Reducing Poverty by Empowering the Farmers

Despite enjoying economic growth over recent years, the livelihoods of many citizens in Cambodia remain vulnerable to external shocks. This is especially true among the rural poor, who make up about 80% of the country’s population. Poverty is most extreme around the Tonle Sap basin, where some areas had poverty rates reaching up to 60%.

The Tonle Sap Basin is in the northwest and central parts of Cambodia. Its large freshwater lake, which is the central part of a complex hydrological system, is connected to the Mekong River near Phnom Penh by the Tonle Sap River. The lake is subject to an annual flooding cycle during the rainy season. The millions of people who reside there benefit from this inundation of the land for crop production and fisheries. The Tonle Sap Lake is Southeast Asia’s largest freshwater lake and is home to diverse groups of fish, reptiles, birds, and mammals. Unfortunately, poor households still experience food shortages. Transmissible diseases are also prevalent because many households lack clean water. Rural households frequently resort to borrowing from moneylenders at usurious interest rates.

Giving Tonle Sap’s Poor a Boost in Livelihood

The Tonle Sap Poverty Reduction and Smallholder Development Project (TSSD), which began in 2010, aims to improve the livelihoods of about 630,000 households in 270 communes in 7 provinces in the Tonle Sap Basin: Battambang, Banteay Meanchey, Siem Reap, Kampong Thom, Kampong Cham, Tboung Khmum, and Prey Veng. The project seeks to achieve this through investments in productivity improvement, rural infrastructure, and capacity development. Until the end of 2014, the Government of Finland supported information and communication technology (ICT) activities to connect farmers and traders in the project area to markets and information. On the other hand, IFAD continued its support to the livelihood improvements, begun in 2010 up to the ongoing TSSD-Additional Financing (TSSD-AF). The project shows how people’s active participation, government support, and partners’ expertise and shared resources have transformed the quality of life in the project communes.

Improving Rural Infrastructure

The project is building infrastructure most urgently needed by the beneficiaries to help improve farmers’ connectivity and market access. It targets the enhancement of 867 kilometers (km) of rural roads and the rehabilitation of small-scale irrigation and drainage facilities covering about 11,000 hectares (ha) of farmland using designs that include disaster risk reduction features. It is also providing support for other market-based infrastructure, including the improvement of local markets.

Providing Better Financial Services

The project took a creative approach to provide smallholder farmers with easier access to financing. The project established livelihood improvement groups (LIGs) and set up a group revolving fund in each one, financed through block grants provided to each commune council. LIG members can borrow from this group revolving funds to finance their livelihood improvement activities. The funds have now expanded to include members’ savings.

The majority (around 80%) of the members in each LIG are made up of poor smallholders; up to 25% of these are households headed by women. On top of the access to the revolving fund, the project also provided LIG members with training to develop business plans for their livelihood activities and enable them to become more creditworthy.

Aside from LIGs, the project also focused on microfinance and other rural financial institutions. It provided capacity-building and training programs to officers of these agencies to help them provide better programs and extend their reach in areas where LIGs have not been established.

Enhancing marketing and value chains

The TSSD-AF incorporated a new dimension in providing support to the farmers—marketing and agribusiness development. TSSD-AF’s strategy in market and agribusiness development centered on three main areas: the development of value chains, the establishment of market improvement groups (MIGs), and the identification of small and medium-sized agribusiness enterprises. It focuses on four products where opportunities to add value have been identified: rice, chicken, vegetables, and fish and frogs.

The TSSD-AF works with district value chain working groups and establishes links with the private sector to overcome bottlenecks and develop value chains. It is also forming 448 MIGs through the introduction of a brokering service. This will improve upstream and downstream value chain performance for rice, chicken, vegetables, and aquaculture (if viable existing groups engaged in fish farming are identified). MIGs will receive extension support for rice, chicken, vegetables, and aquaculture production and marketing for up to 3 years until extension support can be provided under private sector contracts. The additional financing identifies 117 small and medium-sized agribusiness enterprises to strengthen their capacity to provide production inputs for MIGs. These agribusinesses include chick, froglet, and fingerling production; chicken feed formulation; and other downstream processes, including those linked to MIGs.

Enabling the Communities

LIGs were formed to provide access to finance and become the conduits for training and extension services for the Tonle Sap Basin’s poorer households. Through LIGs, the project delivered farmers’ training and extension on improved agriculture practices and technology transfer. It also deployed commune extension workers equipped with mobile devices (tablets) to support the farmers’ training and extension activities. These inputs were meant to enable resource-poor farmers to use integrated rice-based farming systems, diversify farm income-generating activities, gain additional sources of livelihood, and improve access to markets.

The project also adopted a farmer field school-based training approach, promoted good agricultural practices (GAP) for fruit and vegetable producers, and conducted multiple field training on improved practices for growing chicken, fish, and frogs. It also developed a range of extension materials (printed and multimedia or video) that have been shared with the public at www.tssdcambodia.org/.

Drawing on its initial experiences, the project introduced new systems for producing fully vaccinated native chicks for sale and improved the practice of chicken rearing. The systems have been adopted and replicated by many projects, including the IFAD-funded projects ASPIRE and AIMS. Training of trainors was done in all provinces covered by the project to develop the capacity of the project staff in implementing the farmer field schools and supporting the GAP producer groups.

Mobilizing Partnerships

The project is a union of the partners’ shared vision: ADB’s emphasis on inclusive growth, IFAD’s goal of poverty reduction, and the Royal Government of Cambodia’s desire to raise the quality of life of its people. Their partnership aimed to hasten agricultural growth in the Tonle Sap Basin to help people escape from poverty. The partners shared resources—ADB’s expertise in developing rural infrastructure and financial services, IFAD’s expertise in agricultural development, and the Government of Finland’s earlier support for the technical assistance for ICT—have paved the way for this project that can radically improve the livelihoods and way of life of the rural households in Cambodia’s poorest communes.

The most important partners, however, are the rural households themselves. This project, through LIGs, is mobilizing the communes so that they have greater participation and responsibility in planning for the future of rural livelihoods. Their participation has enhanced the project by making it more responsive to what the farmers need.

Prospects for a Better Tomorrow

The project is still ongoing but the results have far surpassed the initial targets.

From its initial target of 90 km, the project has been able to rehabilitate 403 km of rural roads and the land area benefiting from improved irrigation facilities has exceeded 50,000 ha. These accomplishments aim to improve the lives of 630,000 rural households within 7 provinces in the Tonle Sap Basin.

To date, the project has also formed 1,907 LIGs with members reaching up to 45,684 rural households. So far, they can access over 150,000 loans that have been used to help them raise livestock, increase rice production, and improve cash crop production. These have helped farmers increase their incomes, enabling them to get sufficient food for their families.

The most compelling achievement of the project is the way it has empowered poor smallholder farmers to decide to improve their livelihoods and way of life. They are not only increasing their incomes, but they have also learned how to help other farmers like themselves. Through LIGs, the farmers have learned to work together to benefit the whole group, gain access to finance and training, and transition into collective marketing of their members’ produce.