Singapore. The cinnamon-flavored cashews have proved immensely popular in Germany, she said, and company representatives soon visit the country to discuss exports.
The cashew company’s current output is capped at 15 tons per month but the goal is to hit 75 tonnes per month soon.
“We want to help the farmers by increasing our capacity. Exporting also helps the farmers. We grow together,” she said, referencing the company’s tagline.
Exports have historically been difficult in Cambodia due to the long list of requirements, certifications, and tests required, and Harvest II helped bridge this gap.
Jhaveri said 80 companies involved with Harvest II had begun the process of exporting. Forty of the companies have sent samples to partners abroad, and 20 are in active discussions to begin exporting.
Cameron said the next stage of the project called the Agriculture Partnership Hub, will focus on strengthening partnerships with traditional and modern markets as well as supporting the growing export market.