The government has identified three target provinces in which to develop agribusiness industrial parks, with industry experts calling for the initiative to be upgraded to Special Economic Zone (SEZ) equivalent status, to promote agricultural production in Cambodia.
The Coordinating Committee for the study and development of agro-food industrial parks in Cambodia held its third meeting on April 28, during which three provinces were selected for the establishment of industrial zones. These are Battambang, Kampong Speu and Kampong Thom.
Attending the meeting were representatives from the Ministry of Economy and Finance, agricultural industry associations and private companies. They discussed key findings from the value chain and mapping studies, as well as the regulatory challenges of developing such parks in a Cambodian context.
The Agribusiness Industrial Park is an initiative of the Supreme National Economic Council, the Ministry of Finance and the Cambodia-Australia Agriculture Value Chain (CAVAC) program to help expand export markets for Cambodian agricultural products.
Cambodian Chamber of Commerce (CCC) Vice President Lim Heng, who attended the meeting, proposed that parks adopt the characteristics of SEZs – including through the establishment of regional factories – in order to encourage private sector companies to invest. Such factories would boost exports, job creation and market access for farmers, he said.
Heng noted that the next phase would be formulating policies and promoting private sector participation in park development.
“We will submit the decision to the national level [for the government] make a decision of principle before we can establish a policy framework or any mechanism to encourage the private sector to participate in this work. It is imperative that the private sector be involved, with further discussions to be had on seeking credit from state-owned or partner commercial banks,” he said.
He described agribusiness industrial parks as a likely solution to several long-standing problems plaguing the agricultural sector, including high transport and electricity costs, as well as the illegal import of goods into the country.
Heng noted that government ministries have accelerated the work to establish the parks, as the expansion of agricultural land in Cambodia means that the production of agricultural products is increasing day by day.
Center for Policy Studies (CPS) director Chan Sophal observed that investing in such parks requires significant capital, which means companies will want to carefully analyze the costs before deciding to invest.
Sophal said the CPS has closely studied different kinds of infrastructure needs of enterprises in agro-industrial parks, to avoid the problem of vacant factories.
“If good quality Agribusiness Industrial Parks are to be built, government support is needed, especially to create low-cost electricity infrastructure. Only if there is something like that – which sets these parks apart from other such initiatives – will businesses be attracted to settling in the parks,” he said.
According to a report by the Ministry of Agriculture, Forestry and Fisheries, 4,040,704 tonnes of agricultural products were produced in Cambodia in the first four months of 2022, a 5.6% year-on-year increase. on the other. A total of 3,826,433 tons or 94.7% were exported, especially milled rice, paddy, fresh cassava, cassava chips and tapioca starch, which saw a significant increase in volume of exports.