Cambodia Mekong River Basin Agriculture and Logistics System Development Project Study Report March 2010 Engineering and Consulting Firms Association, Japan Japan Development Institute (JDI) 0 0 Photos Unused Land Rice Market in Phnom Penh Corn Red Bean Acacia Plantation Jatropha 1 National Route 1: Phnom Penh National Route 4: Kampong Speu National Route 5: Pursat Provincial Road: Pursat National Route 6: Kampong Thom National Route 6: Siem Reap 2 Tonle Sap Lake: Siem Reap Tonle Sap Lake: Siem Reap Tonle Sap River: Kampong Chhnang Tonle Sap River: Kampong Chhnang Mekong River: Kampong Cham Mekong River: Kampong Cham 3 Phnom Penh Hub Port Site Phnom Penh Hub Port Site Agro Forestry Processing SEZ: Coal Fire Agro Forestry Processing SEZ: Coal Power Plant Agro Forestry Processing SEZ: Storage Agro Forestry Processing SEZ: Weight 4 Maps 5 Abbreviations AC Asphalt Concrete ADB Asian Development Bank AFTA ASEAN Free Trade Area AIDOC Agricultural Information and Documentation Center AusAID Australian Agency for International Development CARDI Cambodian Agricultural Research and Development Institute CEPT Common Effective Preferential Tariff DBST Double Bitumineux Surface Treatment DWT Dead Weight Ton ELC Economic Land Concession FAO Food and Agriculture Organization FDI Foreign Direct Investment FOB Free On Board GDP Gross Domestic Production IFSR International Federation for Systems Research IRAP Integrated Rural Accessibility Planning IRRI International Rice Research Institute MAFF Ministry of Agriculture, Forestry and Fishery MDG Millennium Development Goal MOWRAM Ministry of Water Resources and Management MPWT Ministry of Public Works and Transportation MRC Mekong River Commission MRG MONG Reththy Group NAP Navigation Program NIS National Institute of Statistics NR National Road NSDP National Strategic Development Plan ODA Official Development Assistance PAS Sihanoukville Autonomous Port PPAP Phnom Penh Autonomous Port 6 RGC Royal Government of Cambodia RRL Rail & Road Logistics SBST Single Bituminous Surface Treatment SCW Save Cambodia’s Wildlife SEZ Special Economic Zone SLC Social Land Concession TEU Twenty-foot Equivalent Unit USD US Dollars USDA United States Department of Agriculture QIP Qualified Investment Project VAT Value Added Tax 7 Index 1. Background and Objective………………………………………….…………………….…..14 1-1. Global Trend on Agro-forestry Demand…………..…………………………………....14 1-2. Cambodian Agro-forestry Development and Issues….....……………………………..14 1-3. Objective……….……..…………………………………………….…………………...15 2. Current Status of Agriculture Sector in Cambodia………………………………….………..16 2-1. Development Strategy/Policy……………………………………………………………16 2-1-1. Development Strategy………………………………………………………………16 2-1-2. Investment Policies…………………………………………………………………17 2-2. Current Development Trend of Agro-Forestry Sector in Cambodia…………………….19 2-2-1. Land Use……………………………………………………………………………19 2-2-2. Agriculture Production……………………………………………………………...22 2-3. Current Agro-Products Market Situation………………………………………………..27 2-3-1. Market Situation…………………………………………………………………….27 2-3-2 Issues on Agro-forestry Market……………………………………………………..29 3. Infrastructure in Cambodia………………………………………………….………………..30 3-1. Road Transportation……………………………………………………………………..30 3-2. Rail way Transportation…………………………………………………………………32 3-3. Water Transportation……………..……………………………………………………..34 4.Agricultural Logistic Development Concept for Cambodia…………………………………..37 4-1. Thailand Gateway Based Agricultural Area (150km range)…………………………..37 4-2. Southern Sihanoukville Port Based Agriculture Area (150-200 Circle center)……….39 4-3. Vietnam Gateway Based Mekong River Basin Agriculture Area (150-200km)………41 4-4. Promotion of Agro-forestry Sector by Development of Supply Chain Logistic System.43 5. Potentiality of Mekong River Basin Agriculture and River Transport……………….………44 5-1. Agro-forestry Development Potentiality………………………………………………...44 5-1-1. Rice Production……………………………………………………………………..44 5-1-2. Non-rice area (Corn, Cassava, Beans)…………………..………………………...45 5-1-3. Non-rice & hilly area (lumber, woodchips, rubber)……..………………………...46 5-2. Logistic System Development Potentiality………………………………………………47 5-2-1. Hub Port at Mekong River east of Phnom Penh…………………………………….47 5-2-2. Feeder Regional Ports……………………………………………………………….48 5-2-3. Feeder Roads………………………………………………………………………...51 5-2-4. Transportation Route………..…………………………….…………………………51 6.Proposed Agro-processing SEZ and HubPort Project………………………………………....54 8 6-1. Agriculture Production Improvement Project…………………………………………..55 6-1-1. Plantation & Contract Farming…………………………………………………….55 6-1-2. Irrigation……………………………………………………………………………56 6-1-3. Rural Road………………………………………………………………………….58 6-1-4. Post Harvesting Facility…………………………………………………………….59 6-2. Agro-forestry Processing SEZ Project…………………………………………………..60 6-3. Port Development Project……………………………………………………………….62 6-4. Socio-Environmental Impact……………………………………………………………63 6-5. Socio-Economic Impact…………………………………………………………………65 7. Possible Financial Scheme………………….