As rocketing food prices induce panic in some parts of the world, experts say the Cambodian agriculture sector could experience an economic windfall if Cambodia expands agricultural production to meet its long-unattained potential.
While tourism is seeing 20 percent growth annually, the agriculture sector grew by about 9.3 percent from 2006 to 2007.
But several experts say that the country could produce at least 50 percent more rice and three to four times more fruit, vegetables and livestock.
However, that would depend on the government making farms more efficient, expanding research, training farmers in new techniques and developing markets for their products. Experts also bemoan the lack of roads and irrigation and say that farmers also need access to loans. More money needs to be spent developing quality seeds, they say.
Agriculture Minister Chan Sarun said the country produces about 6 million tons of rice and exports about 2 million tons a year, but hopes to begin exporting 7 to 8 million tons by 2015.
According to the Ministry of Finance, 78 percent of the nation’s 2.5 million hectares of agricultural land is used for rice, and only 6 percent is used for fruits and vegetables. The remaining 16 percent is planted with grains, rubber and other crops.
Urooj Malik, director of agriculture, environment and natural resources for the Asian Development Bank’s Southeast Asia Department, said there are a number of interlocking obstacles to expanding the agriculture sector.
Farmers often don’t have land titles that would give them the incentive to invest in fruit and vegetable crops, Malik and other experts said.
“Very simply put: The sun, the land, the rain, the workforce, all of this is available,” Malik said.
“It’s an issue of resource use, efficient natural resource use, capacity development, good governance to ensure that investments are efficiently and transparently implemented,” he added.
Ong Luyna, a researcher for the Supreme National Economic Council, said that one of the top priorities of the government is to build roads so construction crews can gain more access to build irrigation infrastructure. Roads also give farmers greater access to markets and improve their chances of getting loans from microfinance institutions, Ong Luyna said.
“We believe that when we build more roads we give a lot of hope to agriculture,” he said. “The potential is there but how to get there is another story.”
Cambodian farmers need more education, better seeds and better technology, Ong Luyna said, noting the success that Vietnam, one of the top rice exporters in the world, has had with agriculture.
Merely crossing from Cambodia to Vietnam and seeing how much more productive farms are indicates how much progress Cambodia can make in the agriculture sector, he added.
Chan Sarun said the key to tapping the potential of Cambodian farms is making water accessible to farmers.
“Right now, we only have 30 percent of the irrigation we need,” Chan Sarun said.
“If we have proper irrigation we will be able to plant two to three times a year,” Chan Sarun said last week.
Malik said Vietnam’s agricultural success did not happen by accident, but was part of a larger economic plan of the Vietnamese government. Chan Sarun’s goal of massively expanding rice and crop production is reasonable, he added.
The Vietnamese “government has deliberately used agriculture as an agent of growth,” he said.
Some $249 million was invested in agriculture by the Cambodian government, donors and private sector in 2007, according to the Ministry of Finance. Even so, government officials admit that more needs to be done.
Andrew McNaughton, agriculture consultant and managing director of Cambodia Biologicals Co, which produces roasted organic cashews, said better farming methods will only go so far to address the problem of developing the agriculture industry.
Cambodian farmers can’t compete with the productivity of Thai and Vietnamese fruit and vegetable farmers, who deliver more goods, more often and at more times of the year, McNaughton said.
Farmers in those countries have cheaper transportation costs because they have more paved roads, he said. They have cheaper fertilizer, pesticides and packing materials because the countries produce these things themselves. All this lowers the price of their produce, he said.
“[Cambodian farmers] can’t meet the demand for quality, price and timeliness…. They can’t do it 365 days a year,” he said. “They can, but under these circumstances, they can’t.”
Part of the solution, McNaughton said, would be for Cambodia to build itself up by creating access to international niche markets, such as organic farming or certification that the food came from small farmers operating under fair-trade practices.
McNaughton said the government needs to attract agri-businesses with low-priced energy, better roads, and more assistance from the financial sector. But all that needs to be done in tandem with improvement in farming methods.
Though the government lists an average rice yield of 2.5 tons from one hectare of land each year, it’s common for one hectare of land to produce just one ton of rice per year, said Sam Vitue, training director for the Cambodian Center for Study and Development in Agriculture, or Cedac.
In Vietnam, where more technologically advanced methods of farming are used and there is better irrigation, one hectare of land produces 4 or 5 tons of rice annually, he said.
Eighty-five percent of Cambodians are involved in farming, Sam Vitue said, but around 50 percent of farmers work on one hectare or less of land, and only 20 percent produce more rice than they eat.
Depending on the irrigation and soil type, farms could grow as many as three crops per year on their land – including beans, corn, cucumbers, watermelons, cassava and bell peppers, to name a few, Sam Vitue said.
Studies show that land ownership gives farmers the incentive to invest in their farms, borrowing money to purchase equipment and materials because they have confidence that they won’t be removed from their land, said economist Chan Sophal
But the lack of land titles in Cambodia inhibits farmers’ ability to secure loans.
Without the collateral of land titles, many banks won’t offer loans to farmers, which means they can’t invest in irrigation systems to produce cash crops, Chan Sophal said. Another obstacle to growth is the booming real estate market, he said.
“In the past three years, land prices have been rising; so anyone who buys and sells land makes a lot of money” while investing in agriculture takes more time, he said.
Some businesses have obtained large land concessions but are not using it for agriculture production, merely for land speculation, he added.
The government, which has rescinded some agriculture concessions, needs to review them more often, Chan Sophal said.
And while some 2.5 million hectares of farmland exist, the potential is there for 3 million hectares if former forestland and other unused land is turned over to farming, Cedac’s Sam Vitue said.
And as demand for food is not likely to decrease, there is the potential for the agriculture sector to earn the country billions.
“The world demand [for food] is huge,” Chan Sophal said. “The price will still be high, but that is good for our producers. We can export and earn a lot of money.”
(Additional reporting by Prak Chan Thul and Chhorn Chansy)