RISK ANALYSIS OF RICE SUPPLY CHAIN IN CAMBODIA

Abstract

Rice is integral to Cambodia, yet farm households face many risks. The primary aim of this study is to analyze the risks facing the Cambodian rice supply chain. The study focuses on three specific objectives, 1) identifying the agricultural risk factors in the rice supply chain; 2) investigating risk factors that affect rice supply chain performance; 3) proposing risk management strategies in the sustainable rice supply chain management. The first qualitative area of exploration from this exploratory sequential design was to identify the potential risks, in which the researchers conducted in-depth interviews with 10 different experts in Cambodia. Using the structural equation model (SEM) in Amos and descriptive statistics analysis, this study investigated the risks that affect the rice supply chain performance on an environmental, social, and economic basis, and subsequently proposed risk management strategies. The researchers collected quantitative data from 200 Cambodian farmers through interviews and surveys. The results illustrate that the farm households face 18 risk factors. The researchers consolidate 18 risk factors into four classifications: supply risks, production risks, demand risks, and environmental risks. Nine experts out of the 10 who were interviewed (90%) consider themselves “highly vulnerable” (with a rating of 4 or 5 on the Likert scale), while only 1 expert has a “neutral” stance (with a rating of 3 on the Likert scale); these results concerning risk identification are visualized in the likelihood-effect-matrix of the rice supply chain. After investigating the risks, the researchers found that rice supply chain performance is significantly affected by the rice supply chain risks. In particular, four groups are created, representing two different approaches to mitigate, avoid, transfer, and cope with agricultural risks, i.e., ex-ante and ex-post risk management strategies. This study fully answers research questions regarding risk identification, risk investigation, and risk management. Due to many risks in the Cambodian rice supply chain, there exists an urgent need to pay additional attention to these matters.

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