Cambodia will mostly rely on agricultural products for trade with partners around the globe, a move that requires the sector to be more developed and productivity increased, insiders say.
It follows news that the bilateral free-trade agreement (FTA) between the Kingdom and China has just been finalised.
However, Minister of Agriculture, Forestry and Fisheries (MAFF) Veng Sakhon said that reaching the FTA is not the end of the process.
He said Cambodia had a long way to go before it can send more agricultural products to international markets because issues of sanitary and phytosanitary arrangements (SPS) remain unresolved.
SPS measures are used to protect humans, animals, and plants from diseases, pests, or contaminants and they are lacking in much Cambodian agriculture.
One problem is that fresh foodstuffs have a limited shelf life and if they are held up too long while checks are made on their safety, they become inedible – a costly business.
“Everybody is now happy with the Cambodia-China FTA but SPS arrangements are the main barrier for the agriculture sector not only with China but with other trade partners as well,” he said. “Without [official] SPS measures in place, we need to take more care to meet their standards.”
When asked how long it takes for the country to meet SPS standards, the minister said the draft law on the management and control of vegetable SPS measures is currently in limbo because of disagreements between ministries.
“Other relevant ministries have opposed the law, so the draft is stuck… so how can other countries recognise or trust our products?” he asked.
He said the ministry is urging farmers to register with the Ministry of Agriculture so they can undertake training courses on farming techniques and SPS measures.
Under the FTA with China, Cambodia has listed around 340 more commodities to export to China, bringing the total to more than 10,000. Most of the products are in agriculture and agro-processing and are in addition to what Cambodia has received from the Asean-China FTA.
The 340 products included items such as pepper, chillis, pineapples, vegetables, fruit, fish, meat (including processed), grain, crabs, seafood and a variety of canned products, of which 95 percent of the commodities will be untaxed while the remaining 5 percent of taxed goods will become tariff-free in at least 10 years.
Cambodia is also now pushing to reach a free-trade deal with some of the world’s leading economies – namely South Korea and the Eurasian Economic Union (EAEU), the Russia-led economic bloc composed of five member states.
Hun Lak, Longmate Agriculture director, a Cambodian company that has exported more than 20,000 tonnes of bananas directly to China since 2019, said that while the FTA is a gateway to bring more of Cambodia’s agricultural products to international markets, the country needs to increase productivity and demonstrate its quality.
He said while the FTA was now finalised, the government still needs to work on its SPS measures, which is vital for food products.
“The FTA is opening the door for Cambodian agricultural products and it will help to attract more both local and foreigners to invest in the nation’s agriculture sector for exports while it also creates job opportunities,” he said.
However, he said Cambodia needs to find more markets that are willing to pay a higher price than the Chinese and that absorb more in volume.
The MAFF also requested more agricultural commodities such as mangoes, peppers, dragon fruit, cashew nuts, Pailin longan and bird’s nests to be exported to China.
“We always have a meeting every year with Asean countries pushing SPS implementation. Any member states that do not comply with SPS measures will have their agriculture products declined,” Sakhon said.