Over the past two decades, Cambodia has had one of the fastest growing economies in the world, but this growth has come from a very low base. Notwithstanding its recent economic growth, Cambodia continues to face major development challenges. Poverty has fallen dramatically—from 53% of the population in 2004 to less than 20% in 2012—but Cambodia remains one of the world’s least developed countries. It was ranked 128 of 168 countries on the basis of GDP per capita in 2012. There is much to be done if Cambodia is to continue its impressive economic growth and poverty reduction. The barriers are clear. Further investment is needed to improve infrastructure, increase agricultural productivity, and deliver better quality health and education services.
—Aid Investment Plan, Cambodia, 2015 to 2018, DFAT
Cambodia is one of the poorest countries in Asia. The country has slowly recovered from the horrors of the late twentieth century, when millions died in Pol Pot’s murderous regime (1975–79) and in the civil war that lasted until 1997.
Cambodia attained lower-middle-income status in 2015 because of sustained economic performance. Its annual GDP has grown by at least 7% since 2011. Industry, services, finance, and tourism all contribute to GDP growth. In 2017, Cambodia is expected to keep up this growth pace.
Cambodia remains overwhelmingly rural; 80% of the population live on the land and more than 70% rely on agriculture for their livelihoods. The most important agricultural activities are crop cultivation, livestock and poultry raising, supplemented by fishing and aquaculture.
Since early 2015, Cambodia has experienced the worst droughts in 50 years. The El Niño phenomenon brought about excessive heat, decreased rains and increased food insecurity. Hundreds of livestock died, rural villagers became sick from dehydration, and irrigation canals, ponds and wells across the country ran dry. Most of Cambodia’s 25 provinces experienced critical water shortages that severely affected an estimated 2.5 million Cambodians.
According to a UN survey report, debt among low-income families increased by an average of US$1,200 by the end of the El Niño. Households lost 19% of their income in crop failures. Desperate farming households borrowed money to buy new seeds to replace failed crops and dead livestock.
75% of Cambodia’s women work in agriculture. The extensive crop and livestock losses due to the drought most affected women and female-headed farming households.
Prime Minister Hun Sen said Cambodia must learn how to tackle drought and promised to expand irrigation. The Central Bank is also working with microfinance institutions to address the financial needs of those recovering from the drought.
In 2016, global food prices also declined, and the global rice market was more competitive. The World Bank reiterated its advice of 2015 that the Cambodian government should ‘move the focus from higher production and exports to stronger rice-based farming systems that are diversified, commercial, and resilient to climate change, and supported by a modernized value-chain and cost-effective logistics’. The Asian Development Bank expects agriculture will barely grow in 2017.
The Cambodian Government intends to develop agriculture (diversification, value-added, productivity). Under the National Strategic Development Plan 2014–2018, the government wants agriculture to grow by 4% each year. They will modernise Cambodia’s agriculture through ‘techniques, new technologies, mechanization and irrigation to improve the yield rate, and diversify activities into high value crops, livestock, and aquaculture in an environmentally sustainable manner’.
Australia has a long history of bilateral relationship with Cambodia and is committed to Cambodia’s development. Australian Government agencies deliver considerable Official Development Assistance. Based on Australia’s Aid Investment Plan 2015-18 (AIP), Australia is committed to work with Cambodia to make agriculture more productive; strengthen governance, health and infrastructure; and promote gender equality.
The Cambodian Ministry of Agriculture, Forestry and Fisheries (MAFF) identifies the following national objectives:
- Improve food security, productivity and diversification;
- Improve market access for agricultural products;
- Improve and strengthen the institutional and legislation framework;
- Ensure the rural poor have access to land resources through land reform for land tenure and developing land markets;
- Create possibilities for the poor to access land by improving land tenure security and land market, reducing land disputes;
- Ensure the rural poor have sustained access to fisheries resources by reforming the fisheries;
- Promote forestry reform to sustainably manage forestry resources and ensure the rural poor have access to forestry resources, and
- Better manage natural protected areas, including mangrove forests, through processing data on land use, forest coverage, infrastructure and geographical divisions between protected areas.
Australia supports Cambodia’s agricultural development through its assistance program under ACIAR. ACIAR priorities align well with the aid program’s overall purpose – to promote Australia’s national interest by contributing to sustainable growth and reducing poverty – and the AIP. In Cambodia, ACIAR priorities include:
- intensify and diversify production systems, through more productive and sustainable management of groundwater, irrigation and soil fertility, and advances in crop nutrition
- make horticultural farm-levels more productive through improved seed usage and product quality, post-harvest handling and market-chain participation
- increase animal productivity by improving nutrition and methods to prevent and control diseases, adjusted to farm conditions
- enhance crop and forestry values and market opportunities through enterprise diversification, breeding and conservation practices, together with innovations in mechanisation, value-adding and postharvest handling
- give smallholders better access to agricultural extension services, mechanisation, and postharvest services and technology, so farmers have better access to markets and adapt to climate change.
In 2017, ACIAR will consult and discuss with the Cambodian Government its strategic priorities for the next ten years.