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Cambodia Agriculture in Transition: Opportunities and Risks
Cambodia Agriculture in Transition: Opportunities and Risks
Cambodia Agriculture in Transition: Opportunities and Risks
Cambodia Agriculture in Transition: Opportunities and Risks
Cambodia Agriculture in Transition: Opportunities and Risks
Cambodia Agriculture in Transition: Opportunities and Risks
Cambodia Agriculture in Transition: Opportunities and Risks
Cambodia Agriculture in Transition: Opportunities and Risks
Cambodia Agriculture in Transition: Opportunities and Risks
Cambodia Agriculture in Transition: Opportunities and Risks
Cambodia Agriculture in Transition: Opportunities and Risks
Cambodia Agriculture in Transition: Opportunities and Risks
Cambodia Agriculture in Transition: Opportunities and Risks
Cambodia Agriculture in Transition: Opportunities and Risks
Cambodia Agriculture in Transition: Opportunities and Risks
Cambodia Agriculture in Transition: Opportunities and Risks
Cambodia Agriculture in Transition: Opportunities and Risks
Cambodia Agriculture in Transition: Opportunities and Risks
Cambodia Agriculture in Transition: Opportunities and Risks
Cambodia Agriculture in Transition: Opportunities and Risks
Cambodia Agriculture in Transition: Opportunities and Risks
Cambodia Agriculture in Transition: Opportunities and Risks
Cambodia Agriculture in Transition: Opportunities and Risks
Cambodia Agriculture in Transition: Opportunities and Risks
Cambodia Agriculture in Transition: Opportunities and Risks
Cambodia Agriculture in Transition: Opportunities and Risks
Cambodia Agriculture in Transition: Opportunities and Risks
Cambodia Agriculture in Transition: Opportunities and Risks
Cambodia Agriculture in Transition: Opportunities and Risks
Cambodia Agriculture in Transition: Opportunities and Risks
Cambodia Agriculture in Transition: Opportunities and Risks
Cambodia Agriculture in Transition: Opportunities and Risks
Cambodia Agriculture in Transition: Opportunities and Risks
Cambodia Agriculture in Transition: Opportunities and Risks
Cambodia Agriculture in Transition: Opportunities and Risks
Cambodia Agriculture in Transition: Opportunities and Risks
Cambodia Agriculture in Transition: Opportunities and Risks
Cambodia Agriculture in Transition: Opportunities and Risks
Cambodia Agriculture in Transition: Opportunities and Risks
Cambodia Agriculture in Transition: Opportunities and Risks
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Cambodia Agriculture in Transition: Opportunities and Risks

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Presentation for the Stakeholders Consultation Workshop on "Cambodia Agriculture in Transition: Opportunities and Risks"; given on September 18, 2013 in Phnom Penh, Cambodia

Presentation for the Stakeholders Consultation Workshop on "Cambodia Agriculture in Transition: Opportunities and Risks"; given on September 18, 2013 in Phnom Penh, Cambodia

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  • 1. Cambodia Agriculture in Transition: Opportunities and Risks Stakeholders Consultation September 18, 2013 Himawari Hotel, Phnom Penh
  • 2. Outline 1. Background 2. Agricultural Transformation 3. Major Changes in Cambodia Agriculture over the past 10 Years 4. Drivers of Change 5. Opportunities and Risks 6. Diagnostic Study Objectives and Methodology 7. Key Questions for Today’s Consultation
  • 3. BACKGROUND
  • 4. - 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 8,000,000 9,000,000 10,000,000 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Rice Production (mt) 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 1994 1997 2000 2004 2007 2010 Poverty Rate in Cambodia 0 10 20 30 40 50 60 Underweigth Stunted (short) Wasted (thin) Nutritional Indicators (from CDHS) 2000 2005 2008 2010 Processor 35% Input Suppliers 9% Machinery Sellers 6% Crop Collectors 45% Rice Sellers 5% 2011 Share of Turnover by Types of Agribusiness Processor Input Suppliers Machinery Sellers Crop Collectors Rice Sellers
  • 5. The Good, ….  An impressive growth of agriculture over the past 10 years o Agricultural GDP annual growth rate at 4.6% over 2001-2011, one of the highest in the world  A steep decline in poverty o More than 1% decline per year in poverty rate  Increasing connectivity o Cambodia has a population of about 14.6 million, and 19 million mobile phone subscribers in 2012  Major surpluses in agricultural production o Rice, Maize, Cassava, Cashews, Rubber o But deficit in vegetables, pork, oil
  • 6. The Bad, …  An underdeveloped processing Industry o Most commodities (paddy, cashews, cassava, maize, cattle, soya beans, …) are exported in raw form  An agriculture which is mostly rainfed o Irrigation coverage only 24% of cultivated areas  An agribusiness sector mostly consisting of traders and informal businesses o Less than half of the agroenterprises have some degree of formality (eg registration)
  • 7. And the Ugly  Still high levels of malnutrition o Malnutrition of children under 5 still too high  Poor levels of food safety o Lack of standards and standards enforcement  Unsustainable Practices o Cassava production and deforestation o Degrading soil fertility o Indiscriminate use of plant protection chemicals
  • 8. Questions  Can past growth be sustained? or even accelerated?  Can poverty be reduced faster?  Can malnutrition be reduced faster?  Can value added in agriculture be increased faster?
