PHOTO TRACEY SHELTON

The agricultural sector has a crucial role to play in poverty alleviation and wider wealth distribution in Cambodia, the World Bank said in an annual report.

World Bank officials have called on Cambodia’s public and private sectors to retrain their sights on agriculture.      

The WB’s annual report, unveiled on January 31 at the Intercontinental Hotel, centered on agriculture for the first time in 25 years.

 

While the economies of China and Vietnam achieved rapid growth through industry and manufacturing, successful agriculture provided the original stimulus for the Asian tigers, said Derek Byerlee, director of the report. He urged Cambodian farmers to branch out from rice toward more lucrative crops if they wanted to follow in their neighbors’ footsteps and capitalize on their country’s vast agricultural potential.

He said the creation of a knowledge database to gather and disseminate information would make farmers more market-savvy.

Yang Saing Koma, president of the Cambodian Center for Study and Development in Agriculture (CEDAC), pointed toward the booming niche market for organic farming and fair trade goods to improve farming revenues.

Cambodia’s robust GDP growth of 10.8 percent in 2006 and 9.5 percent in 2007 was fueled by industry and service sectors.

But while farming has fallen as a contributor to GDP – from 40 percent to 30 percent in the last decade, according to Finance Ministry Secretary of State Hang Chuon Naron – World Bank officials said it holds a singular importance for poverty alleviation and wealth distribution. 

“GDP growth from agriculture can benefit the income of the poor 2-4 times more than GDP growth from non-agriculture,” said WB senior economist Luc Christiaensen

Since the majority of the poor are farmers, agriculture revenues benefit them directly, and agricultural productivity lowers food prices, to which the poor are the most sensitive, he said. 

In Cambodia, it is also simply a matter of demographics, said WB Country Director Nisha Agrawal.

“Eighty percent of Cambodians live in rural areas and 90 percent of the poor live in rural areas, so you can’t reduce poverty in Cambodia without focusing on agriculture,” she said.

The importance of agriculture to preventing rural exodus is magnified in a country with 75 percent of its total labor force absorbed by agriculture, said Finance Secretary of State Naron.

“If rural poverty incidence is not effectively tackled through agricultural and rural development… the rural poor would either migrate to the urban areas and add to the urban stress or resort to the unsustainable exploitation of the already over-exploited and depleted natural resource sector,” he said.

Agrawal said the government and development groups need to stimulate links between farmers and markets as well as encourage a stronger investment climate.

But none of this matters, Byerlee said, without land security. 

“Without secure land titles, there isn’t a strong incentive for farmers to invest in efficient land and water management,” he said.