Cambodia Rice

Cambodia has recently re-entered the world market as a rice exporting nation, following a 30-year hiatus caused by war, political isolation, and a decimated agricultural sector. A resurgence of rice cultivation is occurring all across the nation’s vast lowlands, as the rural population expands and previously abandoned or mined farmland is brought back into production. Rice production growth in Cambodia over the past 10-12 years has been surprisingly strong, increasing at a 9 percent annual growth rate. At the same time, rice exports have increased from zero in MY 2000/01 to an estimated 800,000 tons this year (MY 2009/10). Given the country’s recent success in achieving surplus rice production, the Cambodian government is intent on expanding its production and export capacity and becoming a major rice export nation. Public statements by government ministers in the last year indicate that Cambodia wants to double rough rice production by 2015 to approximately 15.0 million tons (9.45 million milled basis) and export 8.0 million (5.0 million tons milled rice). Although it is apparent that Cambodia has all the required natural resources (ample land and water) to make this possible, serious constraints plague the nation’s rice sector and its future growth potential is uncertain. Analysts from the USDA Foreign Agricultural Service (FAS), the Economic Research Service, and the U.S. Embassy in Phnom Penh investigated rice production prospects in Cambodia and the outlook for continued growth in the sector during recent travel in the country. 

Rice farmers in Cambodia are predominantly subsistence producers, with the World Bank estimating only 40 percent of growers are generally capable of generating a marketable surplus. Average national rice crop yields are among the lowest in Southeast Asia, despite a decade of very strong growth following the gradual adoption of improved varieties and expanded use of irrigation. Chemical fertilizer use is extremely low and native soils are often very infertile. The United Nations Food and Agricultural Organization (FAO) estimates that Cambodia has the lowest rate of fertilizer use for rice in Southeast Asia, with only about 30 percent of total area receiving even minimal applications. Virtually all land fertilized receives well-below recommended levels of nutrients. The majority of farm producers do not have officially documented land titles, and therefore have diminished capacity to secure affordable lines of credit for either crop production or land improvements (irrigation). The severe shortage of agricultural credit in Cambodia is crippling rice producers capacity to continue to increase productivity and output, due to their inability to adequately finance purchases of improved higher-yielding seed, fertilizer, pesticides, farm machinery, and grain storage equipment. Expansion of cultivated acreage is also becoming problematic owing to a gradual decline in the rural labor force. An expanding national economy has resulted in a net migration to urban areas in recent years, and rapidly increasing rural labor costs. Farmers, government officials, and development authorities indicated that there was a critical manpower shortage during periods of peak demand for rice cultivation (planting, transplanting, harvesting) and that further growth in national acreage would require a substantial increase in farm mechanization.