………………………………………………..66 7-1. Public Financing Project…………………………………………………………………67 7-2. PPP Project……………………………………………………….………………………67 7-3. Purely Private Financing Project…………………………………………………………68 8. Recommendation and Action Plan……………………………………………………………69 9. Summary and Conclusion…………………………………………………………………….70 10.Appendix……………………………………………………………………………………..76 9 Tables Table 1-1. Food Price Index................................................................................................. 14 Table 2-1. Macroeconomic Indicator ................................................................................... 16 Table 2-2. Land Use ............................................................................................................. 20 Table 2-3. SLC Distribution by Nov. 2009 .......................................................................... 22 Table 2-4. Industrial Crop Production ................................................................................. 24 Table 2-5. Agro-forestry Product Diversification Plan ........................................................ 25 Table 2-6. Product wise Agriculture Production Area ......................................................... 25 Table 2-7. Trend in Cambodian Industrial Plantation .......................................................... 26 Table 2-8. Major Exporting Agro-Forestry Products (2007) ............................................... 28 Table 2-9. Rice/Paddy Trade Comparison among Neighboring Countries (2007) .............. 28 Table 2-10. Industrial Crops Trade Comparison among Neighboring Countries (2007)..... 28 Table 3-1. Comparative Road Density Indicators (2006) .................................................... 31 Table 3-2. Road Condition in Cambodia ............................................................................. 31 Table 3-3. Existing Railway condition in Cambodia ........................................................... 32 Table 3-4. Handling Volume Condition in PPAP and PAS (2008) ...................................... 35 Table 3-5. Depth of Tonle Sap Lake (River) by Regions..................................................... 35 Table 3-6. Handling Capacity of the Ports along Tonle Sap Lake (River) .......................... 36 Table 3-7. Current Maximum Navigable Vessel Size .......................................................... 36 Table 4-1. Competitive advantage of the cost using Mekong River through Vietnam ........ 43 Table 4-2. Comparison of Energy Efficiency ...................................................................... 43 Table 5-1. Trend of Agricultural Production ........................................................................ 44 Table 5-2. Projection for Rice Cultivation in 2015 .............................................................. 45 Table 5-3. Authorized Economic Land Concessions (including plan) ................................ 45 Table 5-4. A Potential Land for Industrial Plantation for Woodchip in Cambodia .............. 47 Table 5-5. GDP per capita PPP (Unit: USD) .................................................................... 47 Table 5-6. Navigation from Mekong Mainstream to Mekong Delta Gateway .................... 53 Table 6-1. Landholdings (% of households) ........................................................................ 56 Table 6-2. Poverty Rate…………………………………………………………………….68 Table 6-3. Population ........................................................................................................... 65 10 Figures Figure 2-1: Land Use Map ................................................................................................... 19 Figure 2-2. Soils of the Main Rice Growing Area ............................................................... 23 Figure 3-1. National Road Network in Cambodia ............................................................... 30 Figure 3-2. ADB Railway Project ........................................................................................ 33 Figure 4-1. Thailand Gateway Based Agricultural Area ...................................................... 38 Figure 4-2. Southern Sihanoukville Port Based Agriculture Area ...................................... 40 Figure 4-3. Vietnam Gateway Based Mekong River Basin Agriculture Area ..................... 42 Figure 5-1. Project Site and JDI Project Site ....................................................................... 48 Figure 5-2. Potential Feeder Port ........................................................................................