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CICP Working Paper No. 37: Cambodia's Agriculture: Challenges and Prospects by Sok Siphana, Chap Sotharith

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CICP Working Paper No. 37: Cambodia's Agriculture: Challenges and Prospects by Sok Siphana, Chap Sotharith No. 37 Cambodia’s Agriculture: Challenges and Prospects Sok Siphana, Chap Sotharith, Chheang Vannarith January 2011 With Compliments This Working Paper series presents papers in a preliminary form and serves to stimulate comment and discussion. The views expressed are entirely the author’s own and not that of the Cambodian Institute for Cooperation and Peace Published with the funding support from The International Foundation for Arts and Culture, IFAC 1 About Cambodian Institute for Cooperation and Peace (CICP) The CICP is an independent, neutral, and non-partisan research institute based in Phnom Penh, Cambodia. The Institute promotes both domestic and regional dialogue between government officials, national and international organizations, scholars, and the private sector on issues of peace, democracy, civil society, security, foreign policy, conflict resolution, economics and national development. In this regard, the institute endeavors to: • organize forums, lectures, local, regional and international workshops and conference on various development and international issues; • design and conduct trainings to civil servants and general public to build capacity in various topics especially in economic development and international cooperation; • participate and share ideas in domestic, regional and international forums, workshops and conferences; • promote peace and cooperation among Cambodians, as well as between Cambodians and others through regional and international dialogues; and • conduct surveys and researches on various topics including socio-economic development, security, strategic studies, international relation, defense management as well as disseminate the resulting research findings. Networking The Institute convenes workshops, seminars and colloquia on aspects of socio-economic development, international relations and security. So far CICP has published nearly a hundred books, papers and articles in various development issues and we have affiliated with many regional and global academic network including a regional association of similarly oriented think tanks known as the ASEAN Institutes of Strategic and International Studies (ASEAN-ISIS), Council for Security Cooperation in the Asia Pacific (CSCAP), East Asian Development Network (EADN) and Global Development Network (GDN). In addition, CICP is one of the founding members of Economic Research Institute for ASEAN and East Asia (ERIA), which is initiated by the Ministry of International Trade and Industry (MITI), Japan. Cambodian Institute for Cooperation and Peace, CICP Pum Paung Peay, Sangkat Phnom Penh Thmey, Khan Russey Keo, Phnom Penh, Kingdom of Cambodia P.O.Box 1007, Phnom Penh, Cambodia Phone: 85512 819953 Tel: 85516 982558 Fax: 85516 982559 Email: [email protected]; [email protected] Website: http://www.cicp.org.kh 2 About the Authors Dr. Sok Siphanna is currently serving as senior economic advisor to the Royal Government of Cambodia and member of board of directors of the Cambodian Institute for Cooperation and Peace. Dr. Chap Sotharith is a chief of cabinet and advisor the Deputy Prime Minister Men Sam An and member of the board director of the Cambodian Institute for Cooperation and Peace. Dr. Chheang Vannarith is an executive director of the Cambodian Institute for Cooperation and Peace. The authors would like to thank the Economic Institute for ASEAN and East Asia (ERIA) for supporting this research project. Abstract Agriculture is one of the most complex industries since it involves many stakeholders in different sectors. Cambodia has huge potential to develop agriculture industry since it has vast flat fertile land and about 80 percent of its population living in the rural area. However, the productivity of this sector is still a big challenge. In addition, agricultural export is still limited due mainly to lack of certified quality standard, finance, crops diversification, and market information. In order to develop agriculture, Cambodia needs to cooperate with different partners especially development partners and private sectors to address the gaps in order to reach its potential. 