Cambodia’s dominant agricultural sector will have to step up its efforts to adjust to the country’s accession to the World Trade Organization, and farmers shouldn’t expect too much help from the government, the country’s leading cheerleader for accession said last week.
In a wide-ranging speech broadcast Thursday on Radio Free Asia, Sok Siphana, secretary of state for the Ministry of Commerce, encouraged the production of exportable goods and explained the big picture for the country’s exports in preparation for Cambodia’s accession to the WTO.
Cambodia’s application was approved earlier this month at the WTO meeting in Cancun, Mexico. It is expected to join the organization early next year. During the application process, Sok Siphana was one of the country’s leading WTO advocates.
The main purpose of joining was to open markets, he said. “The vital challenge is to work with farmers and producers [of goods] to increase production and quality in order to find markets.” He also encouraged foreigners to invest in Cambodian land and agriculture.
One of several strategies he mentioned was the creation of “special development areas” which would produce goods designed for export.
With Japan’s collaboration, Cambodia is developing one such zone near the Sihanoukville port to focus on factories. With Thailand, Cambodia is planning three similar zones in Poipet town, Pailin municipality and Koh Kong province, which will focus on manufacturing shoes and processing agricultural goods into exportable products.
Despite these measures, Sok Siphana cautioned that “the state will play a role in preparing national policy, finding markets, but we are not the activists,” as he encouraged farmers to collaborate to improve their products.
With hard work, he said, Cambodian products including rubber, corn, beer, wine and rice could be exported to markets as far away as Europe, “but more effort is required,” he said.
Exports will also benefit, he said, from a 2002 agreement with China that, starting in 2004, will allow 297 separate Cambodian products to be exported tariff-free to the world’s most populous country.
Sok Siphana also outlined his reasons for pushing Cambodia to become the first least-developed country to join the organization.
Because small-scale foreign trade won’t help the country, he said, Cambodia has to increase exports, and therefore open to the global market.
Between 1996 and 2002, garment and shoe exports increased from $50 million to $1 billion. The sector now pays $15 million monthly to its 250,000 employees, he said.
Ros Sokhorn, deputy governor of Kompong Cham’s Memot district, which includes a 5-hectare coffee plantation, said he is happy that Cambodia is joining the WTO. Without a market for coffee and pepper, the prices of these products have declined, he said Monday.
“Since we’re becoming a member of the WTO, I appeal to the government to find overseas markets in which to sell our products,” he said. “In local markets they sell very cheaply; overseas I hope they will sell for more.”
Since 1998, the price of pepper has declined from $5 to 5,000 riel (about $1.25) per kg, and the price of raw coffee beans dropped from 1,000 riel (about $0.25) to 700 riel (about $0.18) per kg in the last year, he said.
Kong Chhouern, deputy director of Kompong Cham’s provincial agriculture department, is less optimistic even though Cambodia has agricultural goods to export. “Since neighboring countries also overproduce crops, those markets won’t absorb our products,” he said Monday. “The prices will continue to decline.”
