Rapid Diffusion of Combine Harvesters in Cambodian Rice Farming: A Business Analysis

Combine harvesters have become widely used in recent years in rice farming in Cambodia on a custom-hiring basis. This study examines factors promoting investment in combine harvesters and the effects of the surge in new entrants in the custom-harvesting business. Analysis of 30 custom harvesters’ data collected by the researcher in Takeo province indicates that the high profitability of the business, decrease in interest rate, and increasing price of land used as collateral prompted land-rich households to enter the custom-harvesting business by taking large loans from financial institutions. The secondhand combine harvesters’ market in Vietnam has helped custom harvesters to sell their used machines to buy new ones. The surge in new entrants to the business, however, has driven down custom-harvesting service fees and has, thus, made the business unprofitable. This has partly been caused by financial institutions that have continued to provide funds to new entrants without anticipating excessive entry into the custom-harvesting business.