3 Cambodia’s Agriculture: Challenges and Prospects 1. Introduction “Besides making ourselves food sufficient, we have to strive to make Cambodia a real exporter of rice and one of the main actors in regional and world food security.”1 Cambodia has succeeded in generating high economic growth in its recent history, but the challenges are whether it can manage to sustain rapid growth for an extended period. Nearly a decade long of rapid growth had a significant impact on income per capita with more than a doubling from US$288 in 2000 to US$900 in 2009. As a result, Cambodia is one of the few countries that have achieved sustained rapid growth: of 194 countries with data, 46 have achieved 7 percent annual growth on average for 14 consecutive years. Taking into consideration the time period from 1998 to 2007 Cambodia’s growth performance ranks 6th in the world.2 Cambodia went through a unique window of opportunity in its recent history with the end of a multi-decade long of conflict and the establishment of peace and political stability coinciding with a favorable external environment of rapid growth of global trade. A profound structural transformation took place with an aggressive pace of economic integration into the global economy: clear policies to encourage Cambodia’s fast track accession to the World Trade Organization; a shift of jobs from agriculture to manufacturing; a booming tourism sector, and a migration from rural to urban areas. Growth was fueled to some extent by drawing on some of the country’s natural and agricultural assets (forests, fisheries, land) and its cultural assets, such as Angkor Wat temples. Cambodia is a case in point in experiencing geography driven regional integration since geography has played an influential part in Cambodia’s growth, being a coastal country in a dynamic and rapidly evolving regionally integrated South East Asia, and East Asia. With vast flat agricultural lands and access to a number of big rivers and their tributaries, Cambodia has potential to be a significant agricultural net exporter. In order to realize the full potential of agriculture sector, investment in basic physical infrastructure such as irrigation and rural roads are necessary, agricultural technical support and facilitation of trading process and supply chain sustainability are important to raise productivity and trade volume. With the government’s ambition to turn Cambodia into one of major rice exporters , Cambodia needs to promote investment in agriculture and rural areas from many sources including public, private investment and from other sources. This paper aims at examining the current state of agricultural and rural infrastructure development in Cambodia through the lenses of public policy and 1 Samdech Hun Sen, Cambodian Prime Minister, in his speech on 17 August 2010 2 Sustaining Rapid Growth in a Challenging Environment, World Bank 2009 4 investment, private investment NGOs’ activities and development partners assistance in the sector. The paper argues that increasing attention and investment has focused on agriculture in Cambodia. The increasing productivity and market expansion plus regional cooperation and integration are bringing agriculture sector to the frontline of the national economic development strategy with opportunities. However, the process of infrastructure investment and development is still slow and the value chain creation and products diversification are still big challenges. 2. Cambodia Agricultural Development Policy Being aware of the significant role of agriculture in poverty reduction, the government integrates agriculture to be one of the priorities in Royal Government of Cambodia’s Rectangular Strategy. The four sides of this rectangle are: (i) improving agricultural productivity and diversification (including animal husbandry, food security and nutrition, and rural development); (ii) land reform and de-mining; (iii) fisheries reform; and (iv) forestry reform (including environment protection and conservation). Notable features during the last two and half years were: continued RGC efforts in arresting depletion of natural resources and environment; rehabilitating and enhancing irrigation potential; favourable weather conditions; some diversification into cash crops; issuance of more land titles to the farmers; and, further improvement of rural infrastructure. The National Strategy for Agriculture and Water, 2006- 2010, was developed through a consultative process and adopted in 2007.3 The Royal Government’s overall goal is “poverty reduction and economic growth through enhancement of agriculture sector development”. The sectoral goal is to “ensure food security, increase incomes, create employment and improve nutrition status for all people by improving productivity and diversification, and commercialization of agriculture with environmentally sound protection and food security”. An “Agriculture Sector Strategic Development Plan: 2006-2010” was prepared by the Ministry of Agriculture, Fisheries and Forestry (MAFF) in October 2005 in order to achieve RGC’s strategic goals as well as NSDP 2006-2010. A Strategy for Agriculture and Water Sectors that has been prepared by TWG for Agriculture and Water and with the coordination of DPs was adopted in March 2007. However, a sector-wide programme to implement this strategy is expected to be finalised and approved in 2010. The “Agriculture Sector Strategic
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