Cambodia Investment Review

German development agency launches $7M investment in Cambodia’s cashew and cassava smallholders

German development agency launches $7M investment in Cambodia’s cashew and cassava smallholders

Brian Badzmierowski

Smallholder cashew and cassava farmers in Cambodia will soon receive a much-needed boost in modernizing their farming techniques and reaching larger markets thanks to a new six million euro ($6.975 million) project being spearheaded by GIZ.

The Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH (GIZ) is a German development agency.

The Strengthening the Climate Resilience of Agricultural Systems in Cambodia and Viet Nam’ (CRAS) project officially launched yesterday and will focus on training farmers in sustainable farming practices to increase their yields and profits as climate-related factors continue to cast uncertainty over the industry. 

Dr Gunter Reithmacher, country director of GIZ, said during the opening ceremony that climate change – specifically droughts, floods, and strong temperature variations – has greatly impacted the agriculture sector in Cambodia.

“Recently planted crops died because of droughts, floods caused by heavy rains have destroyed crops, [and] farmers have been left with a big cut in their income and almost no possibility to cope with that,” he said.

He added that the project, which will run until 2024, aims to improve the livelihood of some of these farmers.

“The main goal is always to improve the livelihood of beneficiary groups and allow the rural population to access wider markets to improve their household income.”

Hannah Bartels, the management assistant for CRAS, said that the project will improve production methods to become more climate-resilient, increase the sales of crops produced with these new techniques, and inform national policies with recommendations and data gathered from the project.

“Farmers receive on-the-ground training and coaching for climate-resilient planting techniques,” she said. 

Junior consultant for CRAS Lukas Waldmann said current techniques could be improved by taking measures such as properly monitoring pests to reduce the use of chemicals on farms, a change that would both safeguard farmers’ health and minimize environmental impacts.

New farming techniques could be on the horizon as well.

“In predecessor projects, for example, it became clear that mineral fertilization can be at least partially substituted by organic measures [such as natural liquid fertilizers] using products produced by farmers on their sites. This also leads to less environmental impact and additionally saves costs for farmers,” he said.

Diversify their products, increase the quality and quantity

According to Bartels, the project will help farmers diversify their products, increase the quality and quantity of their yields, and make them more resilient to climate change.

“Also, through the efforts of cooperating with the private sector and business matchmaking, farmers can get better access to the market,” she added.

The project is being carried out in conjunction with the Royal University of Agriculture (RUA), the Agri-Innovation Fund (AIF), research institute CIAR, and the General Directorate of Agriculture.

Research for the project started in March, and after a call for proposals with AIF yielded 81 participants, four companies representing about 1,325 farmers were shortlisted to implement their ideas.

Ample-Agro Products Co, Ltd proposed increasing local cashew processing in Kampong Thom and Siem Reap and creating story-driven promotional content to attract wealthier markets abroad.

Handcrafted Cashew Nuts Stung Treng plans on installing solar-powered cashew nut processing plants and introducing a pre-financing model to help farmers purchase necessary equipment.

SHE Agrorcam Products, Co, Ltd, will focus on training new cashew nut processors in Kampong Thom and marketing locally processed cashews to both domestic and international markets.

A cashew nut processing facility in Kampong Thom.

Each of these cashew-based projects proposes to increase profits for the combined 825 farmers involved.

Trouchou Upland Crop Development’s proposal focuses on 500 cassava farmers in Banteay Meanchey and Odddar Meanchey. The company plans to train the farmers on proper cropping systems, soil management, and the cultivation of clean planting material.

The companies still need final approval before beginning in November.

Dr Ro Sophoanrith, the vice dean of the faculty of agronomy at RUA, said the school would collaborate with GIZ by providing the agency with data and access to networks within the sector while GIZ would assist with creating a digital information platform to help widely disseminate content related to best farming techniques.

In its preliminary research for the CRAS project, GIZ conducted a survey in August of 289 households of cassava and cashew farmers in Kampong Thom and Kratie to learn about their farming practices.

It revealed that 73 percent of the cassava farmers surveyed faced disease and pest problems although only 31 percent treated them.

Almost all of the farmers interviewed said they had noticed that climate change has had a negative impact on their production, but only 27 percent said they had started adapting to this change, mostly by using more agrochemicals or updating their irrigation systems. 

Cashew farmers reported needing guidance 

Most farmers reported that they did not have the knowledge to properly address the effects of climate change.

Cashew farmers reported needing guidance on ensuring the quality of their crops, using pesticides to control pests, understanding proper fertilization techniques, and finding methods to increase their yields.

Cassava farmers requested training for increasing their yields, improving their storage for seedlings, applying fertilizer, and controlling pests. They also requested proper weight scales at collection points.

The survey showed that cassava and cashew farmers sold most of their goods unprocessed at the local village level, while 100 percent of interviewees said they had no written agreements with buyers for their products.

Bartels said one of the keys to ensuring the long-term success of the CRAS project beyond 2024 would be to connect these farmers to businesses interested in sourcing sustainably produced crops and encourage them to form partnerships.

Lessons and best practices learned from the project will also be digitalized, allowing the valuable information to be shared and adopted widely on a national scale.

Dr Mak Soeun, the deputy director-general of GDA, said cassava and cashew crops have been prioritized as key sectors to spur agricultural growth in the Kingdom and that the CRAS project will provide a foundation for the nation to build on.

Cambodia is currently the fourth largest cassava producer in Asia and tenth-largest in the world, per the UNDP. 

In January, a new policy was implemented by the UNDP, the Ministry of Commerce and the Ministry of Agriculture, Forestry and Fisheries (MAFF) to increase production and exports of the valuable crop.

Cashew exports continue to grow as well. During the first seven months of this year, 1.1 million tons of cashews worth $1.83 billion were sent to Vietnam, representing almost half of Vietnam’s cashew imports.

From January to August, Cambodia exported 876,521 tons of cashew nuts, a 340 percent increase from the previous year, according to MAFF data.

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