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

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Role of Agriculture in the National Economy
Despite a significant reduction in the share of agriculture in total national output during
the past two decades, from around 46 percent in 1993 down to about 28 percent in 2009 (MEF
2010), the sector remains one of the key growth-enhancing pillars as well as a poverty-reducing
tool. This is because around 85 percent of the total population live in rural areas, the majority
of whom rely on agriculture (mainly paddy rice) as their primary income and livelihood source.
As outlined in the government’s Rectangular Strategy Phase I and Phase II and the National
Strategic Development Plan (NSDP) 2006–10 and the NSDP Update 2009–13 in pursuit of
growth, employment, equity and efficiency, agriculture ranks high among the four broad
strategic development priority angles. The other three are rehabilitation and construction of
physical infrastructure, private sector development and employment generation, and capacity
building and human resource development.
2.1. Contribution of Agriculture to the National Output
Prior to 2000, agricultural production accounted for almost half of Cambodia’s national
output, reflecting the agrarian nature of the country’s economy. However, the sector’s contribution
has declined markedly in the past two decades. Latest data from MAFF show that it contributed
only 33.5 percent of the country’s gross domestic product (GDP) in 2009, down from 45.3 percent
in 1993. The sector’s share of employment of the national workforce also shrank, from 67.4
percent in 2002 to 55.9 percent in 2007, though it remains substantial despite the slump. This
significant change in the structure of the Cambodian economy is a result of a rapid expansion in
manufacturing industry, namely textiles and clothing, and the services sector.
Table 1: Share of Agricultural Production in National Output, 2002–09
Category 2002 2003 2004 2005 2006 2007 2008 2009
Share of agriculture in GDP (%) 33.3 31.5 32.0 30.7 30.1 29.7 32.8 33.5
Share of employment in agriculture* (%) 67.4 64.2 60.3 59.1 57.4 55.9 - -
Agriculture value added (KHR billion) 5108 5645 5596 6476 6830 7174 7562 7994
Growth of value added (y-o-y) (%) -2.5 10.5 -0.9 15.7 5.5 5.0 5.4 5.7
Sub-sector shares in agriculture
Crops (%) 42.4 46.8 46.1 50.9 50.8 52.2 52.7 52.9
Fisheries (%) 31.6 29.1 28.8 26.3 25.9 24.8 25.0 25.2
Livestock and poultry (%) 16.8 16.1 16.9 15.4 15.8 15.6 15.5 15.3
Forestry and logging (%) 9.1 8.0 8.1 7.4 7.5 7.3 6.9 6.6
Note: *Data from IMF (2007, 2009). Source: MAFF (2008, 2009, 2010)
CDRI Working Paper Series No. 60
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