The Phnom Penh Post has been documenting the enormous changes and dramatic growth seen in the Cambodian agricultural sector over the last several decades in terms of productivity, output and exports as it shifts towards a more industrialised and technologically-based approach.

Since the introduction of a key policy document in 2010 that forever transformed the rice-farming landscape, the government, agricultural industry players and other stakeholders have embarked on a wide array of initiatives, with varying degrees of success, in pursuit of game-changing methods, technologies and systems to optimise the use of available resources and achieve the best possible returns.

There has also been a flurry of interest in value-added agriculture, where enterprises process raw agricultural products into finished or semi-finished goods, thereby creating additional selling value.

According to a recent Ministry of Agriculture, Forestry and Fisheries report, the total value added in Cambodia’s agricultural value chains has grown on average by just over four per cent each year from 15.938 trillion riel ($3.909 billion) in 2010 to 22.786 trillion in 2019 prior to the Covid-19 crisis.

From 2010-2019 to Covid

The agricultural sector was among the least hit by Covid-19, emerging as a bright spot that helped support an economy besieged by a series of shocks tied to the pandemic, which had grown at an average of more than seven per cent annually over the previous two decades.

The report noted that despite the Covid-19-linked economic shocks, the sector had managed to grow 0.6 per cent in 2020 and an estimated 1.1 per cent last year, at remarkable rates, all things considered, taking into account that the corresponding figures had been 1.7 per cent and 1.1 per cent in 2017 and 2018.

Broken down by sub-sectors, crops contributed the lion’s share to agricultural production in the 2010-2019 period, at 57-59 per cent, followed by fisheries (22-24 per cent), livestock (over 11 per cent) and forestry (6.7-to-seven per cent).

In the crop sub-sector, paddy production grew at an annual average rate of 3.1 per cent from 8.2 million tonnes in 2010 to 10.8 million tonnes in 2019, before rising roughly one-eighth to 12.21 million tonnes last years. Of that, national paddy surpluses rose from 3.9 million tonnes in 2010 to 5.75 million tonnes in 2019, to 6.9 million tonnes in 2021.

Subsidiary and industrial crop production hit 6.14 million tonnes in 2010 and topped 19 million tonnes last year.

Rubber production passed 42,000 tonnes in 2010 and ratcheted up to 287,000 tonnes in 2019 and over 368,000 tonnes last year, while exports of the natural latex climbed from 42,000 tonnes in 2010 to 366,000 tonnes in 2021.

In the livestock sub-sector, smallholder and commercial production expanded by an average of 5.53 per cent annually in terms of livestock population, from 27 million head worth $1.458 billion in 2010 to more than 45 million head valued at $1.827 billion in 2019, before surpassing 59 million head last year.

In the fisheries sub-sector, production from freshwater and marine capture and aquaculture swelled from 550,000 tonnes in 2010 to 856,000 tonnes in 2021.

Freshwater capture fisheries inched up at an annual average of 1.9 per cent from 405,000 tonnes in 2010 to 479,000 tonnes in 2019, and then to 383,000 tonnes last year.

Marine capture fisheries jumped at a per-annum average of 4.1 per cent from 85,000 tonnes in 2010 to 122,000 tonnes in 2019, and then to 125,000 last year.

Aquaculture production surged at an annual average of 19.9 per cent from 60,000 tonnes in 2010 to 307,000 tonnes in 2019, and then to 348,000 tonnes last year.

In the forestry sub-sector, reforestation efforts restored 4,080sq km of forest cover on state- and privately-owned lands in the 2010-2019 period, and registered forest communities rose from 636 in 2019 to 643 last year.

All not rosy

But along with the progress and advancements highlighted in the report, the agricultural sector faces a variety of challenges that continue to constrain domestic production and exports, especially those related to aquaculture, crop cultivation and markets, affirmed Minister of Agriculture, Forestry and Fisheries Veng Sakhon.

He said agricultural production in the Kingdom falls short of regional countries, which he blamed on sluggish efforts to modernise production systems, a lack of awareness when it comes to farm mechanisation or the appropriate use of inputs, and inadequate means of effectively disseminating modern methods and techniques.

As an example, the goal of exporting one million tonnes of milled rice in 2015, initially proposed by Prime Minister Hun Sen in 2010, was not met, nor has that amount ever been exported in a single calendar year.

And one of the key reasons for the letdown, according to Sakhon, is “because the infrastructure that supports the processing of our agricultural products is more expensive than in neighbouring countries, especially in animal husbandry and crop cultivation.

“Cambodia finds it difficult to compete in terms of market prices because its neighbours spend less on agricultural production than we do, so they can afford to sell at lower prices than us.

“Vietnam puts in more production effort than us, and consumer products such as fertilisers and agrochemicals are self-produced, while we import tonnes in Cambodia, and it’s expensive,” he said.

