Business Model Development
Vegetable market linkage and collection center development
Cambodian only produce one-third of vegetable produce to its population, while at the same time Cambodia import a significant volume of vegetable and fruit from mainly Vietnam and Thailand which the import vegetable estimate at 60% to 70%, annually according to (MAFF, 2014) and (USAID/HARVEST, 2015). In the country, farmers especially Kandal province grow vegetables for domestic supply, but price fluctuation discourages them when they need to sell their product at a very low price.
The farmers gained more power to negotiate with buyers when they formed into GAP vegetable producer groups. The farmers have larger amount of products, better access to market information, and they have more opportunities to receive capacity building. Furthermore, GAP vegetable attracts the consumers because they are safe for the consumption. High value crops selected for planting such as leafy vegetables, Khmer lettuce, Europe lettuce, French bean, bitter gourd, cucumber, tomatoes, and wax gourd. ACTIS selected potential areas, targeted villages, potential farmers, formed GAP vegetable producer groups, trained on good agriculture practice (GAP), internal control system, quality standard, linked with input suppliers, prepared production plan, etc.
The producer groups are formed at village level, at least 3 members per group. The group members must have good understanding of GAP standard, apply agro chemicals appropriately which followed to the GAP standard, however ACTIS encourages the farmers to reduce / stop using chemical fertiliser and pesticide step by step. The GAP farmers should also dare to do more investment in order to improve the vegetable production - it is good if they can supply the product for year round. The GAP farmers should also have capacity to prepare production plan that respond to market demand, follow internal control system and have good cooperation with other members in the group. Normally, the group management committee made up of one chief, one deputy chief responsible for technical assistance and another committee member to act as the internal inspector who is responsible for internal control system.
Improving access to good quality inputs with affordable price helps the producers to increase yield and quality of product. To solve the issue of the price fluctuation, supplying contract between producer groups and buyers are prepared to guarantee a stable price and regular supply. Both producers and buyers discussed and agreed on the buying price every week, the price can be flexible based on the market situation. GAP vegetable collection center established at the inter-village or commune level where farmers bring their GAP vegetables to clean, sort, pack, and it is also the place where the buyer come to buy the vegetables from the producer groups.
This business model provides benefit to both producers and buyers, they can have regular amount of supply and stable price. This model also link up among different market partners for the mutual benefit. A good point of this model is the establishment of the collection centers where the producers and buyers meet to collect and sell their products. More importantly, GAP vegetables are favorable for the consumers because they are safe/healthy and environmental friendly.