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Increasing demands for agriculture and agro-industry land

Increasing demands for agriculture and agro-industry land

Cambodia’s development from traditional farming to agro-industry has spurred  a higher-than-expected  demand for land.

Leng Oun, president of Leng Oun Real Estate Group told Post Property that the demand for agricultural land this year increased from 20 to 30 per cent compared to 2011, as a result of local and foreign investment in agricultural and industrial crops across Cambodia. Most of the land was given by the government as economic land concessions to local investors.

“I am optimistic that in 2013 the price of farm land will increase from 10 to 20 per cent because small-scale, local investors will buy land to be kept or to do farming, they don’t worry because they have land left,” Leng said.

He said land prices in three provinces was between US$400 and $500 per hectare, but that most was in state forests with no road access. Land that has road access, namely for timber, can cost from $3,000 to $5,000 per hectare. Land in  Kratie, Kampong Cham, and Battambang ranges from $8,000 to $15,000 per hectare.  

Cheng Kheng, managing director of CPL Cambodia Properties Limited, said the demand for agriculture and industrial land had seen prices rise sharply, but after the government suspended its economic land concessions, land for agriculture and agro-industry development could not be found in large swathes.  

The government began the suspension to ensure  concession land was allocated accurately before new grants are implemented.

“What area is given to agriculture land and what is needed by foreign investors will have to be studied if they are to receive a concession,” he said.

Cheng said the price for agricultural land had increased gradually, while land along national roads ranges from $2,000 to $ 3,000 and from $10,000 to $15,000, according to the quality and size.

Khat Sovann, managing director of Cam Top Real Estate Company, agreed that demand had increased.

He said he had been contacted by Cambodians in the US as well as  other companies looking for land, but as his company focuses on commercial areas of cities, he had not looked into the issue too deeply.  Oknha Phou Puy, president of The Cambodian Rice Millers Association in Battambang, said that buyers and local investors were looking for large areas of land to grow rice but that they were hard to find.

Farmers increase their holdings and aren’t selling to buyers, he said.

Land for farm and agro-industry use has seen sharp increases in price.  In the areas without a water source, prices  are from $1,500 to $2,000 per hectare but in areas with water that allows farmers two harvests a year, land was priced from $10,000 to $12,000 per hectare.

“Now, farmers  don’t sell their land because they can grow high yields of rice, so it is difficult to find large areas of land to cultivate rice, particularly in rice warehouse provinces,” Oknha Phou Puy said.

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