Tag - Agriculture

Seeing Green

Rice farming in Cambodia

Rice farming in Cambodia / Image via Wikipedia

Agriculture contributed around a third of Cambodia’s national GDP in 2009, according to Council for the Development of Cambodia statistics. But to maximise the fruits of this sector, the Kingdom’s government is working on commercialising agriculture to increase national income and create more jobs for Cambodians.

San Vanty, undersecretary of state of the Ministry of Agriculture, Forestry and Fisheries, said while Cambodia exports many agricultural products, rice is the highest priority. It has been acknowledged by many, including Prime Minister Hun Sen, as Cambodia’s “white gold.”

Before 2007, Cambodia exported unprocessed paddy rice to Thailand and Vietnam for processing, following which those countries exported the finished product overseas. According to San Vanty, this is all changing with the entry of processing machine into the Kingdom. Now Cambodia can export milled rice overseas. Recent deals discussed in June with the Philippines to export 200,000 tonnes of rice and orders worth nearly US$1 million with four European nations later this month are showing the rise of the sector’s commercialisation.

“Importing rice processing machines has been very beneficial because now we have both the rice and rice husks in Cambodia, so that besides gaining more income from exporting higher-quality processed rice, we can use the rice husk as fertiliser for the rice field,” he said.

He added that as a result of the rise in the processing industry Cambodians will get more jobs because of a need for machine operators.

San Vanty, however, also dismissed fears that the small and medium companies would suffer without the modern processing machine.

“It’s impossible that they will go bankrupt because these companies can continue selling their product in the local market, while the product from modern machines will be used for exporting to foreign countries, since these products meet the international standard.”

With the new machines allowing Cambodian rice to now meet international standards, the government is actively involved in finding places where Cambodian rice product can be exported.

“Business agreements between countries are very important,” said Kong Putheara, director of the Department of Trade Statistics and Information at the Ministry of Commerce. “We can negotiate with our partner countries to reduce the cost of the import tax imposed.”

Kong Putheara explained that though countries can export products to other countries without signing business agreements, they usually cannot negotiate the import tax. “If the tax price is high, then this added to the transportation costs, meaning we cannot compete with the local products.”

The other main benefit of developing agro-business is technical support. “If we aren’t able to produce a qualified product, we can ask country in the business agreement to send technical experts to help us in production,” said Kong Putheara.

As the government invests in agriculture, particularly in infrastructures such as watering and irrigation systems, reservoirs and dams, the knock on effect is felt in the rural banks, which have the confidence to distribute more loans to rural farmers helping development.

ACLEDA Bank Plc, with over 1,695 branches and offices throughout Cambodia, particularly targets rural industry and has seen a boom in agricultural loans.

“I note that the agricultural loans used to be less than 4 percent in the banking sector in 2007, and in 2009 it has increased to 6.7 percent,” said In Channy, president and CEO of ACLEDA.

He said that ACLEDA had seen its agriculture and agricultural-related loans surge from US$14.76 million in 2005 to US$92.17 million by June 2010.

“Look at 2009 figures, Garment export was down by 27 percent and the tourism sector was also down by 3 percent. However, the surplus of rice was more than 3 million tonnes – that’s a huge surplus,” In Channy said. “I think without the input from the growth of agriculture and its exports, the GDP of 2009 would be in the red already.”

As the agricultural sector is being developed, people working in recruitment agencies are optimistic about job opportunities in agro-business in the future.

“There will be more jobs for Cambodians,” said Vat Sreyvoat, a senior recruitment consultant at Great Alliances employment agency.

“More and more foreign investors will come to invest in Cambodia when the agricultural sector is being developed, and the job opportunities will come to Cambodians, as foreign companies will want to hire Cambodians,” she added.

Sandra D’Amico, managing director at HR Inc Cambodia, another recruitment agency, agreed that agricultural commercialisation will no doubt create numerous jobs across the country as investors look to localise foreign management as soon as possible to be competitive. She also predicted that the rise in agro-business would create opportunities for young Cambodians, those in the provinces, and help the growth of certain skills markets.

“Young entrepreneurs wanting to capture a part of the local market are likely to pop up and bring a new face to agro-business in Cambodia,” she said. “The need for standards, health and hygiene measures, good business management and planning, financing, as well as information dissemination from government and interested stakeholders, is going to be key to making the small- and medium-enterprise sector successful in their quest to share in this dynamic market.”

D’Amico added that the agricultural industry would bring jobs to provinces, as rise of agro-business would mean an emphasis on the countryside and that the young would not have to migrate to the cities.

by: Dara Saoyuth and Daniel Pordes

This article was published on Lift, Issue 28, July 21, 2010

Observations from the Field

Four students from RUA (the Royal University of Agriculture) tell Lift why they chose to study agriculture and give us their thoughts on what needs to be done to improve the sector.

