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By: Sim Huy Chhoung Abstract The development of Cambodia’s agro-industry will serve as the economic growth center because it will play roles in generating more job opportunities for the people, especially the ones who are unskilled, living in the rural areas.
It will also add values to and serves as the potential market for the agricultural commodities, which are raw materials utilized in the processing. Besides, the progress of the sector will strengthen and enlarge not only the domestic import-substitution production base, but also the export production base, which could allow Cambodia to reduce its trade deficit and save more hard currency for the development of other economic sectors. Last but not least, when the sector has well developed, it would push along such other sectors as trading, transportation and the agriculture itself. As an ultimate result, the living conditions and the live quality of the Cambodians would be promoted and the intensity of poverty would be eliminated to a great extent, if not all. However, all what has been described above is just theoretical principles, not the practically actual advantages which Cambodia has so far enjoyed. At the present time, when just glancing at some sectors in domestic markets, we can see that most processed agricultural products sold on those markets, such as canned foods, preserved fruit and other types of dried and processed foods, are mainly imported especially from neighboring countries like Vietnam, and Thailand, which both have been endowed with fertile agricultural land, other natural resources and favorable climate for agriculture that are similar to those of Cambodia. As for the domestically processed foods, which have been produced by dominant informal small and medium enterprises using mainly traditional techniques handed down from one generation to another and, therefore, have not yet reached the international quality standard, seem to be gradually losing their market shares in local markets, let alone in export markets, if compared to other similar or substitute imported products. What makes the situation worse is the facts that most of the domestic producers have faced many resolvable problems such as the lack of government’s supporting policies, lack of solid information in both product markets and factor markets, insufficient sources of funding and higher production costs than the imported ones, specifically the tariff avoided. What is behind such situations? What will Cambodia be eventually rendered if such situations are going on in the context of today’s knowledge-based economy and throat-cut market competition among countries? What are possible solutions that can relieve the situations and help promote the sector toward development? With acute attempts to answer these questions, a research on agro-industry, which focuses on food processing sector, has been conducted to discover the underlying problems and prospects for the development of the sector. The study has got five main objectives including: (1) the flow fo raw materials from suppliers to the processors, (2) the processors’ access to using technological equipment for the production, (3) the employees’ skill, (4) the financial positions of the producers involving the start-up capital, working capital and their business profitability, (5) the characteristics of the processed foods markets for domestically produced goods. Institution: Royal Academy of Cambodia Supervisor: Ms Prom Tevy (Ph.D) Degree: Master of Economic Year: 2002 |
