Policy Paper on the Promotion of Paddy Production and Rice Export.

The Royal Government of Cambodia (RGC) has made a strong commitment to ensure further implementation of the Rectangular Strategy-Phase II, after successfully leading the Cambodian economy out of the most difficult time of recent global financial crisis and economic downturn. To this end, the RGC decides to embark on promoting the development of agriculture sector, with a new pace and scale, aiming at further strengthening the foundation for economic growth, accelerating poverty reduction, as well as improving the living standards of the Cambodian people. In realizing the vision of agriculture development, the RGC has adopted a three-pronged strategy—productivity enhancement, diversification and agricultural commercialization (from subsistence to commercial agriculture)— through implementing a package of interrelated measures: 1) infrastructure building and enhancement (roads, irrigation, energy/electricity and ITC); 2) improvement in the provision of extension services and agricultural inputs; 3) land management reform; 4) finance; 5) marketing; 6) farmer organization; and 7) institutional building and coordination.
In the current context, agricultural commercialization has become more dynamic in lights of global economic changes due to increasing food demand and prices. This trend has some implications and revives the impetus of paddy rice and other crops production in Cambodia, which has the potential for further higher growth. 3. Cambodia has a big potential in paddy rice production to increase its milled rice export in the future. To guide its vision for the preparation of economic development policy, the RGC has an ambition to turn Cambodia into a key «rice - white gold» exporting country in the international market. Realizing this opportunity, the Royal Government has introduced a series of measures, in cooperation with farmers, rice millers and traders as well as development partners, to address the many challenges involving the high cost of rice processing, transportation, export processing and clearance, the creation of funds to support and develop agriculture and the provision of further fiscal incentives provided to this sector. These measures were not consistent and systematic, and when implemented, they were not sufficiently effective and the results were incomplete. The vision of the Royal Government is to transform Cambodia into a «rice basket» and key milled rice-exporting country in the global market.