Rice is Cambodia’s principal food and most important export commodity. Some 60 percent of Cambodia farmers grow rice, but the sector suffers from low productivity, inadequate infrastructure, and vulnerability to flooding and drought. Farmers also struggle to find buyers and are often forced to sell at low prices, with export levels well below the country’s potential. Cambodia’s milling capacity is also limited, and so a significant portion of rice paddy is exported to Thailand and Vietnam for processing—leaving the country’s economy unable to reap the benefits of production.
With support from GAFSP, IFC and other lenders, AMRU Rice Ltd., a leading rice miller and exporter in Cambodia and long-term IFC advisory client, has constructed a state-of-the-art rice mill, which will help the company increase its milling capacity and expand its farmer reach. The IFC and GAFSP long-term investment — IFC’s first in the Cambodian agribusiness sector — is funding the company’s incremental long-term working capital needs, as well as refinancing some short-term debt. AMRU Rice will increase the number of contract farmers in its supply chain from 3,600 to some 15,000 smallholder farmers and provide targeted technical assistance with the aim of boosting farmer yields. As part of a combined effort with the investment team, IFC’s Advisory Services team, also with funding support from GAFSP, will be working closely with AMRU Rice to implement the Sustainable Rice Platform (SRP) standards, a set of standards to promote resource efficiency and sustainability in supply chains as well as in production, trade and consumption. Overall, the engagement is expected to strengthen farmer resilience to market volatility and improve livelihoods for the thousands of smallholders in AMRU’s supply chain.
IFC has been working with Cambodian rice producers since 2010, helping strengthen supply chains, improve agricultural quality and build a network of exporters and international buyers.
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