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Cambodia’s plans to modernise its agricultural sector
Despite the impact of covid-19, 2022 has been a rewarding year for the Cambodian agricultural sector with the establishment of new cooperation and investment programmes as well as the organisation of several events with the main theme of modernisation of the sector.
Agriculture is often considered as one of the pillars of the Cambodian economy and still provides a living for a large part of the population.
However, the countryside still suffers from poverty, access to finance remains difficult and production is mainly concentrated on low value-added products.The kingdom is making remarkable efforts to make a real transition to improve economic prospects and alleviate the daily burden on farmers while improving food safety throughout the country.
In this article, we look at this year’s major announcements regarding the modernisation of Cambodia’s agricultural sector
Siem Reap’s Sustainable Agriculture Summit
In February 2022, the Supreme National Economic Council (SNEC) and the Cambodian Agricultural Cooperatives Corporation (CACC) held a Sustainable Agriculture Summit in the second largest town of Cambodia, Siem Reap. The event is part of a series of measures taken this year by various Cambodian institutions to encourage the modernisation of the country’s agricultural sector.
Amongst the points discussed, the importance of investing in the agro-tech ecosystem to grow start-ups working in this field was recalled, as well as the key role that e-commerce solutions will play in the future.
To achieve these objectives, the summit speakers stressed the need for cooperation between the public and private sectors and for systems of cooperation among farmers themselves.
The challenges of modernisation are therefore numerous for Cambodia and intrinsically linked. By changing the model, the country’s countryside will be able to turn to high value-added products, which is more profitable for farmers, but also for businesses and the government. These modernisation plans are also seen as having the potential to end the country’s food safety problems.
The Agricultural development policy
The year 2022 also marked the completion of the draft agricultural development policy for the period 2021-2030 by an inter-ministerial coalition, with resilience, inclusiveness and competitiveness of the sector as key objectives.
As with the Siem Reap summit, these long-term projections aim to ensure the modernisation of the sector through the use of new technologies.
With a clear roadmap, this policy aims to encourage investment to facilitate this transition, which could have a significant impact on the economic situation of farmers as well as on the growth of exports of Cambodian products.
Cambodia-Australia cooperation
Today, one of the main players in the modernisation of agriculture in Cambodia is Australia. The two governments jointly launched the Cambodia-Australia Agricultural Value Chain (CAVAC) programme in 2010, which is still active and continues to boost the Cambodian agricultural sector.
Through this programme, the Australian Department of Trade and Foreign Affairs has recently established an Agri-Food Investment Desk (AFID) in the country, in collaboration with the Council for the Development of Cambodia (CDC) and the Ministry of Agriculture. Through its online platform, AFID can now provide investors with information on Cambodia’s agricultural sector and offer incentives, providing a strategic tool to encourage local and foreign direct investment.
Confident in Cambodia’s ability to transform its agricultural industry with positive results for both countries, Australia is betting big to make this modernisation plan a reality and is presenting itself as the Kingdom’s most successful partner in this area.
Agriculture is the backbone of cambodia’s economy
ACLEDA Bank continues to support Cambodian agricultural sector
ALCEDA, one of Cambodia’s largest banks, has long been a major supporter of the Cambodian agricultural sector. To date, nearly one-third of bank loans to the sector have come from ALCEDA and the bank plans to increase these loans to stimulate innovation and exports.
Well aware of the challenges of modernising the sector, ALCEDA recently organised a networking event for all stakeholders in the agricultural sector to stimulate growth opportunities.
The event called for new ways of financing farmers by facilitating access to bank loans, especially for small businesses, and focused on digitalisation.
Why is it worth investing in agri-food sector in Cambodia?
Preferential 𝗠𝗮𝗿𝗸𝗲𝘁 𝗔𝗰𝗰𝗲𝘀𝘀
Located in the heart of South-East Asia, with preferential free trade access to the world’s fastest-growing markets (ASEAN, China, Korea, RCP, etc)
𝗣𝗿𝗲𝗺𝗶𝘂𝗺 𝗣𝗿𝗼𝗱𝘂𝗰𝘁𝘀
Reliable and consistent supply of high-quality fruits, vegetables, nuts, spices and more on which to build your project’s success.
𝗧𝗵𝗿𝗶𝘃𝗶𝗻𝗴 𝗘𝗰𝗼𝗻𝗼𝗺𝘆
Affordable labour costs, a young workforce, and rapid growth place Cambodia at the centre of the ASEAN region’s dynamic growth.
𝟭𝟬𝟬% 𝗙𝗼𝗿𝗲𝗶𝗴𝗻 𝗢𝘄𝗻𝗲𝗿𝘀𝗵𝗶𝗽
Full foreign ownership of companies in the agrifood sector.
Favourable 𝗧𝗮𝘅 𝗘𝗻𝘃𝗶𝗿𝗼𝗻𝗺𝗲𝗻𝘁
Cambodia is among the region’s most favourable economies for foreign investment with investment incentives specifically tailored to support agrifood business.
𝗦𝗽𝗲𝗰𝗶𝗮𝗹 𝗘𝗰𝗼𝗻𝗼𝗺𝗶𝗰 𝗭𝗼𝗻𝗲𝘀
A new regime for SEZs connecting Cambodian agrifood to markets through land, sea, and air.
Source: Confluences
In conclusion
Cambodia’s agri-food sector has the potential to grow exponentially and is receiving increasing support and attention. With the involvement of major commercial banks and resourceful nations such as Australia, Cambodia’s government institutions can fully engage in this phase of modernisation, which will play a key role in its plan to become a middle-income country by 2030.
To this end, agro-tech is an exciting and promising field that has the potential to change the face of Cambodia’s agricultural countryside, making it sustainable, value-added and competitive. To find out more about setting up and running a business in Cambodia, why not book a consultation with one of our experts.
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