The minister said that the Kingdom’s exports perform considerably below their potential each year, hampered by transportation hurdles, coupled with the reality that Cambodian products struggle to compete with local goods in neighbouring countries.

Stricter phytosanitary rules in certain markets, such as China, Japan and South Korea, translates to lower profit margins, he said, noting that even exporters of lucrative cash crops such as mangoes and bananas are plagued by a litany of issues when shipping their product to Chinese shores.

Offering a silver lining, Sakhon emphasised that the growing adoption of developed agricultural technologies has reduced manpower requirements, and improved the output and quality of products.

Resilient staple

Rice has long remained a linchpin of economic growth, with annual exports of milled rice consistently in the hundreds of thousands of tonnes over the last several years.

The Kingdom exported 538,396 tonnes in 2015, 542,144 tonnes in 2016, 635,679 tonnes in 2017, 626,225 tonnes in 2018, 620,106 tonnes in 2019, 690,829 tonnes in 2020, and 617,069 tonnes last year.

Cambodia Rice Federation (CRF) secretary-general Lun Yeng noted that the government in 2010 introduced the Policy Document on the Promotion of Paddy Rice Production and Export of Milled Rice, which primarily focuses on investment in irrigation and vital physical infrastructure.

This allowed many Cambodian farmers to make the transition from rain-fed rice cultivation to more self-sufficient models, with some able to take up a third annual crop, as opposed to the typical two, which drove up rice production by nearly one-half between 2010 and 2021, he said.

He underscored that milled-rice exports have progressed in leaps and bounds, reflecting on what a feat crossing the 10,000-tonne mark had been back in 2009, in a country that at one time produced rice solely for domestic food security.

Yeng views the Kingdom as a major player in the rice market, saying that its varieties have won the World’s Best Rice award four times – in 2012, 2013, 2014 and 2018 – and now reach 110 countries and territories.

Ministry data shows that paddy exports jumped by 61.16 per cent from 2020 to reach 3.53 million tonnes last year, or nearly six times the corresponding figure for milled rice. Agence Kampuchea Presse reported that the paddy exports were worth an estimated $846 million, which translates to an average of $0.24 per kilogramme.

CRF statistics indicate that last year’s milled rice exports were worth $418 million, meaning an average of $0.68 per kilogramme. The added value is precisely why the federation aims to ensure that more rice exports are milled, Yeng explained.

Going forward, he said, the CRF will continue to lend a hand to farmers, and motivate them to adopt sustainable agricultural practices for health and safety.

Market issues

The last decade or so has seen many promising developments in the field of horticulture, especially concerning the more profitable cash crops such as longan, cassava, mango, cashew nuts and bananas, said Hun Lak, CEO of Rich Farm Asia Ltd and a major investor in bananas and mangoes.

“Horticulture” is a branch of agriculture that generally deals with the intensive commercial cultivation of high-value plants for food, medicinal ingredients or ornamental purposes. Horticulture farming as a rule sits between domestic gardening and field agriculture, in terms of scale.

Lak shared that these profit crops are similarly confronted with a host of complications apropos cultivation and export, such as climate change and a lack of empty containers at harvest season, as well as restrictive weight rules for vehicles on the road when compared to neighbouring countries.

Additionally, high electricity rates discourage investment in sorely-needed facilities to process, package, sterilise or sanitise products, or provide cold storage, thus compounding the industry’s woes, he said.

He also commented that copycat growers and businesses in horticulture tend to flood markets with excess supply due to a lack of proper market research, which drives down prices. According to Lak, the mango sector is particularly vulnerable to this phenomenon.

He also shared that bananas and cashew nuts were the most stable and least troublesome horticulture crops, explaining that they have wide markets and produce just one crop a year.

By contrast, Yang Saing Koma, a veteran agricultural expert, sees little progress in Cambodia’s agricultural sector, which he says remains constrained due to a lack of markets and capital for farmers that needs to addressed.

The bright spots of change have been fundamentally undermined by, inter alia, significant amounts of debt among farmers, the conversion of agricultural land into plots, and limited research into innovative agricultural techniques, he said.

“However, we have also seen some improvements, the area under cassava and cashew cultivation has increased quite a bit, but there are still market issues,” he added.

The ministry developed the Agricultural Development Policy 2021-2030 to make the agricultural sector more modern, productive, sustainable, competitive, inclusive, climate-resilient; to increase household incomes; and to support the prosperity and wellbeing of Cambodians.

The policy is designed to ensure the availability of high-quality, safe and nutritious food products, and has a particular focus on the sustainable management of land, water bodies, forest resources and fisheries.

To achieve the aforementioned vision and policy objectives, the policy includes four key strategies: modernising and commercialising the agricultural value chain; pushing up public and private investment in the agricultural sector; boosting sustainable growth and increasing resilience to climate change; and institutional reforms and inter-sectoral coordination.

The policy also provides mechanisms for management, monitoring and evaluation, and mobilises financial resources to ensure its effective implementation.