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’ cooperatives. 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 cooperatives. 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 cooperatives.

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