Group photo of 4 RUA students who join our discussion / by: Koam Tivea

Group photo of 4 RUA students who join our discussion / by: Koam Tivea

DISCUSSION

Why did you choose to study agriculture? What do you plan to do when you get out?

On Seyha, a student from Royal University of Agriculture (RUA) major in Agronomy / by: Koam Tivea

On Seyha, a student from Royal University of Agriculture (RUA) major in Agronomy / by: Koam Tivea

Dara: I decided to study agriculture because I saw the possibilities within the job market in Cambodia’s agriculture sector. Because of the size of the industry, agriculture offers more opportunities than majors like accounting, business and economics.

Moeung Bophayanika, a student from RUA major in Agronomy / by: Dara Saoyuth

Moeung Bophayanika, a student from RUA major in Agronomy / by: Dara Saoyuth

Seyha: I chose to study agriculture because my parents are farmers. I can apply what I’ve learned in school to the real world by working with farmers through companies or organisations that focus on agriculture. I can introduce new techniques to the farmers living in rural areas, who are still using traditional techniques, and help them improve their lives by producing a higher-quality grain. If agriculture doesn’t develop, the county won’t develop either.

Rem Chandara, a student from RUA major in Agronomy / by: Koam Tivea

Rem Chandara, a student from RUA major in Agronomy / by: Koam Tivea

Do you think that you can get a good job with good pay when you graduate? What sort of job do you want to get?
Seyha: Most students graduating from RUA, especially in rural development, are working for NGOs. Students who study agronomy can work for companies such as those owned by Mong Reththy and Ly Yong Phat.

Tha Sokunthear, a student from RUA major in Agricultural Economic and Rural Development / by: Koam Tivea

Tha Sokunthear, a student from RUA major in Agricultural Economic and Rural Development / by: Koam Tivea

Nika: We can also work in the government or, for those who like teaching, they can work in the University of Agriculture.
Dara: If students have relatives or friends who can help them find jobs with the government, they will be able to get the high pay and a high position. However, when working with the government, we don’t work directly with the people like we would with an NGO.

What changes need to be made within Cambodia’s agriculture sector to improve it?

Dara: The first change should start with the farmers themselves. It’s their responsibility to improve themselves. They should not just wait for another person to help them. They need to learn the techniques from the good farmers around them.
Seyha: Firstly, we have to improve equipment like irrigation systems. Then farmers won’t have to spend money on pumping water into their fields. Secondly, farmers often don’t know how to find a market for their goods because there is a middleman who buys their products and sells them at the market. The farmers gets a bad price while the middleman takes a hefty portion of the profits. I want people to form communities, and when they buy something, buy it together. For example, if a village wants to buy 50 bags of fertiliser, they can do it together and save time and money. They can also sell their products together so the buyers cannot pay them a low price. The third thing we need is more processing companies in our country. That way we can transform our goods from raw materials to finished products, which we can export to foreign countries for more money.

Many organisations say farmers are resistant to changing their methods. What are the difficulties and what did you do to convince these people that the new practice is the best?
Dara: If we just go to the farmers and tell them to change they have no reason to believe us. We need to set up a demonstration plot to show farmers or choose a model farmer who wants to improve his or her techniques. When it proves that it is the best technique and beneficial to their production, other farmers will start to follow.

Do you think that cash crops such as rubber and cassava are a good choice for the use of Cambodian land?
Dara: I think for businesspeople, they don’t think about how to use soil sustainably. They think that rubber is planted for business and sale, but they don’t think of how the soil will be ruined. When we plant only one kind of crop, it will take out all of the nutrients.
Nika: Many companies are growing cassava, which takes a lot of nutrients from the land and doesn’t give any back so the soil will be destroyed one day.

Do you think that there will be problems with many people growing commercial crops and not enough food crops?
Dara: I think there will be problems with more people growing commercial crops to get power.
Nika: Commercial crops are usually grown on concession land in places like Kratie, Mondulkiri and Ratanakkiri, while food crops are mostly grown in Battambang, Pursat and Takeo. Therefore, I don’t think it causes problems.
Dara: However, now that rubber from Vietnam has been introduced and can be grown in any kinds of soil it will likely impact the food security in Cambodia.

Do you know what the value chain is? Do you know that many times rice has been sent to Vietnam and Thailand, who return it to Cambodia for sale after it has been processed? I want to know what you think of processing in Cambodia.
Dara: I think the government is paying more attention to investment. I believe that in the future Cambodia will improve since there are more and more investments in the Kingdom. Moreover, many students have had a chance to study abroad, so that they can bring knowledge of processing to Cambodia. With this, Cambodia will be able to process more of its agriculture products on its own.

by: Dara Saoyuth and Koam Tivea

This article was published on Lift, Issue 28, July 21, 2010