The Royal Government of Cambodia has clearly realized the importance of rubber as an agro-industrial crop in generating income for the agro-industry sector as well as for the rural farmers. Even though other crops such as rice have made considerable contribution to national income, natural rubber remains an important agro-industrial crop that provides employment for the locals in a big way.
In 2010, Cambodia produced 42,000 tonnes of natural rubber latex, which is 0.29% of the global natural rubber production and is ranked the 16th among other natural rubber producing countries. The country has of late come out with clear-cut strategies aimed at increasing NR plantation area to 300,000 hectares and raising output to around 290,000 tonnes by 2020.
To support the growth of natural rubber industry, the Government has laid down clear regulations, legal procedures, mechanism and other formalities on granting economic land concession with the sole idea of encouraging local and foreign investment in rubber cultivation. “The main goal of the Government’s open agriculture policy is to provide unused land for the development of the agro-industry, good crops or agro-industrial crops, plantations such as oil palm, teak, rubber, animal husbandry etc.,” says Yim Chhay Ly, Deputy Prime Minister and Chairman of the country’s Council for
Agriculture and Rural Development
Between 2008 and 2009, the Government privatised nine State-owned rubber plantations. Subsequently, it was decided to grant Economic Land Concession (ELC) of less than 10,000 hectares to local and foreign companies for rubber cultivation. Presently, Cambodia exports all of their raw materials. However, of late, added focus is being given to developing the downstream rubber industry
“We have not only increased the area for rubber plantation but also invested in the development of more productive rubber clones and implemented good agronomic management among smallholders,” Chhay Ly points out. Efforts are also being made to strengthen rubber research in co-operation with regional and international research institutes and through the Cambodian Rubber Research Institute of the General Directorate of Rubber.
According to Ly Phalla, Director General of the Cambodian General Directorate of Rubber, the country’s rubber strategies are designed to guarantee quality of production and the planting material, encouraging smallholders, promotiing rubber estates to be a nucleus of the rubber smallholders, and developing and enhancing rubber value chain.
Challenges and opportunities
Recently, there has been a lot of interest am-ong the natural rubber growers and others worldwide in either expanding rubber cultivation or promoting new planting in the traditional and non-traditional areas due to the high rubber prices. Cambodia’s large area of basaltic red soil has encouraged the current Government to place the rubber sector among its top development priorities. Cambodia’s NR cultivation started back in the 1920s when it was a French colony. An old plantation is still being preserved as a testimonial of its vibrant past.
“I would say that rubber is making resurgence in the agricultural sector of the country,” says Mak Kim Hong, President, Association of Rubber Development of Cambodia. He adds that the Government has already concluded some Free Trade Agreements (FTAs) that give the country preferential access to major markets for rubber exports. “China, for example, is one of the largest markets for rubber. Lower tariffs on rubber products under the Asean-China Free Trade Agreement will stimulate greater export from Cambodia and thus boost domestic rubber production,” he points out.
However, the Cambodian rubber industry is still facing many challenges and constraints that hinder the sector’s development. The issues are more prevalent in the smallholding sector, particularly, in the usage of low-yielding clones, limited availability of plant material, inappropriate tapping techniques, unpopular credit facility and high interest rates charged by private financial institutions, low international acceptance of Cambodia-specified rubber and unexploited direct market access to the international markets.
Despite these challenges, potential market opportunities for Cambodia’s rubber sector are immense. The steady growth of production in recent years is due to the rigorous land reforms and welcome investment policies of the Government of Cambodia that encourage Foreign Direct Investment, making rubber an increasingly attractive investment sector for local farmers and foreign investors. The Association for Rubber Development of Cambodia and the General Directorate of Rubber play an important role not only in promoting the rubber industry locally and internationally; but to remove constraints that hinder the sector’s development.
Profile of plantations
In Cambodia, rubber is mainly grown in Kampong Cham, Ratanakiri, Mondoldiri, Kratie and Kampong Chhnang provinces. Most of the rubber is grown by the State-owned plantations, the private-owned plantations and the smallholdings. Total harvested and immature areas surged from 80,000 hectares in 2007 to approximately 150,000 hectares in 2010.
The total planted area of the estate-run plantations increased from 45,000 hectares in 2007 to about 70,000 hectares at the end of 2010. Despite the growth of the planted area in estate-owned plantations, its total share has dropped marginally compared to that of the smallholdings. Broadly speaking, the rubber industry in Cambodia accounts for only 4% of the country’s agricultural sector and employs approximately 40,000 people throughout the country. “Over recent years, Cambodia has transformed from a land of crisis to a land of opportunity, and our boom days are just beginning,” says Kim Hong.