Outline of the Project

Project Name

Project for Establishing Business Oriented Agricultural Cooperative Models

Country

Cambodia

Project Site

• Phnom Penh (DACP of MAFF)
• Takeo, Kampong Cham, Svay Rieng and Kampong Speu

Date of R/D signed

Dec.23,2013

Term of Cooperation

May 20, 2014 to May 19, 2019

Implementing Organization

General Directorate of Agriculture, Ministry of Agriculture, Forestry and Fisheries

Project Background

Between 1950's and 1966, cooperatives were well established in Cambodia, which there were 512 cooperatives under the control and administration of the Royal Office of Cambodian Cooperatives and under the supervision of Ministry of Agriculture. 13 provincial credit cooperatives lent loans to cooperative members. Among the 512 cooperatives, there were 390 multi-purpose agricultural cooperatives, 55 consumer cooperatives, 14 specialized production cooperatives for instance, specialty in rice, cotton, tobacco and 40 school cooperatives. In 1965, agricultural cooperatives owned estimated trading turnover at US$ 13 million.

Since 1970, agricultural cooperatives were dismantled due to the confusion of POI Pot Era. After the collapse of the Khmer Rouge regime in 1979, the government of People Republic of Kampuchea formed rural people as "Solidarity Groups" for the distribution of the land and collective production purposes due to limited resources such as agricultural tools, animals and labor force left from the Khmer Rouge regime. However, the Solidarity groups were disappeared when the government introduced the program on land ownership distribution in 1985.

In 2001, the Royal government of Cambodia formulated the Royal Decree on the establishment and functioning of agricultural cooperatives, union of the agricultural cooperatives and the pre-agricultural cooperatives. It went into effect in July 16, 2001. MAFF is being given mandate from the Royal government of Cambodia to promote agricultural Cooperative in Cambodia in order to assist rural peoples especially farmers to improve agricultural production and to create job opportunities enabling them to improve socio-economic status and self-reliance. The Law on Agricultural Cooperative came into force in June 9th, 2013.

Although the number of agricultural cooperatives has been increasing setting up 437 agricultural cooperatives (40,733members) in 23 provinces of the whole country in August, 2013, most agricultural cooperatives are vulnerable from a viewpoint of organizational management, therefor some agricultural cooperatives are facing a capital shortage. In addition, the sustainable and progressive promotion of agricultural cooperatives to conduct economic activities appropriately is not carried out due to lack of understanding of farmers and government officials about agricultural cooperatives as the juridical persons to be obligated to conduct activities based on the above Royal Decree.

In addition, although the market economy is spreading among rural areas in the Kingdom of Cambodia, it is difficult for farmers to enjoy benefits of the market economy through individual agricultural activities such as crops production, processing, and marketing.

On the other hand, the economic business activities such as collective shipping of agricultural products and the production of processed products for improving members' income are not being carried out very much by agricultural cooperatives established by the support of the government agency and non-governmental organizations. However, because of lacking knowhow, information and technologies to plan the above-mentioned business activities and to implement these activities properly, there is an urgent need to enhance abilities for business administration of agricultural cooperatives.

Under this situation, JICA dispatched a short-term expert in the field of agricultural cooperatives to the Kingdom of Cambodia on March, 2012 for the purpose of studying the current conditions of agricultural cooperatives, as well as providing suggestions for further development of agricultural cooperatives.

Base on the background mentioned above, the Royal Government of Cambodia submitted the official request of technical cooperation project entitled the Project for Establishing Business-Oriented Agricultural Cooperative Model to Japan having the accumulated knowledge and experiences about agricultural cooperatives in order to establish business oriented agricultural cooperative models to enable them to operate enterprises and service their members in sustainable manner.

The Project is aligned with the Japan's cooperation policy. One of the priority areas under this policy is "Agriculture and Rural Development" which aims to improve agricultural productivity and quality of rural population so that their livelihood is improved.

Overall Goal

Agricultural cooperative models that comply with the Law on Agricultural Cooperatives and International Co-operative Alliance principals and intend two or more businesses prescribed in the Law on Agricultural Cooperatives are disseminated to agricultural cooperatives in the target areas and non-target areas in the Kingdom of Cambodia.

Project Purpose

Business-oriented agricultural cooperative models are established in the target areas.

Outputs

1. The support systems of both DACP and 4 PDAFFs (Provincial Department of Agriculture, Forestry and Fisheries) for providing technical assistance for agricultural cooperatives are improved.
2. The organization, management and business operation of participating agricultural cooperatives are strengthened in the target areas.
3. Pilot businesses are introduced and operated in pilot agricultural cooperatives
4. Agricultural cooperatives business networking among agricultural cooperatives and with the private sector is introduced/ strengthened in the target areas.

Activities

1.1	Develop the manuals and/or guidebooks on agricultural cooperative businesses, management, business planning, auditing (monitoring) and facilitation, and basic report formats to be submitted from AC to MAFF.
1.2	Conduct baseline survey.
1.3	Develop AC statistics.
1.4	Conduct training for counterpart staffs of DACP and PDAFF on the developed formats, manuals and guidebooks.
2.1	Identify training needs of officials of AC.
2.2	Develop training materials for members and officials of AC.
2.3	Conduct training to officials of AC.
2.4	Implement monitoring and evaluation in order to find out the application of knowledge and experience obtained from the trainings.
2.5	Select Pilot AC.
3.1	Identify business potential of Pilot AC.
3.2	Select pilot businesses of Pilot AC.
3.3	Support and evaluate pilot businesses which will be implemented by Pilot AC.
3.4	Collect good practices and lessons learned from the project of pilot businesses and develop a guidebook.
4.1	Convene AC business workshops/forums in each province among AC and with the private sector (input suppliers, traders, service providers, etc.).
4.2	Compile and disseminate business information on AC.
4.3	Organize an agricultural cooperative congress in Phnom Penh or a target province.

Inputs

Japanese side

1. Dispatch of Experts.
   • Chief Advisor/Agricultural Cooperative Management.
   • Project Coordinator/Training Planning.
   • Other short-term experts such as Baseline Survey, Accounting, Farming Guidance, and so on.
2. Training in Japan, Cambodia and/or Third Countries.
3. Machinery and Equipment.

Cambodian side

1. Services of MAFF's counterpart personnel and administrative personnel
2. Suitable office space with necessary equipment;
3. Supply or replacement of machinery, equipment, instrument, vehicles, tools, spare parts and any other materials necessary for the implementation of the Project other than the equipment provided by JICA;
4. Information as well as support in obtaining medical service;
5. Credentials or identification cards;
6. Available data (including maps and photographs) and information related to the Project; and
7. Running expenses (running water, electricity, etc.) necessary for the implementation of the Project.

Important assumption

• The socio-economic environment does not change to a large extent.
• Agricultural production is not significantly affected by natural disasters.
• The sufficient number of DACP and PDAFF staff is allocated to support model AC.