Cambodia Investment Review

Time is ripe for investment in Cambodian agriculture

Time is ripe for investment in Cambodian agriculture

By Brian Badzmierowski

The time to invest in Cambodian agriculture is now, according to a panel of business experts from the private and public sector who discussed the potential for increased agricultural profits in the Kingdom.

The Agricultural Trade and Investment in the Kingdom of Cambodia event was attended by Cambodia Investment Review, hosted by the American Chamber of Commerce and moderated by its President Anthony Galliano,

The panel looked at the different avenues for increased productivity in agriculture in the Kingdom. More investment, increased worker capital, and improved technical expertise were viewed as prime drivers to the future growth of the industry.

Benjamin Petlock, Senior Agricultural Attaché at the Foreign Agricultural Service’s office based in Ho Chi Minh City, said US exports to Cambodia should continue to increase as well.

US agricultural exports to Cambodia reached $72.7 million in 2020, representing a slight drop from 2020 likely due to Covid-19. In 2014, exports totaled under $30 million.

Petlock said the forecasted increase in exports is due to several factors, including increased demand for animal feed, a prioritization of food safety and quality, and a growing young population with varied food preferences.

In addition, the retail market is changing, he said, with more business shifting from wet markets to traditional retailers.

James Hershey, Chief of Party at the American Soybean Association’s Commercialization of Aquaculture for Sustainable Trade-Cambodia (CAST) project, said his team is working hard to overhaul the fishery industry in the Kingdom, which could benefit from more careful management and increased training programs.

The CAST project is currently working with 600 commercial-sized farms to train farmers on best practices and increase their efficiency. A primary goal is improving the quality of fish feed in the Kingdom and creating more sustainable practices within the industry.

“Cambodian farmers could do better,” he said. “They are not efficiently producing enough or increasing their own profitability to compete. We can help them do that.”

He said there is regional demand for Cambodian fish products, but the process of exporting them needs to be formalized.

James Davenport discusses the potential for expanding Cambodia’s rice cultivation.

Patrick Davenport, Director and Co-Founder of BRM Agro, a rice plantation and milling company located in Kampong Thom province, said there is ample opportunity for Cambodian farmers to capitalize on their rice exports but more investment in updated milling equipment and technical expertise is needed.

He said rice cultivation could increase with better access to reliable irrigation — something that would allow more farmers to plant a dry season rice crop — and better access to high quality seeds and fertilizer, which could allow rice to grow on previously unfarmed land.

Currently, profits are being spread across neighboring countries that receive rice paddy from Cambodia and process it themselves, he added.

“Neighbors benefit from commodities. They pick up things in Cambodia and process them there. In the meantime, Cambodian farmers are paid 20 to 25 percent less [than farmers in neighboring countries].”

He said last year, only about 680,000 kilograms of milled rice was exported from Cambodia, with the rest being exported as paddy. He added that the Kingdom produces roughly 10 million tonnes of rice per year.

On his farm, he said he is focusing on empowering local farmers and paving the way to provide value-added goods — including rice flour, crackers, and noodles — in the future.

In an innovative approach, he has rented his farmland out to local farmers and given them a share of the company, something that has motivated them to increase their production and in turn, their profits.

Daniel Rothenburg, CEO of Baby Bird Co, Ltd, a Kampot pepper farm located in Kep, said his moneymaker is exporting the famous Kampot pepper but his current focus is producing quality domestic goods for sale within Cambodia.

“We want to create high-value products to sell in the emerging middle-class market here and eventually export,” he said.

A big challenge to massively improving Cambodia’s agricultural export potential will be adapting to world standards, Petlock said. Coordinating with the World Trade Organization concerning standards and ensuring compliance with all phytosanitary requirements for potential export destinations should be top priorities, he said.

Galliano pointed to projects like CAST, Baby Bird, and BRM Agro as examples of the growing potential for collaboration between US investors and the agriculture sector in Cambodia and said the US represents an ideal trading partner for Cambodia as it continues to expand its global trade footprint.

“I am encouraged by recent investments that are not only an agricultural business with improved crop quality and more advanced farming techniques but are also real estate plays which underwrite the business proposition,” Galliano said.

“With the U.S. investment in the sector, I am hopeful that stronger trade links will evolve and Cambodia can further boost a surging bilateral trade relationship with the U.S., with an increase in agricultural exports, given that the United States is the second largest importer of agricultural products globally,” he added.

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