Officials say Vietnamese firms are driving an increase in investment in the rural sector as official figures show soaring approvals of agriculture projects
FOREIGN investment in Cambodia’s agriculture sector has been growing rapidly this year, and government officials are banking on the undeveloped sector continuing to draw funds from offshore.
Ministry of Agriculture, Forestry and Fisheries Secretary of State Kit Seng, who is in charge of planning at the ministry, said Vietnamese companies were driving the expansion and are now growing rubber trees and other crops on “tens of thousands of hectares” across the country, particularly in the east and northeast.
“We believe that investment in the agricultural sector will still continue to grow because it is able to sustain and strengthen business and bring more income,” he said.
For investors looking to grow and process crops, Cambodia was an ideal destination with plenty of land remaining for agricultural concessions, Kit Seng added. “We hope that we can attract more investment to the agricultural sector because Cambodia so far has not had enough investment in the processing industry to process agricultural products for export yet.”
In September, Cambodian officials signed a memorandum of understanding with Vietnamese investors to cooperate on the development of 100,000 hectares of agricultural land in the country.
Under the terms of the memorandum, Agriculture Minister Chan Sarun signed agreements on September 25 granting five Vietnamese companies concessions on 36,491 hectares of land in Kampong Thom, Kratie, Mondulkiri, Preah Vihear and Ratanakkiri provinces to grow rubber trees, cassava and jatropha. The companies were BNA Cam Corp, Mondul Agri Resources, Central First Co, An Mang Yang and Leng Rithy.
Figures released last month by the government’s investment watchdog, the Council for the Development of Cambodia (CDC), show it approved agricultural investment projects worth a combined US$499.7 million in the first eight months of 2009, around six times more than the $81.7 million worth of projects approved over the same period last year.
CDC approval is required for applications for investments worth more than $1 million. Smaller projects can be approved at the provincial level or by the relevant ministry.
Yang Saing Koma, director of the Cambodian Centre for Agricultural Studies and Development, or CEDAC, said investment in the sector would create jobs, but that the government should help more by making it easier for farmers to obtain loans to boost output.
The International Monetary Fund (IMF) predicted last month that the agriculture sector would grow 5 percent this year as the rest of the economy contracts 2.75 percent.