Government experts issued a joint assessment on the agricultural sector in Cambodia, noting that while it has grown significantly in recent years – as reflected by the growth in the total volume of production and exports – the sector still faces significant challenges that need to be addressed.

The joint assessment was made public on November 15 at a meeting presided over by Minister of Economy and Finance Aun Pornmoniroth and Minister of Agriculture, Forestry and Fisheries Veng Sakhon.

The online meeting was intended to review and discuss the drafting of a strategic framework and restoration programme for stimulating Cambodia’s economic growth during the Covid-19 pandemic.

Sakhon said the vision for reforms and the measures taken to restore the agricultural sector highlighted the great untapped potential therein. Further development of the sector would support food security and also help with the absorption of the unemployed.

“The growth of agriculture including production and exports has already contributed significantly to an improvement in people’s livelihoods and our national economic development,” he said.

He added that the government has also introduced various support measures and incentives including financing to drive investment in agriculture as well as agricultural processing.

Sakhon emphasised that the measure had helped Cambodia promote its domestic agricultural products to meet demand and had increased exports of those products.

He said that going forward – in order to stimulate economic growth – the government will focus on addressing structural challenges in the sector to buttress economic growth and create added value over the short term (2021-2023) to help the national socio-economic condition return to normal as soon as possible.

The four priority sectors are the agriculture and agro-industry sector, tourism, garment and non-garment factory industries, he said.

“In the Covid-19 crisis, the agriculture and agro-industry sectors were considered high-potential as demand for food has grown and this sector was not hit. These sectors help ease the burdens and impacts from the other sectors through jobs and income,” he said.

Despite these improvements, he acknowledged that the agricultural sector faced some major challenges that needed to be addressed, including low productivity growth due to a lack of pure crop varieties, inadequate agricultural irrigation systems and less advanced technology.

He noted that a lack of investment in processing had resulted in high production costs – especially for electricity and transportation – exacerbated further by an unstable supply of raw materials, limited agricultural trade and the informal export of agricultural products.

Other problems for the sector that he said should be addressed included a lack of access to low-interest financing, a lack of support infrastructure during and after the harvest and a lack of institutional coordination, both in the planning and implementation stages.

Cambodia Coalition of Farmer Communities president Theng Saroeun said the agricultural sector had grown only for rich traders or large trading companies while family farms were still facing big challenges.

“When the market for their products does not pay them a reasonable price and their costs are rising – like the cost of fuel, gasoline, fertilisers, chemicals and labour – they suffer huge losses on their crops,” he said.

He added that on the one hand, the farmers’ skills in cultivation and packaging were still limited so they cannot meet the market’s demand as small-size farmers but on the other hand the large advanced companies have a lot of capital to invest so it was not a problem for them.

Saroeun continued that in order to solve these problems, the state had to establish a social protection system or use social assistance to help farmers solve their priority problems. The state has to think hard about how to solve the problems with the market, packaging, cultivation and loans for capital.

“[We] have to create a market for communities and encourage farmers to raise these issues when formulating agricultural policies or development plans,” he said.

One possible solution the government is pursuing to address the problems cited by Saroeun is found in the draft Strategic Framework for Restoring and Stimulating Cambodia’s Economic Growth in during Covid-19.

If enacted, the framework will introduce a financing mechanism for the private sector with a budget of approximately $250 million in 2022 for direct credits from the Cambodian Small and Medium Enterprise Bank and the Rural Development Bank for Agriculture with a low interest rate of around five per cent to 5.5 per cent for the key sectors.