TRENDS AND IMPACTS OF FOREIGN INVESTMENT IN DEVELOPING COUNTRY AGRICULTURE

CAMBODIA
Trends and impacts of foreign investment in
developing country agriculture
On the investment regulation of the sector,
no specific rule is set out to promote investment
in this subsector. However, this subsector’s
investment incentives i.e. exemption of taxes
and duties, are set forth in Cambodia investment
law. Investments include fish hatcheries of more
than 2 hectares and shrimp farming and other
aquaculture production greater than 10 hectares.
The sector’s investment procedures also fall under
the procedure highlighted generally above. In
order to develop the subsector, the government
has distributed marine and freshwater fishing
lots to the people for both consumption and
commercial purposes, with the aim of facilitating
fishing operations, sustaining catch sources
and preserving natural resources. Further, given
the increasing demand for fish from the rising
population, the government has encouraged
people to shift their focus from natural catches
to aquaculture. To better manage the resource,
the government is establishing an effective price
mechanism by ensuring proper demarcation of
fishing lots and making the process of fishing lot
bidding more transparent. This will help increase
state revenue from fisheries. Tough measures
are being taken to prevent and crack down on
illegal fishing activities and the encroachment of
flooded forests. Fish farmers and communities
are given technical assistance, credit and market
facilitation to improve their capacity and increase
their revenue. To increase competitiveness and
market access, the government has encouraged
large-scale fishery investments by improving
infrastructure.
4.2 Forestry
Generally, the Forestry Administration (under
MAFF) is in charge of the general governance
of forests and forest resources in Cambodia, in
accordance with the National Forestry Sector
Policy and the Forestry Law (2002). The sector
comes under two levels of management i.e.
central and local government 11 . Prior to 2000,
forest harvesting was rampant, rapid and
11 For the detailed function and structure of Forest
Administration see: http://www.forestry.gov.kh/AboutFA/
MandateEng.html
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widespread. The government’s cancellation
of 40 percent of all forest concessions in the
early 2000s – equivalent to almost half of the
original area under concession – as well as the
its moratorium on logging in concession areas
and log transportation in January 2002, has
significantly reduced rampant logging (World
Bank 2004a:19, 76). Another measure was
introduced to clamp down on illegal natural
forest products export through the introduction
of a subdecree on forest and non-timber forest
products allowed for export and import, dated 20
November 2006. This new rule allows the export
of all kinds of processed and non-processed
timber products derived from man-made forests,
which offers room for private/foreign investors to
engage in the form of economic land concession
(ELC), which is under the governance of the
MAFF (see discussion on ELC in section 4.5). It
should be noted that there is no specific rule to
promote investment in the forest sector.
In addition, the government has put efforts
into forestry reform by establishing forestry
policies, including the law on Concessions,
subdecrees on Economic Land Concessions
and Forestry Concession Management, Forestry
Community formation and other regulations
related to environment preservation, such as the
law on Environmental Protection and Natural
Resource Management and the subdecree on
Environmental Impact Assessment. These aim
to ensure the livelihoods of local communities
improve, as a large number of people in rural
communities depend on forests. With help
from the international community, people are
educated on how to make proper use of and
also protect the forests. In this way, sustainable
development can be achieved and biodiversity
protection guaranteed. Once forests are well
protected, local communities are the ones
who benefit both economically and noneconomically
12 from community forestry, as they
have secured access to land and legal rights
12 Non-economic benefits include spiritual/customary
values (for ethnic minorities) and training, social capital
and networking.