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| Better access to finance and knowledge is turning smallholder farmers into small businesses |
Kampong Cham, Cambodia - Most of Ngin Phon’s friends had already left the village by the time he decided to go. A job at a rubber plantation might allow him to earn enough money to one day run a profitable farm. But he’d have to leave home to get it.
Three years later, he and his wife Kim Sithol returned with $3,000 to expand their modest plot of land at Svay Pok village, in the province of Kampong Cham. By diversifying their crops, they could leave behind subsistence farming, which yielded enough to survive but left them still vulnerable to economic shocks such as poor harvests and low crop prices.
“It was either get a job at a plantation somewhere or go to Phnom Penh to work on a construction site,” says Phon.
It’s a choice facing many rural Cambodians as they struggle with long hours working the land, often for little financial reward. Poverty has fallen sharply in Cambodia in recent years. But for many people in rural areas—where most of the population lives—life is still precarious, and even a mild economic reversal might send them back into extreme poverty.
Leaving the farm behind
Many poor farmers leave their villages for better-paying jobs at Phnom Penh, or closer to home at nearby towns or rubber and cashew nut plantations. A report released in 2012 by the country’s Ministry of Planning noted that rural villages surveyed for the report lost an average 4% of their populations the previous year due to migration, mostly to Phnom Penh.
With more than 80% of its population depending on agriculture for their livelihoods, Cambodia’s future poverty reduction efforts will hinge on making its farms productive. A crucial part of that, say officials, is keeping rural families together on the land.
Remittances sent home by migrant workers can benefit villages. But such mass movements of people, described as “astronomically high” in the government report—can place severe strains on cities as populations surge, while leaving only children and the elderly back at the villages. A more sustainable solution to rural poverty is to provide farmers with more opportunities to be productive and earn better incomes.
The needs are particularly acute around the Tonle Sap basin in central Cambodia. This huge natural floodplain contains the largest freshwater lake in Southeast Asia, as well as about a third of the country’s population.
For centuries, its rich agriculture and fishing grounds have provided food and livelihoods for generations of Cambodians. Still, poverty rates are high; more than half of all households in the basin do not grow enough rice to meet their needs.
A platform for higher incomes
For Phon, 40, and his wife Sithol, 42, the decision to move was relatively easy as the rubber plantation is in the same province. After three years, they had saved enough to pay for earthworks to turn a rice paddy into a corn field, and secure their plot with a fence.
This gave them a platform for higher incomes. But they needed advice on an array of issues, like what crops to plant, which fertilizer to use, and how to get a fair price for their produce. They also needed extra capital for seed and better irrigation equipment.
Phon has further expanded his farm, adding new crops and even a pond to raise fish, after receiving assistance through an ADB-supported project targeting poor rural households.
The Tonle Sap Poverty Reduction and Smallholder Development Project has so far empowered nearly 40,000 households around the basin by providing access to better technology, markets, credit, and perhaps most importantly, knowledge.
“We teach farmers new techniques such as crop rotation and paddy mushroom production,” explains Sok Noeun, the project’s advisor who works with the Provincial Department of Agriculture, Forestry and Fisheries. “By doing these things, they can earn income all year-round.”
“I often thought of leaving here, but I changed my mind after getting support from this project.”
Ngin Phon
One of the project’s objectives is to make it easier for farmers to work their land rather than migrate. Faced with some of the lowest paddy yield per hectare in Asia, farmers can buy high quality seed produced under the project to boost yields. Livelihood improvement groups of poor households receive micro-credit they can invest to diversify into lucrative businesses such as livestock.
As he plucks ears of corn from head-high stalks, Phon explains how he used small loans to purchase better equipment, good quality seeds, a chicken pen, and to build the fish pond at the back of his plot. His monthly income has doubled to around 800,000 riel, around $200.
“Now I produce five times the amount of food, including rice, vegetables, chicken and fish. I often thought of leaving here, but I changed my mind after getting support from this project,” he says.
Turning smallholders into small businesses
The project is helping to turn smallholders into small businesses. Households participating in the livelihood improvement groups submit a simple business plan to their group if they want a loan from a revolving fund.
“If we don’t understand something we ask the leader of the group,” says Ya Suth, 39, a mother of four who took the equivalent of a $250 loan a year ago to open a so-called “dry rice” paddy at her village in the Stung Sen district of Kampong Thom.
By opting for crops fed by rain instead of paddy water, farmers like Suth can cultivate short season rice varieties which may allow the planting of other cash crops after the rice harvest. This enables a higher cropping intensity compared with areas where only one long season rice crop is cultivated.
Now Suth makes 7 million riel every 3-month season. “Before I had planned to leave because I had no money to raise my children,” she recalls, sitting outside her traditional two-floor house. “Without the additional income I wouldn’t be able to keep them in school.”
Her neighbor, Ton Kimhuoy, used to eke a living by catching fish. For her family, getting enough to eat was a daily battle. Many rural families around the Tonle Sap experience seasonal shortages of rainfall.
“My plan is to apply for another loan so I can raise more chickens and make my family’s income even bigger.”
Ton Kimhuoy
This means farmers like those in Kimhuoy’s village often cannot rely on a predictable supply of clean water for domestic use. Irrigation is not well developed, and many farmers don’t know how to efficiently use the water they have.
In the Tonle Sap area, large amounts of water are lost through rapid surface runoff into the lake. These factors mean there sometimes isn’t enough drinking water during dry season. Water scarcity can also contribute to bad harvests and food shortages.
A new start
Kimhouy thought that her family wouldn’t go hungry if she could raise chickens and grow her own rice. She applied for a $200 loan from the revolving fund to buy vaccinated chicks from a chick hatchery unit supported by the project, and to buy a rice paddy. The paddy provides food for her chickens and her family, and the extra $70 a month she earns means she can buy extra food when needed.
“We’re eating much better now,” says Kimhouy. “My plan is to apply for another loan so I can raise more chickens and make my family’s income even bigger.”
Phon won’t be moving again. In fact, his larger income might bring his family together for the first time in years. He wants to bring his son back from Phnom Penh, once he has finished studying to be a mechanic.
“I’m thinking of opening a workshop for him on my farm, so he can work here with us.”
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