Wednesday, September 21, 2011

Law: Farming Cooperatives in Cambodia

New Law to Support The Creation of Farmers' Cooperatives

Agriculture Minister officials said that they would soon complete a
new law to regulate and support the creation of farmers'

They said the law would allow farmers to organize themselves in
legally recognized cooperatives, which could improve their market
position and allow access to financial and technical support.

Chea Saintdona, chief of the farmers' organization office at the
department of agricultural extension at the Ministry of Agriculture,
sad the draft law would be sent to the Council of Ministers after a
final discussion of its contents this week.

The law, he said, would provide big advantages to farmers that joined
a cooperative. "They could get technical and financial support from
the government partners," Mr. Saintdona said.

He added that farmers unified in a cooperative would be in a stronger
position to sell their produce.

He noted that after the law is adopted, the government would find
financial institution that could offer farmers credit through the
cooperative, allowing farmers to get loans without collateral, he
said, as the cooperative would guarantee the loans of its members.

Many farmers currently struggle to get credit and can only register
the land as collateral.

The 134-article draft law sets out a legal framework for farming
cooperatives, stipulating cooperative membership, organization
statutes and management, as well as capital and solvency issues.

A cooperative can be formed by at least 25 persons working in farming
and agricultural business, all of whom have to buy in to raise capital
for the organization, according to the draft.

It also details government policy in support of cooperatives,
specifying the creation of National Board for Agriculture
Cooperatives, as well as a training center and a development fund for

Agriculture Minister Chan Sarun said in speech last month that 243
farmers' group had been formed so far. Given Cambodian's traumatic
experiences with Khmer Rouge forced labor cooperatives, he stressed
that the new cooperatives would be "absolutely voluntary" and would
"protect farmers' interest."

Yang Saing Koma, director of the Cambodian Center of Study and
Development in Agriculture, said the law was a step forward for the
agriculture sector, as recognition of cooperatives as business
organizations could help those working in the sector.

"It's important for small farmers to get organized in order to get
access to the market and additional resources," he said, adding that
it would be vital for farmers to choose good leaders for their