Foreign Investment in Agriculture in Cambodia CDRI Working Paper ...

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viii Foreign Investment in Agriculture in Cambodia Acknowledgements The authors are deeply grateful to the Food and Agriculture Organization of the United Nations (FAO) for providing the financial support through a Japan funded Trust Fund project “Support to study on appropriate policy measures to increase investments in agriculture and to stimulate food production”, which helped make this study possible. Profound gratitude is also extended to our colleagues at the Cambodia Development Resource Institute (CDRI) as well as the many individuals and institutions involved in this study for their kind support and motivation. Special thanks are due to Mr Saifullah Syed, Mr Pascal Liu and Mr Masahiro Miyazako of the FAO for their inputs and comments throughout the research. We are particularly grateful to Mr Khun Kakada, deputy director of the Rubber Development Department, General Directorate of Rubber, and the local communities for sharing their knowledge, giving us valuable in-depth insights into issues related to Economic Land Concessions. The authors would also like to thank our executive director, Mr Larry Strange, and research advisor, Dr Rebecca F. Catalla, for their support and interest in this study. We are also grateful to our research team members, Mrs Pon Dorina for fieldwork coordination and Ms Phann Dalis for data collection and field work assistance. Special gratitude is also extended to our language editor, Ms Susan Watkins, for her patience and constant support. Thanks are also due to the many support staff at CDRI, especially Mr Ung Sirn Lee, director of operations, and Dr Tong Kimsun, programme coordinator of the Economy, Trade, and Regional Cooperation unit. Phnom Penh, June 2012
Executive Summary The noticeable rise in foreign direct investment (FDI) in agricultural land in developing countries in Africa, South and Central Asia and Latin America in recent years has sparked concerns among civil society groups and international organisations as to the potential impacts on poor local communities’ access to resources. Growing interest from foreign investors in agriculture in Cambodia, particularly in agro-industrial crops like rubber, cassava, sugarcane and maize, has likewise raised concern about the potential effects of such investments on community livelihoods, the environment and national food security. Agriculture has traditionally been a steady contributor to the national economy, employing a significant proportion of the rural workforce and generating substantial foreign exchange earnings. Now in its fourth legislature, the Cambodian government is focussing even more strongly on promoting the sector by relaxing taxes related to agricultural products and developing rural infrastructure such as roads and irrigation. New measures have been taken to help people in local communities, including the removal of big fishing lots from private ownership which allows local communities better access to fishery resources without having to fish in deeper waters or further from the riverbank. The government has also undertaken forestry reform to facilitate investment in forestry and crops through the establishment of legislation on concessions, forestry community formation and environmental protection. The Sub-decree on Economic Land Concessions (ELC), adopted in 2005, helps in the granting of land concessions to foreign and local investors to exploit unused and/or infertile land. Laws relating to sanitary and phyto-sanitary issues and animal health have been enacted to control livestock production, prevent losses and contain disease. Through the Ministry of Agriculture, Forestry and Fisheries (MAFF), the government recently prohibited the import of livestock from neighbouring countries to prevent the spread of swine flu and reduce the risk of animal disease pandemics. Meanwhile, the government, with the support of development partners, has provided technical assistance to rural people engaged in rice farming, fisheries (aquaculture) and livestock production. It has also renewed efforts to improve the irrigation system so as to reduce farmers’ dependency on rain, particularly in rice production, and bolster resilience to climate change. As the agriculture sector is one of the main drivers of economic growth in Cambodia, a market mechanism has been set up to promote trade and channel agricultural products to local and international markets. To help the sector become more competitive, soft infrastructure related to rules and regulations, bureaucratic procedures and costs of doing business has been improved. Attracting investment in the energy sector is also deemed important, as the price of electricity in Cambodia is still high compared to other countries in the region. The share of agricultural investment in total investment is small, averaging around 6 percent between 2000 and June 2010, despite the growing interest during this period from investors from countries such as Thailand, China, Vietnam, Korea, Singapore, Japan, Malaysia, Canada, America, India, France, the UK, the USA and Denmark. Investors engage mainly in crops, namely rubber, cassava, maize, sugarcane and cashew nuts, and forestry, such as teak and acacia. The dramatic rise in interest in recent years has triggered concern from various CDRI Working Paper Series No. 60 ix
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Name Carmadeno Venture (Cambodia) P
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Table A2: ELC Land Size and Project
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No. Company Business Provincial add
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No. Company Business Provincial add
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Appendix 2: Questionnaire to Examin
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CDRI Working Paper Series No. 60 59
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22) Chan Sophal & Sarthi Acharya (J
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CDRI - Cambodia’s leading indepen
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