  • 9. AGRICULTURAL TRANSFORMATION
  • 10. Agricultural Transformation 1. Agriculture becomes less important  As a share of Labor  As a share of GDP 2. Agriculture becomes more productive  In terms of higher agricultural labor income  In terms of higher GDP 3. Society’s perception of farming changes  From a way of living, unattractive and full of drudgery  To a honorable professional activity
  • 11. % Agriculture Labor Force 0% 100% 20% 40% 60% 80% LOW HIGH % Agriculture in GDP Poor RichPer Capita Income TotalValue Value of Agricultural Output per Worker in Agriculture Total Value of Agricultural GDP
  • 12. The Challenges of Agricultural Transformation  Growing rural – urban gaps  Youth exodus from rural areas  Increasingly vocal farmer organizations  Adoption of technology innovations  Land consolidation  Corporate agribusiness sector and SMEs  …
  • 13. The Link between Rural non-Farm and Agriculture  Strong Agricultural Growth strong growth of Rural Non Farm Economy (RNFE).  Rural non-farm activities improve food security by diversifying income sources and improving the ability to cope with shocks  Rural non-farm activities generate employment for the poor  Employment growth in the rural non-farm sector is typically faster than in the rural farm sector
  • 14. CHANGES IN AGRICULTURE OVER PAST 10 YEARS
  • 15. Internal and External Changes Internal 1. Productivity 2. Rice Milling 3. Labor 4. Land 5. Connectivity External 1. Food prices 2. Cross-border trade 3. New Entries
  • 16. Internal Changes 1. Productivity improvements  Changes in cropping patterns during the wet season (early, medium, late)  Adoption of new improved varieties and improved seeds  Irrigation investment  Intensification in use of inputs and mechanization 2. Expansion of the rice milling industry  Paddy and Rice Export Policy  Domestic investment and FDI  Federation of Rice Millers and Cambodia Rice Exports Associations  Information about Exports  Programs and projects (EU/IFC, ADB, AusAID, IFAD, AFD, USAID, FAO)
  • 17. 0% 10% 20% 30% 40% 50% 60% 70% 80% Rice Maize Cassava Sugarcane Yield Increase (2003-2012) 0 50,000 100,000 150,000 200,000 250,000 2009 2010 2011 2012 Rice Exports (mt) % 5% 10% 15% 20% 25% 30% Landless 0.01-0.50ha 0.51-1.00ha 1.01-1.50ha 1.51-2.00ha > 2.00ha 2004 2011 • Less Landless • More fragmentation at low size • More consolidation at high size
  • 18. Internal Changes (continued) 3. Labor  Increasing scarcity of labor due to internal and external migration  Scarcity of skilled labor  Increasing cost of labor in rural areas (twice if compared to 10 year ago)  Mechanization as a response to scarcity and cost 4. Land  Preliminary data indicate both fragmentation and consolidation 5. Infrastructure and Connectivity  GMS initiatives in regional connectivity (East-West and North-South corridors)  Railway and port infrastructure improvement  Major dams and hydroelectric plants under construction
  • 19. 100 110 120 130 140 150 160 170 180 2007 2008 2009 2010 2011 2012 CPI and Food Price Index (2006=100) CPI Food
  • 20. External Changes 6. Food Prices  Food crisis has been an opportunity for Cambodia’s farmers  Likely to remain high  Emergency Reserves and Disaster Preparation 7. Increasing cross-border trade  Informal exports of paddy, cashew nuts, maize, sesame seeds, soya beans, cassava  Imports of vegetables, livestock, inputs and machinery  Each citizen in CAM exporting 1 ton of agricultural products 8. New entries in the world and regional rice market  Myanmar high potential for food supply and benefits from EBA  India a source of world food markets instability  Vietnam starting fragrant rice  Thailand losing competitiveness
  • 21. DRIVERS OF CHANGE
  • 22. Drivers of Change Policy Investment Technology External Factors • Relatively liberal laissez faire • Regional integration and access to regional markets • Rice Policy • Public expenditures on agriculture, irrigation, R&D, and rural development • Infrastructure (transport) • Private sector • Adoption of improved technology by farmers • Mechanization • Modern inputs (seed, chemicals) • Higher food prices
  • 23. OPPORTUNITIES AND RISKS
  • 24. Opportunities  Cambodia becoming a reliable global supplier of safe and quality food and products (eg rice, maize, fish, cattle, pepper, rubber, cashews, cassava, fruit)  A dynamic Cambodian agribusiness sector creating value added and employment in a growing and well-connected rural non-farm economy.  A food and nutritionally secure population with access to a healthy and diversified diet.
