Agriculture has been a key economic driver for Cambodia. In 2019, nearly two thirds of the agriculture value in Cambodia come from the crop sector. Despite advantages in agriculture production and recent improvements for Cambodian fresh crops to gain official market access to its neighbouring countries, the export of the crop products from Cambodia remains much lower than its production.
The GIZ Support of Regional Economic Cooperation in Asia (SRECA) project has been commissioned by the German Federal Ministry for Economic Cooperation (BMZ) to improve regional and global trade in Cambodia, Lao PDR, Vietnam and Mongolia in partnership with China. To be better informed about the agricultural trade sector in Cambodia, identify the stakeholders in the field, challenges of the Cambodian SMEs to export agri-produce to international markets, especially to China, the study “Export Readiness Report – Assessment of Cambodian SMEs within the Agricultural Trade Sector” has been produced and published in September 2021.
The study finds that the Cambodian SMEs face the following major hindrances while trying to access to international markets. First, most farmers and trading businesses prefer to stay as “informal’ traders inside Cambodia, to carry on engaging with their current production practices, capacities and market, they also hesitate to export given their registration status. Second, producers and traders often face unfamiliar issues with international supply of fresh produce. Third, Cambodian agriculture produces at the current stage faces limited branding in international markets. Fourth, the producers and traders are generally unfamiliar with the international market, thus have limited connections with the potential buyers. Fifth, exporting would generally lead to high logistics and production costs while the stakeholders have limited access to finance for investment and financing. Finally, there is a lack of official market access to many of the export destination countries, therefore making the process of exportation more complicated, leading to high negotiation and procedural costs.
According to these findings, the study also provides recommendations for further interventions SRECA can adopt to support the producers and traders more effectively in Cambodia. First of all, the study calls for improved coordination among key government agencies and stakeholders for data and info sharing, technical service delivery and multi-stakeholder dialogues to clarify on exportation process inside and outside of Cambodia. Technical wise, the core for farms to prepare for international markets remain to be standard awareness, adaption, and certification for strengthening the international branding for the fresh produce from Cambodia. In addition, for the export-oriented SMEs, they need to enhance their own capacities, apply for appropriate licenses, and strengthen their business and financial management practices. Their producer networks and cooperatives should also be strengthened and supported. Last but not the least, the project is advised to put more efforts and offer more incentives to inviting investment in the exporting businesses, and supporting facilities, at the same time, support the digital finance and technology adoption for the businesses.
Since the report was first drafted in September 2020, it has been shared around among partners in Cambodia for joint planning as well as for providing guidance when updating SRECA’s export guidelines. In September 2021, it has been formalised and laid out as a SRECA publication for references of a broader audience.
(The contents of this entry is primarily based on the original study)