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Agro sector adopting digital tech

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Only one per cent of farmers currently use mobile banking. Heng Chivoan

Agro sector adopting digital tech

At least 92 per cent of the Kingdom’s agricultural input suppliers use digital payments in their businesses while 45 per cent use e-commerce, a new study found.

The research, entitled “Digital Challenges and Opportunities of Agricultural Input Suppliers in Cambodia”, was compiled by the Centre for Policy Studies (CPS).

CPS director Chan Sophal presented the study on December 29 at the 7th Annual NBC Macroeconomic Conference, organised by the National Bank of Cambodia (NBC) under the theme “Discussion of Cambodia’s Economic Development Models”.

The report defined agricultural input suppliers as “importers of agricultural products such as fertilisers, pesticides and agricultural machinery”.

Sophal said the study interviewed 225 representatives from 40 of the 107 agricultural input suppliers registered at the Ministry of Agriculture, Forestry and Fisheries and an undisclosed number of unregistered depots.

The businesses were all based in Battambang, Tbong Khmum, Siem Reap, Prey Veng, Kandal and Takeo provinces, which have untapped potential for agriculture, he said.

The study found that 90 per cent of respondents use smart phones and 90 per cent have internet access, of which 41 per cent have Wi-Fi connections.

Additionally, 55 per cent of the respondents have bank accounts and 23 per cent of those pay with mobile apps.

Sophal said: “We observed that the use of cash payments is still widespread. We wish to reduce direct cash payments. We would like to see more of them trained in digital literacy.

“We also want to see more investment in the sector to encourage entrepreneurs to take on more start-ups and expand the logistics system.”

He said 59 per cent of respondents settle their debts with Phnom Penh-based ones with cash, while 14 per cent use intermediary agencies and nine per cent do so through banks.

Only a tiny six per cent of them pay farmers through digital means, while only one per cent of farmers were able to use mobile banking, with many citing distrust or lack of knowledge, Sophal said.

He said 63 per cent reported difficulties in paying digitally, mainly due to internet disruptions.

“Digital commerce performance is very low among them, with 15 people or seven per cent [of respondents reporting] using e-commerce in their business operations.

“Most of them know how to use Facebook but there are only three website users because they think that no one can make much of a profit from digital business. Nonetheless, they hope to sell better and be more reliable in the future,” Sophal said.

On the other hand, the general consensus was that digital payments provide opportunities and benefits, reducing the risk of loss and theft involved in direct cash payments by 43 per cent, he said.

He said 19 per cent of respondents claimed that digital payments would help them manage their finances and cash flows, while 17 per cent said they would save time and streamline processes, as well as trim administrative costs.

“We know that the number of digital users among agricultural inputs sellers is small, as the internet infrastructure is booming due to the availability of 3G, 4G, 5G, so it will be easier for them to embrace digital technology via smartphones. But they have little understanding of the E-Commerce Law,” Sophal said.

At the conference’s closing ceremony, NBC director-general Chea Serey said the central bank would mull over posting the results of the study on its website.

She said she hopes the research will provide relevant institutions with pertinent data to formulate a comprehensive national economic development policy.

The NBC is committed to hold the 8th Annual Macroeconomic Conference next year, with a theme to be announced in the near future, she said.

“I would like to take this opportunity to encourage a continuous culture of research, discussion and knowledge sharing among researchers whether from the public or private sectors, NGOs or development partners to support research on other key topics,” Serey said.

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