The government has identified three target provinces in which to develop Agri-Food Industrial Parks, with industry experts urging the elevation of the initiative to special economic zone (SEZ) equivalent status, so as to promote agricultural production in Cambodia.
The Coordinating Committee for the Study and Development of Agri-Food Industrial Parks in Cambodia held its third meeting on April 28, during which three provinces were selected for the establishment of the industrial zones. They are Battambang, Kampong Speu and Kampong Thom.
In attendance at the meeting were representatives from the Ministry of Economy and Finance, agriculture industry associations and private companies. They discussed key findings of value chain and mapping studies, as well as the regulatory challenges of developing such parks in a Cambodian context.
The Agri-Food Industrial Park is an initiative by the Supreme National Economic Council, the finance ministry and the Cambodia-Australia Agricultural Value Chain (CAVAC) programme to help expand export markets for Cambodian agricultural products.
Cambodia Chamber of Commerce (CCC) vice-president Lim Heng, who attended the meeting, offered that the parks must adopt the characteristics of SEZs – especially through establishing regional factories – in order to encourage private sector businesses to invest. Such factories would boost exports, job creation and market access for farmers, he said.
Heng noted that the next phase would be policy formulation and promotion of private sector participation in the development of the parks.
“We will submit the decision to the national level [for the government] to decide in principle before we can establish a policy framework, or any mechanism to encourage the private sector to participate in this work. It is imperative that the private sector be involved, with further discussions to be had on seeking credit from state-owned or partner commercial banks,” he said.
He described Agri-Food Industrial Parks as a likely solution to several longstanding issues that have been plaguing the agricultural sector, including high transport and electricity costs, as well as the illegal import of goods into the country.
Heng noted that government ministries have been accelerating the work to establish the parks, as the expansion of agricultural land in Cambodia has meant the output of agricultural products is increasing by the day.
Centre for Policy Studies (CPS) director Chan Sophal observed that investing in such parks requires significant capital, which means that companies will want to carefully analyse the costs before deciding to invest.
Sophal said that the CPS has been studying closely different types of enterprises’ infrastructural needs within the Agri-Food Industrial Parks, so as to avoid the issue of vacant factories.
“If good quality Agri-Food Industrial Parks are to be built, there must be government support, especially to create low-cost electricity infrastructure. Only if there is something like this – that makes these parks stand out from other such initiatives – will companies be attracted to setting up in the parks,” he said.
According to a Ministry of Agriculture, Forestry and Fisheries report, 4,040,704 tonnes of agricultural goods were produced in Cambodia in the first four months of 2022, a 5.6 per cent year-on-year increase. A total of 3,826,433 tonnes, or 94.7 per cent, were exported, particularly milled rice, paddy, fresh cassava, cassava chips and tapioca starch, which saw significant increases in export volume.