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Agriculture Sector Financing and Services for Smallholder Farmers

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Agriculture Sector Financing and Services for Smallholder Farmers Agriculture Sector Financing and Services for Smallholder Farmers Co-Authors: Ngo Sothath and Chan Sophal Published by: The NGO Forum on Cambodia’s Aid Effectiveness Project of the Development Issues Programme Layout designed by: Mr. Phourn Yu, Information and Publication Officer Photography by: NGO Forum Staff and Mr. Yous Samrith DISCLAIMER: The views expressed in this report are those solely of the authors and do not necessarily represent the views of The NGO Forum on Cambodia or Action Aid Cambodia. While the content of this report may be quoted and reproduced, acknowledgement and authorization of the report’s authors and publisher would be appreciated. © The NGO Forum on Cambodia – September 2010 1 Agriculture Sector Financing and Services for Smallholder Farmers Ngo Sothath and Chan Sophal Cambodian Economic Association (CEA) In cooperation with The NGO Forum on Cambodia and ActionAid Cambodia Phnom Penh September 2010 i Agriculture Sector Financing and Services for Smallholder Farmers Table of Contents List of tables ................................................................................................................................... iii List of figures ................................................................................................................................. iii List of boxes ................................................................................................................................... iv List of acronyms .............................................................................................................................. v Acknowledgement ......................................................................................................................... vii Executive summary ...................................................................................................................... viii 1. Introduction ............................................................................................................................... 2 1.1 Background ........................................................................................................................... 2 1.2 Smallholder farmers in this study ......................................................................................... 3 1.3 Methodology ......................................................................................................................... 3 2. Profile of agriculture in Cambodia .......................................................................................... 7 2.1 Agriculture sector performance ............................................................................................ 7 2.2 Agricultural land in Cambodia ............................................................................................. 7 2.3 Agricultural production ........................................................................................................ 8 2.4 Challenges in agriculture .................................................................................................... 11 3. Agricultural policies and programs in Cambodia ................................................................ 17 3.1 National strategies and plans .............................................................................................. 17 3.2 Sectoral strategies and plans ............................................................................................... 17 3.3 Strategies of development partners ..................................................................................... 19 4. Agriculture financing ............................................................................................................. 22 4.1 National budget and expenditure ........................................................................................ 22 4.2 Official development assistance ......................................................................................... 28 5. Agricultural services for farmers: evidence from case studies ............................................ 38 5.1 Overview of agricultural extension services at provincial level ......................................... 38 5.2 Availability of agricultural extension services at district level .......................................... 40 5.3 Sources of agricultural extension services .......................................................................... 43 5.4 Benefits and challenges of agricultural extension services ................................................ 45 6. Conclusions and recommendations ........................................................................................ 52 6.1 Conclusions ........................................................................................................................ 52 6.2 Recommendations .............................................................................................................. 54 References .................................................................................................................................... 55 ii Agriculture Sector Financing and Services for Smallholder Farmers List of tables Summary of public expenditure 2006-2009 .............................................................................. x Table 1.1: Sample sites of the field study ................................................................................. 5 Table 2.1: Share of agricultural production in Cambodia’s GDP, 2000-2008 .......................... 7 Table 2.2: Production of subsidiary and industrial crops, 2000-2009 .................................... 10 Table 2.3: Balance of food production by province, 2004-2009 ............................................ 12 Table 3.1: RGC priorities and targets in the agriculture sector for 2010 ................................ 17 Table 3.2: Sectoral programming and costings in the ASSDP 2006-2010 ............................. 18 Table 3.3: Five program areas of the SAW 2006-2010 .......................................................... 18 Table 4.1: Recurrent expenditure for MAFF and MoWRAM, 2005-2009 ............................. 26 Table 4.2: Capital expenditure for MAFF and MoWRAM, 2005-2009 ................................. 26 Table 4.3: RGC capital expenditure, 2005-2009 ..................................................................... 27 Table 4.4: Involvement of the World Bank, ADB and the EU in agriculture, 2005-2009 ..... 31 Table 4.5: Profile of loans for the agriculture sector in Cambodia, 2005-2010 ...................... 32 Table 4.6: Aid disbursement by ASSDP subsector, 2007-2010 ............................................. 34 Table 4.7: Aid disbursement by SAW program area, 2007-2010 ........................................... 35 Table 4.8: Distribution of agricultural aid by agro-ecological regions, 2007-20010 .............. 36 Table 5.1: Administration and personnel in agriculture in Kandal and Takeo provinces ....... 38 Table 5.2: Availability of agricultural services at provincial level ......................................... 39 Table 5.3: Coverage of agricultural extension services in studied districts ............................ 40 Table 5.4: Coverage of extension services at commune and village levels ............................ 41 Table 5.5: Types of extension services received by farmers ................................................... 42 Table 5.6: Coverage of agricultural services in Kiri Vong and Tram Kak districts ............... 43 Table 5.7: Distribution of extension services in three communes of Kandal province .......... 44 Table 5.8: Distribution of extension services in three communes of Takeo province ............ 45 Table 5.9: Perceptions of effects of agricultural extension services on farmers’ livelihoods . 46 List of figures Figure 2.1: Distribution of agricultural land in Cambodia, 2005 and 2008 .............................. 8 Figure 2.2: Evolution of agricultural land and production, 2000-2009 .................................... 8 Figure 2.3: Improvement of paddy productivity, 2000-2009 .................................................... 9 Figure 2.4: Distribution of paddy production by province, 2009 .............................................. 9 Figure 2.5: Livestock production, 2000-2009 ......................................................................... 11 Figure 2.6: Productivity of paddy in Cambodia versus other countries in the region, 2008 ... 13 Figure 4.1: Availability of resources for public expenditure, 2005-2010 ............................... 23 Figure 4.2: Public resources available for MAFF and MoWRAM, 2005-2010 ..................... 23 Figure 4.3: Trend of recurrent budget allocation for MAFF and MoWRAM, 2005-2010 ..... 24 Figure 4.4: Trend of capital budget allocation for MAFF and MoWRAM, 2005-2010 ......... 24 Figure 4.5: Budget expenditure, 2005-2009 ............................................................................ 25 Figure 4.6: ODA disbursements to Cambodia, 2005-2010 ..................................................... 29 Figure 4.7: Characteristics of external assistance to agriculture, 2007-2010 .......................... 30 iii Agriculture Sector Financing and Services for Smallholder Farmers List of boxes Box 5.1: Extension advice reduces costs on pesticide ............................................................ 46 Box 5.2: Farming techniques increase returns, although rotating is not yet possible ............. 46 Box 5.3: Integrated
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