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Agriculture
Last updated: 2013
Trade & Investment Promotion Unit - Royal Embassy of Cambodia - London
Rich in farmland

The Council for the Development of Cambodia (CDC) approved agricultural investment projects worth a combined $499.7 million in the first eight months of 2009, in comparison to $81.7 million worth of projects approved over the same period in 2008.

For investors looking to grow and process crops, Cambodia is an ideal location with plenty of land available for agricultural concessions.
The Cambodian agriculture & agro-industry sector has developed significantly in recent years and has great potential for investment, employment creation and as a source for economic growth.

Qatar and Kuwait have also signed agreements to secure long-term food supplies for their countries. The UAE is also keen to explore opportunities in rice cultivation in Cambodia.

It is unclear exactly what the deals with Qatar and Kuwait are, but Cambodia’s Minister of Foreign Affairs, Hor Namhong, told reporters that a memorandum of understanding had been signed with Kuwait agreeing to finance a $350,000 irrigation project that would cover 130,000 hectares of rice fields.

Cambodia is rich in farmland and hopes to attract more investment to the sector. The country wants to develop its rice exports and therefore welcomes investors, especially those willing to work with small farmers. In return for investments such as credit and technical assistance, farmers would be contracted to sell their crops to the investor.

Rice

During the 1960s, Cambodia produced 500,000 imperial tons of rice in excess of domestic demand. Total paddy production was 2.38 million tons, which represented 1.1 per cent of world paddy production.

As a result of the civil war, Cambodia was left unable to produce enough rice to even feed its own people. Not until 1995 did the country achieve self-sufficiency again.

Today Cambodia has a rice surplus once again and is producing new quality varieties for export. Rice technology has improved significantly over recent years under the guidance of CARDI - Cambodian Agricultural Research Institute.

Just under 7.3 million tonnes were harvested in 2009 despite damage wrought by Typhoon Ketsana, which caused severe flooding at the end of September. Figures released in November 2009 by the National Committee for Disaster Management (NCDM) claim the typhoon caused $140 million in damages.

The Cambodian Centre for Study and Development in Agriculture (CEDAC) is helping Cambodian farmers by advising them how to select the best seeds to increase rice yields.

As a result of improvements in quality, CEDAC – which represents organic rice growers in several provinces in Cambodia – is set to export organic jasmine rice to Germany in 2010 as part of a three-year export agreement totalling 450 tonnes at $1,400 per tonne. In 2009 CEDAC members exported 60 tonnes of organic rice to the US and 15 tonnes to Malaysia.

Meanwhile, the Cambodian Golden Rice for Export Association (CGREA) - an association of 10 rice exporters formed in 2009 - plans to export 20,000 tonnes of jasmine rice to South Africa and France. CGREA says it will spend $5 million to purchase 50,000 tonnes of jasmine rice from farmers in Battambang, Pursat, Banteay Meanchey, Kampong Cham and Takeo provinces. The rice will then be processed locally prior to export.

The association plans to pay farmers a market price of around $0.30 per kg, which it hopes to sell on when processed for around $0.81 per kg.

In 2009, Cambodia exported 8,000 tonnes of milled rice up to August, mainly to Europe, Africa and the rest of Asia. This exceeded 2008 when a total of 5,000 tonnes of milled rice was exported. Total exports in 2009 were predicted to exceed 10,000 tonnes by year end.

Cotton

Seladamex Co., Ltd. has built a $2 million cotton plant in the north-west of Cambodia, in Rottanak Mondul district, Battambang province and began processing cotton in September 2009.

The company is encouraging local farmers to grow cotton by guaranteeing a purchase price of $400 a tonne. They are also providing free cotton seeds to farmers.

With these incentives, combined with the fact that the price of corn and beans has dropped, many farmers have already made the switch.

Until now only 50 hectares of cotton a year had been grown by farmers in western Cambodia. But since the 2009 planting season began in July, 1,200 hectares are now under cultivation and Seladamex expects this figure to grow by around 40 per cent annually over the coming years.

The Seladamex cotton plant is capable of processing 15 tonnes a day and the company hopes to see at least 1,000 tonnes harvested in 2009. Plant capacity is about 5,475 tonnes per year.

Seladamex plans to sell the cotton to buyers in Vietnam, China and South Korea at the international market price of around $1,500 a tonne. The company may also supply another cotton-processing plant in Cambodia located in Kampong Cham province - Cambodia’s only full cotton processing facility.

