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Agriculture hits the doldrums

Sok Chan / Khmer Times Share:
A farmer carrying bundles of hay. KT/Chor Sokunthea

Agriculture plays a crucial contribution to economic growth, but a dramatically slowdown in the last five years has led to concern and the need for government and stakeholders to adopt policies to promote the sector.

Data from the Ministry of Economy and Finance shows that growth in agriculture dropped to one percent in the last five years.

It was 4.5 percent from 2008 to 2012 and 7.2 percent from 2003 to 2007.

Agriculture’s share of Cambodia’s gross domestic product (GDP) was 27.1 percent in the last five years, down from 33.6 percent from 2008 to 2012.

The data also revealed that crops, animal production and fisheries which are sub-sectors in the agriculture sector, dropped to 1.1 percent growth from 2013 to 2017, down from 5.5 percent in 2008-20012 and 12.1 percent in 2003-2007.

Animal production dropped to 0.3 percent in 2013-2017 and fisheries dropped to 1.7 percent in 2013-2017.

MEF economist Lao Poliveth said at the Performance and Outlook of Cambodia Economy Forum yesterday that the slowdown of the agriculture sector growth stemmed from low productivity, failure of agriculture in domestic and international markets, climate change and the lack of expansion of cultivated land.

Mr Poliveth said productivity in Cambodia had decreased four-fold compared with Vietnam and Thailand. He added Cambodia’s productivity growth was only 5.3 percent in the last five years while it was 20 percent from 2008 to 2012.

He said land under cultivation grew by only 1.87 percent in the last five years, while it grew 6.7 percent from 2008 to 2012.

He said commercialisation in agriculture was increasing but the increased export of agriculture products was mostly raw materials, not finished or processed products.

Exports were mostly carried out by cross border trade or informal trade.

“The challenge in agriculture is to increase low productivity, the limitations of commercialisation, low diversification and lack of investment in processing,” he added.

Chan Sophal, director of the Centre of Policy Studies, told the forum he was surprised at the share of agriculture decreasing in the last five years.

He said three factors pushed market failure in agriculture – agriculture input, output and credit.

“Input in agriculture including the quality of seeding is not checked by government counterparts for imports or produce in Cambodia. The cost of importing agriculture machinery and spare parts is still high, and there is a lack of extensive training,” Mr Sophal said.

“For the output market, there is no agro-industry or processing factory and credit is still expensive compared with Vietnam and Thailand.”

Mr Sophal recommended modernisation of agriculture, attraction of more agro-processing investment and commercialisation.

Mr Poliveth agreed with Mr Sophal, adding that there was positive growth for agriculture in the future but it was limited. Opportunities and potential existed to promote growth and develop agriculture in the medium and long terms.

“Growth in the agriculture sector is predicted to recover but it is limited,” Mr Poliveth said.

Vongsey Vissoth, secretary of state at the Ministry of Economy and Finance, said the slowdown in agriculture was because there was pressure on the market and no land to expand.

“We have to diversify to other crops and sectors which have high added value,” he said.

“Don’t be negative about agriculture. No other countries in the world have agriculture growing more than 5 percent a year.

“The drop of agriculture’s share of GDP is because the price of agriculture commodities in the market is down. Thus, we have to figure out how to solve the issues of input and output in agriculture.

“The agriculture sector is complex but it is important in its role to ensure food security, exports and reduce poverty. We have to deal with the agro food system to supply the domestic market, tourists and export,” he added.

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