AGRICULTURE

Cambodian economy is reliant on agriculture which accounts 44% of GDP and provides direct employment 80% of the labor force. 85 percent of the population live in the rural area. In recent years, the agricultural sector has undergone lots of reforms which have focused on moving state responsibility for production to market based on the agriculture. The introduction of economic reform resulted in the formal abandonment of collectivized agriculture and the redistribution of land based on private holding with the farmers who are given the permanent right to the land use and inheritance.

* Tobacco:

Tobacco production is a critical factor for Cambodia’s economic development and also an important part of a value-added benefit to the national economy. Cambodian farmers increased productivity and higher net returns by using new techniques introduced by British American Tobacco Cambodia. The improvement in the quality of tobacco leaf will provide another benefit to the country by serving to enhance the export potential of Cambodia’s tobacco leaf. Tobacco sector creates approximately 43,260 jobs and generates a value-added contribution of US$ 29.3 million to the Royal Government of Cambodia. The yield of tobacco, under the new strategy of British American Tobacco Cambodia, has greatly increased (yielding 1,103^KGS/ha in 1997, 1,750^KGS/ha in 1998 and 1,950^KGS/ha in 1999). The Royal Government is committed to achieving a high rate of economic growth by way of a market economy. Currently, the government is applying a strategy of working with the private sector as the partner. The growth in the agricultural sector picked up from negative 2% in 1993 to 5.6% in 1995.

TOBACCO LEAF PLANTS OF BRITISH AMERICAN TOBACCO CAMBODIA LTD.  IN KOMPONG CHAM PROVINCE

*  Rice Output Performance:

Production of rice contributes 15 percent of GDP and accounts for nearly 90% of the available cultivated land area. However, the yield of rice remains very low due to the shortage of irrigation [about 1.64 metric tone per hectare, and it will be expected up to 2 metric tones per hectare in 2001, which compares unfavorably with Thailand (2.1 metric tones per hectare), Philippines (2.7 metric tones per hectare) and Vietnam (3.20 metric tones per hectare) and Taiwan (5 metric tones per hectare)].

Currently the cultivated areas in Cambodia are 1,979,458 hectares. Only 16% of total rice area is irrigated and this is limited to water retention in the dry season when the flood recedes and shadow reservoir with limited command area are formed. Site for large irrigation projects are not available and preliminary studies of potential locations have indicated low economic rates of return.

The flooding in Cambodia in 2000 was reportedly the worst in 40 years. According to the reports of Ministry of Agriculture on 21 December 2000, 417,775 hectares of rice field were destroyed (410,044 hectares flood, 5,254 hectares drought, 2,477 insect and 52,268 hectares have already replanted). The total damage in the rice sector is over US$87 millions. The National rice deficit in 2001 will be about 58,705 tones of milled rice. The rice stock will be used up in September 2001. It is expected to solve by the government, World Food Program, NGOs and businessmen. Other crops such as corn, peanuts, soybeans, vegetables, sesame, seeds, sugar cane and cassava… etc. (47,471 hectares) have been destroyed. The total damage was US$8.5 millions or 4% of agriculture output. Over 100 irrigation projects in 16 provinces were damaged and an estimated US$16.7 millions is needed to restore them.

The 2001 new budget has already been approved by the Council of Ministers and was forwarded to the National Assembly for debate and approval by the end of 2000. The budget for agriculture is expected to increase 37% in 2001 to improve the water management, irrigation system and agriculture development. In the period of 5 years (1998-2003) the irrigated areas will be expanded from 16.62% to 20% per year of the total cultivated area or it means that the increasing of irrigated area from 374,603 ha to 450,000 ha within the period of 5 years.

The policy of the second mandate of Royal Government of Cambodia (1998-2003), has firmly stated that the Royal Government will continue its efforts in the implementation of water policy through conservation, rehabilitation and construction of main canal irrigation system and dams, and to construct additional pumping stations and organize the farmer to participate in the operation and maintenance of small scale irrigation systems for a better water resources management.

*  Rubber:

The most important opportunity for developing commercial crop is the rubber. There is scope for increasing the cultivated area from 61,000 hectares to 330,000 hectares. 55,000 MT in 2000 of dry rubber has been exported annually. Privatization of the six states owned plantations is being currently expanded. The Government also encourages the farmers and private sectors to plant the rubbers because the rubber production is also a labor incentive crop.

*  Forestry:

Forests are one of Cambodia’ s few developmentally significant natural resources and the establishment of a policy and administrative framework for the forestry development is a critical challenge facing the Cambodian Government.

In past years, the Government, private sectors, NGOs and the international community have struggled to make progress in Cambodian forestry. On December 31, 1997, the Government imposed bans on exports of unprocessed timber. In the past, imposition of the log export bans has been followed by ad hoc exemptions to allow exports by special interests. These exceptions encourage continued the illegal logging.

In order to carry out the above-mentioned ban, the Ministry of Agriculture-Forestry and Fisheries and the General Headquarters of the Royal Armed Forces were ordered to fully cooperate together to control the illegal logging activities.

* Livestock:

Livestock (mainly cattle and poultry) contributes about 7.5% of GDP or 17% of the agricultural output, the total stock is 3,480,000. During the serious flood in 2000, the total loss of oxen and buffaloes is 2,287 due to the lack of food. In short, the prospects for the livestock do not look good for 2001.

In conclusion: The current main impediments to development of agriculture in Cambodia are as the following:

            1-    The poor irrigation system

            2-    The lack of market information about the needs of farmers, which impede the efficient distribution of fertilizer and other agriculture inputs.

            3-    The concerned ministries have to encourage the private sector or foreign investors to invest on agriculture with incentive requirements as stipulated in the Investment Law of Cambodia.

            4-    The Royal Government has to develop the human resources to train the creative and professional workforces and provide the legal frameworks and regulations of agriculture.