By the end of 2009 Seladamex expects to have exported 1,000 tonnes of cotton which if successful, will result in Cambodia’s largest contract to export cotton since 1970.

Cotton-growing had almost ground to a halt in Cambodia, killed off by low prices, difficulty in finding buyers, insects, and Pol Pot.

Prior to 1975 the industry thrived with thousands of hectares harvested each year.

Pepper

Cambodia’s big plans for Kampot pepper took a hit in 2009 with sales down significantly. Half of the year’s total output of 14 tonnes remained unsold by year end.

Many peppers sold in Cambodia and worldwide masquerade as Kampot Pepper, but only one is grown in the rich fertile soils of Kampot province. Cambodia is therefore seeking to gain geographic indicator (GI) status for the original product, which producers anticipate will be awarded sometime in 2010.

According to World Trade Organisation (WTO) guidelines, GI strictly regulates every aspect of a product’s properties to assure both its high quality and regional distinctiveness.

With this in mind hopes of a Kampot pepper recovery are imminent, as higher prices for the pepper and an increase in exports are anticipated to follow.

Kampong Speu palm sugar, Kampot durian, Siem Reap prahok (fish paste) and Mondulkiri honey are also targeting GI status.

In 1930 almost all of the pepper consumed in France came from Indochina. Kampot pepper in particular was of exceptional quality and rapidly became ‘the spice of choice for French restaurants’.

However, like almost everything else in Cambodia, war and genocide killed the industry.

Kampot Pepper

In 2007, 3 farmers' associations were established with the support of FarmLink. These associations consist today of more than 70 farmers and are a reliable partner for businesses wishing to purchase high quality Kampot pepper. www.kampotpepper.biz / www.farmlink-cambodia.com. In Europe: www.kampot-pepper.co.uk.

Kurata Pepper

Kurata Pepper was founded in 1997 by Kurata as a partnership with a farmer in Koh Kong province. The company exports its pepper to Japan, France and Denmark. However, despite its exceptional quality, Kurata pepper will not benefit from designation as a GI product because the pepper is not grown in Kampot province. It’s grown 50 miles away in equally fertile soils www.ksline-cambodia.com/www.kuratapepper.com.

Moovers and shakers...

Cambodia's Mong Reththy Group (MRG) and British farming company Lordswood Farms Ltd signed a deal in November 2009 to set up a $27 million joint-venture farm to produce beef, dairy products as well as goat meat and milk. The farm will include an abattoir and a dairy unit. MRG and Lordswood will each hold a 50 per cent stake in the project.

The deal was negotiated by Malcolm Pearce, principal of Lordswood Farms Ltd.

This agreement comes after another successful joint venture by the British pig breeding company ACMC in which 600 genetically-advanced breeding pigs were shipped to Cambodia in 2008 as part of a 20-year franchise agreement. A $5 million self-contained breeding unit was established to supply enough commercial AC1 sows to produce 1.1 million slaughter pigs annually. The project is already reaching its production targets with domestic distribution of 3,000 newly reared pigs due to start in April 2010.

Another agreement has also been signed whereby MRG will import $1 million worth of cattle semen through Lordswood from the United Kingdom for a breeding programme to meet local demand.

English Beef & Lamb Executive (EBLEX) export manager Jean-Pierre Garnier said: “These developments are of great importance for countries that rely almost totally on imports of pork, beef and dairy products. The English livestock sector has shown once again that it can provide a lead in commercial developments in new markets”.

Mong Reththy, president of MRG, said that work would begin early in 2010. The farm will supply the local market to reduce Cambodia's reliance on imports. "Currently, both cow milk and goat milk is 100 per cent imported into Cambodia. The best-quality beef and goat meat is also imported" he said.

The farm will be located on 200 hectares in the Oknha Mong Port Development Zone in Preah Sihanouk province, which is owned by MRG in a joint venture with Thailand's TCCI.

Sen Sovann, deputy secretary general at the Ministry of Agriculture, Forestry and Fisheries in Cambodia in charge of domestic cattle production welcomed the investment but said the climate in Cambodia could make it difficult for the farm to produce high-quality milk. "Of course, milk consumed in Cambodia is 100 per cent imported and good-quality meats are too," he said. "But in hot weather cattle face extra challenges and they need good care and feeding to override the obstacles."

