Introduction
The Fertiliser Market in Takeo
Growth in Farmer Demand
There is no problem to buy fertilisers in our villages. If you have money you can buy any amount or any kind you wish to buy. You can also find different product brands in a shop near our village here. In addition, you can also buy on credit and pay back at the harvest. (Group interviews with farmers in Samrong, Prey Kabbas, and Kaoh Andaet districts)
We have few fertiliser products in my store at this time, because it is off-season and farmers do not need [fertiliser] at the present. During planting time, it is not difficult; we can order any products and amount from different suppliers. We just call to them and they will bring their fertilisers to my shop here within a day or two. They are in Takeo or from Phnom Penh. (Key-informant interviews with retailers in Samrong and Prey Kabbas districts)
Fertiliser Supply Chain
If we sell on a cash basis, we could make a profit of only about 1,500 to 2,000 riels per bag. Prices are very competitive among retailers in the market; if we do not sell with this profit, other shops will sell … If we sell on credit we can mark-up about 15,000–20,000 riels per bag and receive repayment from farmers within 3–6 months, but we sell on credit to those whom we know well and who pay back on time after harvesting their crops. Payment can be made either in paddy or cash. Every year, about half of sales are made on credit. If depending on cash sales we can earn very little from this business. (Interviews with retailer shops in Tram Kak District)
Marketing Margins
USD/50 kg | % of imported price | |
---|---|---|
Cost to importer at Vietnam border | 31.5 | 100 |
Transport to Cambodia (<100 km @ $0.25) | 0.3 | 0.8 |
Transfer into border warehouse | 0.1 | 0.2 |
Cost into border warehouse | 31.8 | 101.0 |
Label changes and importer’s mark-up | 1.7 | 5.3 |
Importer’s selling price | 33.5 | 106.3 |
Transport to province (100 km @ $0.25) | 0.3 | 0.7 |
Distributor mark-up and handling | 0.8 | 2.2 |
Into store of provincial distributor | 34.5 | 109.3 |
Provincial distributor mark-up | 0.5 | 1.4 |
Distributor selling price | 35.0 | 110.7 |
Transport to village dealer and handling | 1.0 | 2.9 |
Into store of village dealer | 36.0 | 113.6 |
Dealer mark-up for cash sale | 0.5 | 1.4 |
Retail cash price in village | 36.5 | 115.0 |
Value added—importer to retailer | 5.00 | 15 |
Fertiliser Quality Issues
Sample | Product (N-P-K-S) | % N | % P2O5 | % K2O | % S | Total nutrients (%) |
---|---|---|---|---|---|---|
5 | 20-20-15 | 21.90 | 10.50–11.40 | 9.00 | 77.00 | |
12 | 20-20-15+TE | 16.40–16.80 | 16.70–17.40 | 14.20 | 88.00 | |
21 | 20-20-15+TE | 17.10 | 18.20–18.00 | 13.60 | 68.22 | |
24 | 20-20-15 | 17.70–18.50 | 19.50 | 11.60 | 90.18 | |
28 | 20-20-15 | 20.70 | 19.60 | 9.77 | 91.04 | |
34 | 20-20-15+TE | 17.20 | 17.50–17.30 | 12.80 | 86.36 | |
38 | 20-20-15 | 17.80–18.10 | 21.20 | 10.40 | 90.36 | |
42 | 16-16-8-13 | 13.90 | 5.51–5.47 | 0.15 | 12.10 | 48.90 |
43 | 16-8-8-13 | 17.20 | 8.66 | 2.85 | 15.60 | 89.72 |
46 | 20-20-15-13 | 24.60 | 12.80–12.20 | 11.90 | 2.12 | 89.64 |
60 | 16-8-8-13 | 16.30 | 6.80–6.92 | 3.47 | 15.00 | 83.41 |
73 | 20-20-15+TE | 17.80–19.00 | 20.30 | 9.41 | 88.56 | |
88 | 20-20-15+TE | 16.10–16.20 | 20.30 | 11.70 | 87.64 | |
92 | 20-20-15+TE | 15.80–16.10 | 21.10 | 9.79 | 85.44 | |
97 | 25-20-10+TE | 23.00 | 19.60 | 12.30 | 99.82 | |
102 | 20-20-15+TE | 21.60 | 16.20–16.60 | 9.43 | 86.60 |
You can see these samples we took from some dealers and retailers in Takeo, we suspected that they are fake products, we can inspect by visual inspection only, and we did not know exactly whether these samples have low nutrient analysis. If we want to analyse these samples at the headquarters laboratory in Phnom Penh we need money to pay for the services, but we have no budget to do so. These are the problems and the capacity limitation of our staff to control the fertiliser quality problems here. (Interviews with provincial agricultural regulatory officers)
Last production year, about 200–300 tons of fake DAP products were sold in this area. Some mobile dealers drove their trucks loaded with DAP products with trademark of HPC brand name and sold to either farmers or retailers with cheaper prices than usual. When we inspect fertiliser inside the bags, they are not the products of HPC brand. We cannot find those who carried out this malfeasance, but we arrest retailers who on-sell to farmers. Farmers complained about no crop response though they applied more fertiliser than usual … Now farmers realised that cheap fertilisers are not good fertilisers. They want good quality fertiliser though it has a bit higher price. (Interviews with fertiliser importer and dealers in Prey Kabbas)
