1. I. An Overview of Agriculture in Cambodia
More than 70 per cent of Cambodians depend on agriculture for their livelihood. The
sector provides the largest source of income for Cambodians, although its share has decreased
as industry and services expand. Prior to its first national election in 1993, Cambodia was a
closed economy with heavy restrictions on foreign investment. However, over the last two
decades the country has increasingly liberalized its economy, and a part of investment has
flowed to the agriculture sectors. In 2011, the agriculture sector contributed to the country’s
GDP around 32%. (National Institute of Statistics, Ministry of Planning, Cambodia)
The Cambodian government has stated its intention to become one of the leading rice
exporters in Asia in the near future by improving the country’s infrastructure such as,
Electricity—the Government plans to triple Cambodia’s energy output from 808 MW in 2009
to nearly 4 000 MW by 2020 (equal to estimated consumption), and supply 70 percent of the
population with electricity (instead of the current 20 percent). There are 14 hydropower
projects planned, five of which are already under construction. Road—the rehabilitation and
construction of a major national road network is almost completed. At the end of 2008, the
network included 39 618 km of roads. Railways—there are two rail lines: the Northern line
runs between Phnom Penh and Sisophon, Cambodia-Thailand border, for 338 km, and the
Southern line runs between Phnom Penh and Sihanoukville International Port for 264 km.
Ports— Cambodia has three main international ports: Sihanoukville, the main deep-water
seaport on the Gulf of Siam; Phnom Penh on the Mekong River; and Koh Kong near the
border with Thailand. Air Transport—Cambodia’s three main international airports include
Phnom Penh International Airport, capital city, and Siem Reap International Airport, world’s
tourist site and Sihanoukville, the country’s busiest sea route.
1.2 Government Policy Framework
As far as agriculture is concerned, the government of Cambodia has encouraged investment
in the agricultural sector by providing favorable conditions and tax incentives. The
government imposes zero tariffs on imported agriculture materials such as seeds, fertilizers,
pesticide and agricultural equipment. Royal Decree NS/RK/0609/009, dated June 20, 2009,
states that qualified investment projects in the agriculture and agro-industry sector are eligible
for tax holidays of between three and nine years. In addition, the government has planned
further incentives for investment in processing facilities, rice milling for exports and
investment in irrigation.
The Cambodian government’s Rectangular Strategy sets out a long-term vision for growth,
employment and efficiency. With respect to agriculture, the strategy seeks to improve
productivity and diversification (including animal husbandry, food security and nutrition, and

2. rural development); (ii) land reform and de-mining; (iii) fisheries reform; and (iv) forestry
reform (including environment protection and conservation). The government developed a
policy on “Paddy Rice Production and Promotion of Milled Rice Export” in 2010, aiming to
achieve a paddy rice production surplus of 4 million tons and milled rice exports of at least 1
million tons by 2015 by investing in irrigation facilities, encouraging private sector
investment in paddy rice processing and export, and improving procedures for export and
transport facilitation.
1.3 Roles of Private Sector
So far, foreign direct investment (FDI) has played a crucial role in Cambodia’s economy.
According to data from the Council for the Development of Cambodia (CDC), 10 per cent of
foreign investment has gone to agriculture. The increase in foreign investment in agriculture
can be attributed at least in part to the success of the Cambodian government’s efforts to
promote investment in agriculture, namely in rice, rubber and cassava production. Based on
the CDC, between 2000 and June 2010, Cambodian Investment Board (CIB) approved
agriculture investment projects with total fixed assets of US$1.7 billion, of which US$1.3
billion (78.4 percent) was FDI. Crops including rubber and acacia plantations comprised
72.1% of FDI, forestry 14.4 percent and others 13.5 percent. The largest investing countries
in agriculture were Thailand (27.6 percent), China (22.5 percent), Vietnam (18.9 percent),
South Korea (8.3 percent), Singapore (6.1 percent) and India (5.6 percent). For food
processing, CIB approved investment projects with total fixed assets of US$74.7 million
between 2000 and June 2010, of which US$21.5 million (28.7 percent) was FDI. The main
sources of investment were Australia (45.3 percent), Canada (20.1 percent), Singapore (17.8
percent), Vietnam (7.9 percent), Thailand (5.6 percent) and China (3.3 percent) (Cambodia
Development Resource Institute, 2011).
References
o Hem, S. (2013). Foreign Investment in Agriculture in Cambodia: A survey of recent
trends | IISD. [online] Iisd.org. Available at:
https://www.iisd.org/publications/foreign-investment-agriculture-cambodia-survey-
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