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Agriculture: Cambodia's next frontier

Agriculture: Cambodia's next frontier

A COMBINED effort by the foreign aid banks, major donors and the government is being

made in a bid to lift Cambodia's agricultural production, which is now emerging as

the only strategy capable of preventing the country sliding further into the abyss

of poverty.

They see Cambodia as a country with huge agricultural potential that needs to be

unlocked and encouraged. Agriculture produces 39 percent of the gross national product

and employs 70 percent of the total workforce, even though the majority of farmers

operate subsistence-level systems averaging one hectare of rice.

Among the major obstacles to be dealt with are a conservative traditional farming

culture, widespread corruption in supply chains, lack of an established trading infrastructure,

lack of confidence in investment, cross-border barriers, misuse of large-scale land

concessions; insecurity of land tenure, and cost of energy.

"In the past 10 years the focus has been on self-sufficiency and security in

rice production," says the World Bank's rural sector co-ordinator, Steven Schonberger.

"Agriculture in the future will be a driver of export growth, employment and

business enterprises. It means ensuring that proper market signals are going from

the markets to the growers. It's not about developing the domestic market first.

Cambodia is well positioned in a dynamic part of the world with two demand-driven

buoyant neighboring economies. It has comparative advantages in soil, climate and

water that have not yet been exploited. This is a highly challenging exercise that

has to be tackled on many fronts over a long period."

The World Bank, says Schonberger, is working with the government and other partners

on vulnerability issues for small farmers, emerging market opportunities, and supply

side support (water management, extension technology transfer, farmer co-operatives,

and direct lending).

A "Thematic Working Group on Agriculture and Irrigation", involving representatives

of banks, donors, NGOs and key ministries with an agriculture focus, has been meeting

informally for nearly 12 months identifying strategies and priorities for funding

and minimising duplication and wastage of effort by stakeholders. It will become

formalized when there is an elected government in place.

The Asian Development Bank is investing $300,000 in writing a master plan for agricultural

research, aimed at achieving sustainable growth by strengthening the knowledge base,

which the bank says is particularly weak for crops (other than rice), fisheries,

livestock and forestry.

Masahiro Otsuka, a Manila-based ADB specialist who has written the research plan

proposal, says the Cambodian government created a national policy for agricultural

research and extension in 1998, but it was never adopted.

Asked whether the same could happen again, he said: "The research master plan

is a condition of the second tranche of the ADB's agriculture development loan. This

will give us and the donor community some leverage to ensure government implementation

of the policy."

The Australian Government through AusAid is heavily involved in developing Cambodian

agriculture and is working closely with Ministry of Agriculture, Forestry and Fisheries

on three projects covering research, extension (the dissemination of ideas and solutions

to farmers) and private sector development.

Team leader Terry O'Sullivan says Australia has a vested interest in agriculture

development in Cambodia because it is a world leader in tropical agriculture inputs

and systems.

O'Sullivan sees great potential in maize and soya bean production on the north-west

and north-east upland slopes, for livestock feed. "Look what happened in Thailand:

10 years ago they were exporting maize, now they have so much farmed livestock to

feed that they are importing one million tons of maize a year. Commercial maize crops

are being grown on our uplands but it's all controlled by a huge Thai company. We

want to encourage Cambodian investment in such crops."

O'Sullivan also picks mung beans, sesame oil, peanuts, cashew, cane sugar and beef

as potential winners for Cambodian farmers.

One of the WB's partners is Britain's Department for International Development, which

rural livelihood adviser Chris Price says is focusing on land use planning and fish

farming. "One of the challenges is going to be convincing the donor community

that agriculture in the wider sense is where we all need to move in the future, because

up to now the big money has gone into health, education and government capacity building."

A fundamental building block for agricultural growth and diversification is an accurate,

standardised, simple land use resource database. The first major step towards achieving

this is being planned for around September, when a Land Resources Assessment Forum

is staged by the Ministry of Land Management, financially supported by the German

Government agency GTZ. The forum organising committee met for the first time last

week.

A spokesman for the project, Graeme Hunter, said: "We want to establish principles

and guidelines for assessing the land resource throughout the country. And if we

can set some standards which can be recommended to the Cambodian government for adoption

as policy, then all land use applications will be obliged to follow these standards

so that they are universally understood and implemented."

Land tenure is a different issue but one which is a severe constraint for most farmers;

many land title records were destroyed by the Khmer Rouge and without proof of ownership

farmers are very insecure.

Hunter said: "I don't know the statistics but many farmers do not have secure

title to their land. They have no collateral for borrowing, no security for any investment.

It's not such a problem if growing an annual crop, but to diversify into a perennial

crop such as fruit trees where the returns don't start for three or five years, it

becomes very risky without tenure.

"It's a big problem for the stability and confidence of farming and the development

of more intensive or diverse farming systems. Farming as a business is constrained

by lack of land tenure."

Andrew McNaughton, an independent agri-business consultant, says small-to-medium

business enterprises need to be encouraged as they are the vital link between the

markets and the farms.

"There is very large potential for livestock grown on maize and Australian-bred

cut-and-carry legume fodder. Cattle traditionally have been kept as a sign of wealth

and for draught power, not as a source of supply for beef markets. There is a huge

meat market in this region. We should be looking also at smaller ruminants such as

goats which produce a generation faster than cows."

He is also optimistic about nuts of all types, and bamboo. "We're failing to

add value to raw export crops; the value is added in Thailand and Vietnam. Bamboo

is the equivalent of a sustainable, mature timber crop in three years instead of

30. It's extremely versatile; China is making good-quality women's underwear from

bamboo fibre."

McNaughton is less enthusiastic about fruit and vegetables because Cambodia seems

unable to compete on price with its rivals. "The Vietnamese can deliver fresh

to the Phnom Penh markets cheaper than the locals."

Raine Dixon, Second Secretary at the Australian Embassy, who chairs the thematic

working group, said the untapped potential of agriculture was "enormous, but

what is needed is diversification towards crops for which there are identified markets,

better understanding of land potential, improved quality and productivity, and more

"value-adding".

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