Some retailers sell Thai urea, a blue bag urea, a most popular well-known urea for most farmers; but in fact the product inside is not the Thai one. It may be a granular urea produced either in Vietnam or China, but it is re-bagged with the Thai brand and sells as the Thai product. It is difficult for farmers to differentiate the Thai product from the urea produced either in Vietnam or China because it’s granular and the shape is almost the same. Farmers can know it is fake only by the crop response, but fertiliser dealers know which is Thai and which is not, and mobile distributors cannot cheat us. Thus, it is easy for malfeasance to occur for urea. This is the most common fake product in the market. (Interviews with retailers in districts visited and PDA officials)
The problem of fertiliser is still affecting the farmers, who are the fertiliser users, but the problems have reduced greatly compared to the peak price level in 2008. Presently, it is affecting about 5-10% of sales in the market. (Key-informant interviews with importers and senior PDA officials)
In Takeo there are a lot of mobile distributors and we cannot control their business activity. They have no specific office and we cannot find exactly where they come from. They have a long and good relationship with some importers, and thus they can buy fertiliser and load onto their trucks to resell to any shops and even farmers. They can adulterate the fertiliser before they deliver and resell it to retailers. They have both good- and low-quality fertilisers to deliver and sell to retailers; usually the fake ones are kept inside the trucks and the authorities have difficulty to find them. (Interview with provincial agricultural regulatory officer)
Almost every day someone comes to ask us whether we have used fertiliser bags to sell to them. They ask only for used bags that have good brands and are in good condition. If we have them we can get 4,000 riels per bag. (Group interviews with farmers in Tram Kak, Prey Kabbas, and Kaoh Andaet)
There are a lot of mobile dealers who come to ask us [to buy their products] almost every day. They have many kinds of fertiliser on their trucks and different product brands with different prices. They have cheaper prices but they are not as good as the higher-priced ones. We are retailers, we know which is good quality and which is low quality (fake products). The fake product is for those who want lower prices. Sometimes when we run out of stock and need fertilisers to sell, we can order from these mobile dealers. We do not know their office but we normally contact them by calling. (Interview with retailer in Prey Kabbas)
If you buy cheap fertilisers, you have a high chance to get fake fertilisers. Cheap fertiliser is not as good as the higher-priced one. If we note that we bought fertilisers of poor quality from a retailer, we may buy from another retailer next time. (Group interviews with farmers in Tram Kak, Prey Kabbas, and Kaoh Andaet)
Season | Paddy outputa(t) | 20% yield loss (t) | 50% yield loss (t) | Paddy price (KHR/kg)b | Gross value of lost output (USD) | |
---|---|---|---|---|---|---|
20% yield loss | 50% yield loss | |||||
Wet | 64,935 | 12,987 | 32,467 | 1000 | 3,246,725 | 8,116,813 |
Dry | 45,569 | 9114 | 22,784 | 850 | 1,936,666 | 4,841,664 |
Total | 110,504 | 22,101 | 55,251 | 5,183,391 | 12,958,476 |
Fertiliser Policy
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increasing certification for fertiliser dealers and retailers and providing training for wholesalers and retailers about the signs of fake fertilisers, adulteration, and re-bagging;
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providing training for fertiliser users to increase awareness about fake fertilisers;
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increasing competition among the major fertiliser importers for market share in a small total market; and
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adopting a new law in late 2011 to regulate the registration, trade, and use of agro-chemical products in Cambodia. The new law is comprehensive and needs to be applied in conjunction with specific regulations (sub-decrees) that can be amended by MAFF without parliamentary approval.