Chapter 2 Cambodia - ERIA

3. Investing in Agriculture3.1. Government Investment in AgricultureIt should be noted that investment in agriculture requires a huge amount of money to get apositive impact. Cambodia has a small annual budget, about half of which is financed by externalassistance. Hence, government investment in agriculture is limited due to budget constraints.Total budget disbursements in 2009 were US$989.5 million, an annual increase of 3.5 percentand equivalent to 9 percent of Gross Domestic Product (GDP). Grant support accounted forapproximately two-thirds of total disbursements. Japan remains the largest single source ofdevelopment assistance, disbursing US$148.4 million in 2009, an 18 percent increase from theprevious year. China provided support of US$114.7 million to the infrastructure sector, whichrepresents 13 percent of total aid and an annual increase of 20 percent.Significant funds continue to be allocated to the social sectors, with the combined share ofhealth, HIV/AIDS, and education support representing more than 30 percent of all assistance in2009. The transportation sector recorded a significant increase, with support rising by 20 percentin 2009 to become the largest aid-supported sector. The agriculture sector also received anannual increase of nearly 60 percent, rising to US$91.2 million or 9.2 percent of the total. Ruraldevelopment got only US$62 million or 6.2 percent of the budget. 4The financial sources for agricultural development are the national budget, foreign assistance,NGOs, and the private sector. Public investment program from 2001 to 2003 allocated foragriculture was US$210 million and investment in the sector, as stated in the Second SocialEconomic Development Plan (SEDP II), was US$500 million. In the Agricultural SectorStrategic Development Plan 2006—10, MAFF proposed the main prioritized programs/projectsby sector and subsector with a budget package of US$153.27 million. 54According to the Aid Effectiveness Report 2010.5 MAFF 2005, 31.87