CDRI - Cambodia’s leading independent development policy research institute Foreign Investment in Agriculture in Cambodia SAING Chan Hang, HEM Socheth and OUCH Chandarany with PHANN Dalis and PON Dorina Working Paper Series No. 60 June 2012 A CDRI Publication Foreign Investment in Agriculture in Cambodia CDRI Working Paper Series No. 60 SAING Chan Hang, HEM Socheth and OUCH Chandarany with PHANN Dalis and PON Dorina CDRI - Cambodia’s leading independent Food and Agriculture Organization development policy research institute of the United Nations (FAO) Phnom Penh, June 2012 CDRI Working Paper Series No. 60 i The designations employed and the presentation of material in this information product do not imply the expression of any opinion whatsoever on the part of the Food and Agriculture Organization of the United Nations (FAO) concerning the legal or development status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. The mention of specific companies or products of manufacturers, whether or not these have been patented, does not imply that these have been endorsed or recommended by FAO in preference to others of a similar nature that are not mentioned. The views expressed in this information product are those of the author(s) and do not necessarily reflect the views of FAO. ISBN 99950–52–58-4 All rights reserved. FAO encourages the reproduction and dissemination of material in this information product. Non-commercial uses will be authorized free of charge, upon request. Reproduction for resale or other commercial purposes, including educational purposes, may incur fees. Applications for permission to reproduce or disseminate FAO copyright materials, and all queries concerning rights and licences, should be addressed by e-mail to [email protected] or to the Chief, Publishing Policy and Support Branch, Office of Knowledge Exchange, Research and Extension, FAO, Viale delle Terme di Caracalla, 00153 Rome, Italy. © FAO 2012 Foreign Investment in Agriculture in Cambodia CDRI Working Paper Series No. 60 SAING Chan Hang, HEM Socheth and OUCH Chandarany with PHANN Dalis and PON Dorina Responsibility for ideas, facts and opinions presented in this research paper rests solely with the authors. Their opinions and interpretations do not necessarily reflect the views of the Cambodia Development Resource Institute. CDRI F 56, Street 315, Tuol Kork PO Box 622, Phnom Penh, Cambodia ' (+855-23) 881-384/881-701/881-916/883-603 (+855-23) 880-734 E-mail: [email protected] Website: http://www.cdri.org.kh Layout and cover design: OUM Chantha Printed and bound in Cambodia by T & S Printing Phnom Penh ii Foreign Investment in Agriculture in Cambodia Table of Contents Lists of Figures ..........................................................................................................................v Lists of Tables ............................................................................................................................v List of Acronyms ......................................................................................................................vi Preface .....................................................................................................................................vii Acknowledgements ................................................................................................................ viii Executive Summary ..................................................................................................................ix 1. Introduction ..........................................................................................................................1 1.1. Study Objectives ............................................................................................................1 1.2. Methodology ..................................................................................................................1 1.3. Scope and Limitations ....................................................................................................2 2. Role of Agriculture in the National Economy ..................................................................3 2.1. Contribution of Agriculture to the National Output .......................................................3 2.2. Production and Harvested Areas ....................................................................................4 2.3. Foreign Exchange Earnings ...........................................................................................8 2.4. Regional Comparison: Opportunities and Challenges ...................................................8 3. Extent and Nature of Foreign Investment in Agriculture in Cambodia ......................11 3.1. Approved Investment by Sector ...................................................................................11 3.2. FDI in Agriculture by Nationality ................................................................................13 3.3. Sub-sectoral Breakdown of Investment in Agriculture ...............................................14 3.4. FDI in Food Processing ...............................................................................................17 3.5. Engagement of Foreign Investors in ELCs .................................................................18 3.6. Barriers to FDI in Agriculture ......................................................................................21 4. Cambodia’s Investment Policies and Regulations by Sub-sector ..................................23 4.1. Fisheries .......................................................................................................................24 4.2. Forestry ........................................................................................................................25 4.3. Livestock ......................................................................................................................26 4.4. Water Resources and Technology ................................................................................26 4.5. ELCs and Commercial Production ...............................................................................27 4.6. Rice ..............................................................................................................................28 4.7. Rubber ..........................................................................................................................28 5. Preliminary Impact Assessment of FDI in Agriculture ..................................................31 5.1. Crops ...........................................................................................................................32 5.1.1. Sugarcane Plantation in Koh Kong Province .....................................................32 5.1.2. Rubber Plantation in Mondolkiri and Kompong Thom Provinces .....................34 5.1.3. Maize Plantation in Kampong Speu Province ....................................................36 5.2. Forestry in Kratie Province .........................................................................................38 5.3. Overall Assessment .....................................................................................................39 CDRI Working Paper Series No. 60 iii 6. Conclusion ..........................................................................................................................41 7. Policy Recommendation ...................................................................................................43 7.1. Central and Local Government ....................................................................................43 7.2. Private Companies .......................................................................................................44 7.3. Affected Communities .................................................................................................44 7.4. NGOs/Civil society ......................................................................................................44 Appendix 1: Additional Tables ................................................................................................47 Appendix 2: Questionnaire to Examine Barriers to Foreign Investment in Agriculture and Mechanisms for Mitigating and Removing Them ...................................................................57 CDRI Working Paper Series ....................................................................................................60 iv Foreign Investment in Agriculture in Cambodia Lists of Figures Figure 1: Analytical Framework for the Analysis of FDI in Agriculture ...................................2 Figure 2: Cultivated Area and Rice Production, 2004-09 .........................................................5 Figure 3: Main Crop Production, 2002–09 (000 tonne) ............................................................5 Figure 4: Rubber Plantation, Production and Price, 2004–10 ...................................................6 Figure 5: Livestock Production, 2002–09 (000 head) ...............................................................6 Figure 6: Fish Production, 2002–09 (000 tonne) .......................................................................7 Figure 7: Paddy Rice Yield, 2000–09 (tonnes per ha) ...............................................................9 Figure 8: Yield of Key Agricultural Products, 2009 (tonnes per ha) .......................................10 Figure 9: