Market Assessment

An Agricultural Survey, by Clara Peron for Build Cambodia, 2007

    Summary of results
    The major threats to rural development in Cambodia are land speculation, widespread corruption, an uncertain legal environment, climatic conditions, pests and competition from exports. The main constraints are the limited knowledge of farmers and agro-entrepreneurs, the high cost of capital, poor or inexistent infrastructure, inadequate government intervention, highly fragmented supply chains and the absence of affordable energy. These constraints are behind the agricultural sector's lagging growth and the dearth of processing and value adding done domestically.

    Regardless of the development path Cambodia will take, agriculture, which employs 60% of the population, will very likely become more business-oriented than it now is. Save for a handful with strong links to high-ranking government officials, most agro-entrepreneurs are currently struggling to establish themselves. This paper therefore argues for increased support to agro-entrepreneurs by government, banks, the business community and private individuals. The reasons are that (1) investing in agribusiness is a 'safe bet', (2) providing affordable capital to agro-entrepreneurs overcomes current market failures, (3) agribusiness creates strongly needed employment opportunities, and (4) agro-industry is a natural progression from the current state of the economy and therefore requires few restructuring costs.

    Promising current initiatives include organic rice production, the year-round production of fruits and vegetables for high end markets, organic cashew roasting and soymilk production. Future growth in agriculture will likely be driven by the development of local processing through the support of value chains in commodities for which there is a market domestically and internationally. Commodities that have the potential to create significant employment opportunities and positive rural development impacts include coconut, soybean, cattle, fruit trees, peanuts and the development of jatropha-based bio-diesel.