Lordswood Farms Ltd was established in 1975 by one of Britain’s most prominent and innovative dairy farmers, Malcolm Pearce, whose passion for farming developed from a very young age. It is a well established business with a proven track record in innovation and traditional sustainable farming methods; so will be able to bring considerable expertise to the project. It is also home to Europe’s largest herd of Montbeliarde cattle, one of the most highly regarded breeds of dual purpose cattle thriving throughout the world. With their strong physical attributes and excellent milk composition, it was clear that this dual purpose breed was the answer to successful, profitable, and sustainable dairy farming in the UK.

By 1997 Lordswood Farms was one of the largest dairy farms in Britain, producing 17 million litres of milk and processing a total of 65 million litres annually. Lordswood Farms Dairy Processing was later sold to Robert Wisemans Dairies in May 2001, after which time the dedicated team at Lordswood were able to focus their skills to the breeding, development and research of the Montbeliarde breed in both dairy and beef capacities.

Separately, Malcolm Pearce is negotiating other deals for British cattle genetics and expertise in other countries in the region, where Britain has much to offer.

About the author

Henry Lewis is Executive Chairman of British Livestock Genetics Consortium (www.britishlivestockgenetics.com) and President of the British Cattle Breeders Club. Web: www.cattlebreeders.org.uk.

EBLEX

EBLEX is the new Beef and Lamb Sector Company for England. It is a division of the UK Agriculture and Horticulture Development Board (AHDB) which was established in 2008. EBLEX oversees a strategy delivering a wide range of technology transfer, marketing and promotional programmes to farmers, consumers and businesses in the beef and lamb supply chain. www.eblex.org.uk.

CARDI - Cambodian Agricultural Research and Development Institute

CARDI provides agricultural science research and technology services for the agricultural sector encompassing sustainable agriculture, rural poverty alleviation and the economic development of Cambodia. Web: www.cardi.org.kh.

CEDAC - Cambodian Centre for Study and Development in Agriculture

CEDAC is an independent organisation established in 1997 for the purpose of helping Cambodian farmers to grow better crops. Web: www.cedac.org.kh.

National Cambodian Rice Millers Association

Nº. 30, Pasteur (St. 51) Phnom Penh 12210 Cambodia
HP: 012 882 222 HP: 012 454 555

Seladamex

Seladamex Co., Ltd was established in 2007 with the vision to contribute to Cambodia's agriculture industry as well as developing agro-industrialisation. The company has built a $2 million cotton processing plant and plans to sell Cambodian cotton on the international market. The company buys cotton from farmers and also grows its own. It also grows jatropha curcas which is used to make biodiesel. Web: www.seladamex.com.

Golden Rice

Golden Rice (Cambodia) Co., Ltd. is equipped with the latest in modern facilities, including drying machines, processing plants and an automatic packing system, to produce premium quality rice for export. The company was registered with the Cambodian Ministry of Commerce in May 2008 as a private limited company and started milling operations in early 2009. Golden Rice has the capacity to produce up to 50,000 tonnes of rice per year and the company employs more than 100 staff. Golden Rice sent its first shipment of rice to Europe in August 2009. Samples of Cambodian white rice were sent to laboratories in France, Japan and Thailand for quality testing, the results of which indicate that Cambodian rice is among the best in the world. www.goldenricecambodia.com.

Cambodia Food Security and Nutrition

Cambodia’s web-based information system was set up to facilitate the dissemination of best practices and lessons learned, highlight innovative measures, inform users of news and events, and promote open discussion among stakeholders with regard to food security and nutrition issues in Cambodia. The website enables people and organisations interested and involved in food security and nutrition issues both within and outside Cambodia to share information, and to build and preserve a repository of knowledge about food security and nutrition for the long term. Web: www.foodsecurity.gov.kh.

System of Rice Intensification

The System of Rice Intensification (SRI) has been increasingly implemented by farmers in Cambodia since 2000 with support from different stakeholders such as CEDAC, PRASAC, OXFAM, GTZ/RDP, local NGOs and line departments at provincial levels. Web: www.foodsecurity.gov.kh/sri/

Ministry of Agriculture, Forestry and Fisheries

#200 Norodom Blvd, Phnom Penh 12301, Kingdom of Cambodia.
Tel: (855) 23 211 351, 23 211 352.
E-mail: info@maff.gov.kh.
Web: www.maff.gov.kh
The Directorate of Agro-Industries – DAI
Web: www.agrobizcambodia.com

Royal University of Agriculture

Web: www.rua.edu.kh/


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