  • 25. Risks  Business environment not conducive to Agrifood investment and to the emergence of a dynamic formal agribusiness sector  Low volumes and efficiency of public investment in agriculture  Rate of innovation adoption slowing down  Environmental Sustainability at danger (eg. cassava and deforestation, loss of soil fertility and biodiversity as a result of poorly designed hydro dams)  Vulnerability to highly variable and extreme climatic events  Highly variable global markets (food, feed and biofuels)
  • 26. Need for New Drivers of Change? 1. More favorable business environment for private sector investment in agrifood sector 2. Public private partnerships and innovation 3. Improved human resources and capacity of farmers and value chain actors 4. Service providers to meet the need of commercial farmers 5. Operationalization of inclusive growth and regional development 6. Establish new strategic national programmes (beyond rice) 7. National programs on food safety and nutrition 8. National programs on competitiveness 9. National programs on risk preparation
  • 27. DIAGNOSTIC STUDY OBJECTIVES AND METHODOLOGY
  • 28. Objectives of the Diagnostic Study  Provide analytical inputs, improved information basis, and evidence- based recommendations for more competitive and sustainable farming systems in Cambodia. Specifically: (i) Provide inputs for the preparation of the road map for the Ministry of Agriculture, Forestry and Fisheries (MAFF) and Supreme National Economic Council (SNEC) for the implementation of the long-term strategic agriculture sector goals of the Cambodia Vision 2030 and Rectangular Strategy; and (ii) Provide diagnostics for the preparation of the Government or donor funded investments programs which would support implementation of the above strategies and required institutional development support.
  • 29. Phasing of the Diagnostic Study  Phase I – Structural Changes in Agriculture over past 10 years  Financial and economic analysis of farming systems  Interpret the broader economic context and provide deeper assessment of current policy environment.  Phase II - Forward looking scenarios for future agriculture growth pathways  Based on expected changes in consumer demand, trade patterns and implications of climate change, and deeper analysis of dynamics between agriculture and non-agriculture sectors.
  • 30. Methodology of the Diagnostic Study Farm Enterprise Models Policy Simulations Sector Performance ROADMAP
  • 31. Survey Three Types of Respondents 1. Key Informants (at Provincial, District, and Commune Level) 2. Focus Groups at the Commune Level 3. Individual Farmers Three Types of Survey Tools 1. Key informant checklist 2. Focus Group Discussion checklist 3. Individual Questionnaire
  • 32. Four Commodities 1. Rice 2. Maize 3. Cassava 4. Vegetable
  • 33. Commodities Commodity Growth (2003-2012) Key Changes Rationale Rice • Production (7.8%) • Yield (4.5%) • Adoption new varieties • Mechanization • Rice Milling Industry growing • Higher prices internationally • Food security • Large income and employment impact • High export potential • High impact on processing industry Maize • Production (13.1%) • Yield (3.0%) • Adoption of hybrids • Integration with feed industry • Potential for export Cassava • Production (41.7%) • Yield (6.4%) • Use of upland and forestland • Integration with starch and feed industry • Integration with biofuel • High export potential Vegetables • Production (12.8%) • Yield (7.8%) • Rapidly increasing demand and imports • Nutrition and food safety • Import substitution
  • 34. Zones, Provinces, Districts, Communes  3 Zones  6 Provinces  12 Districts  12 Communes  Chosen among the ones we visited 10 years ago for the Agrarian Structure Study
  • 35. Locations of the SurveyZone (3) Province (6) District (12) Crop (4) Commune (12) Mekong Kampong Cham Memot Maize / Cassava Dar / Memot Srey Snathor Rice Prey Poh / Prek Damboke Kandal Sa Ang Vegetable / Maize / Rice Prek Ambel Kandal Stoeng Rice / Vegetable Siem Reap Takeo Batti Rice / Vegetable Champei Tram Kok Rice / Vegetable Tram Kak Coastal Kampot Chhouk Rice / Vegetable Meanchey / Trapeang Phleang Kampong Bay Rice / Vegetable Traey Koh / Andong Khmer Tonle Sap Battambang Ek Phnom Rice / Vegetable Prek Khpop / Prek Norin Banan Rice / Cassava / Maize Kanty 2 / Chheuteal Bantey Meanchey Malai Maize / Cassava Ou Sampou Mongkol Borei Rice Rohat Touk
  • 36. KEY QUESTIONS FOR TODAY
  • 37. Key Questions 1. What are the most significant changes in Cambodia agriculture over the past 5-10 years? 2. What have been the driving forces beyond these changes? 3. What do we need to sustain or even increase past growth? 4. What suggestions do we have for the study team proposed methodology?
  • 38. Notes for the Discussion
  • 39. Changes Drivers of Change Sustaining the Change Methodology Internal 1.Productivity 2.Rice Milling 3.Labor 4.Land 5.Connectivity External 1.Food prices 2.Cross-border trade 3.New Entries 1. Policy 2. Investment 3. Technology 4. External Factors 1.More favorable business environment 2. PPP and innovation 3.Improved HR and capacity of farmers and value chain actors 4.Service providers to meet the need of commercial farmers 5.Operationalization of inclusive growth and regional development 6.New strategic national programmes 1. Four commodities (rice, cassava, maize, vegetables) 2. Three types of respondents (experts, fgd, farmers) 3. Three regions 4. Six Provinces 5. Compare with study conducted in the same communes 10 years ago

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