Context
Since the turn of the millennium, Cambodia has achieved impressive economic growth and made remarkable progress in advancing reforms and reducing poverty. In the recent past, agriculture has begun to make a significant contribution to the country’s development, bringing sweeping change to rural areas. The poverty rate fell from 58% in 2007 to 23.7% in 2011. However, there is a considerable risk that the Cambodian agricultural sector will remain a supplier of inferior agricultural raw products for neighbouring countries and that rural households that have just managed to rise above the poverty line will not be able to stabilise their economic situation.
The reasons why the rural regions and value chains are still not competitive include low productivity, a lack of diversification in agriculture and the rural economy, and limited access to services, high quality production materials and markets. The decentralised institutions lack the power and organisational capacity to orientate development measures around pro-poor objectives and to provide relevant services.
Objective
The rural poor have a larger share of the added value created in the market in Siem Reap. The benefits of growth are more evenly distributed, both socially and regionally.
Approach
The programme advises private and public decision-makers, bodies and stakeholders on developing and implementing measures that target economic growth and poverty reduction. The development of select value chains is linked to regional economic development and to training provided to support decentralised structures.
The programme comprises three components:
1.Regional management – multi-stakeholder processes and initiatives for regional economic development
2.Development of value chains and business services
3.Initiatives taken by local self-government towards poverty-reducing economic development
Results
The programme operates in all 11 rural districts in the province, directly reaching every sixth household.
Representatives of the public and private sectors and of civil society have developed joint initiatives for economic development and poverty reduction in all rural districts. Six districts have formulated regional development strategies. Thirty-six thematic working groups with 160 project groups and networks are currently implementing the initiatives. Examples of the issues addressed include improvements in rice cultivation and marketing, development of the bamboo industry, and promotion of rural tourism.
In contrast to the situation in 2007, when the programme started, high-quality production materials such as seeds, fertiliser and safe pesticides are now available in rural districts and communities. Dealers of agricultural materials, intermediaries and processing companies offer advice, market information and financing (embedded services).
Dialogues between farmers, traders, rice millers and agricultural authorities have resulted in several joint initiatives in the rice sector: trade agreements based on quality standards, campaigns to enhance the quality of rice and to encourage the use of improved, certified seeds. Improved cultivation techniques have increased the volume and enhanced the quality of commercial rice. The crop has increased by an average of 220%. Today, local rice mills are exporting rice from Siem Reap, formerly a loss-making province, to discerning markets such as the USA or Europe.
Since the programme was launched in 2007, the market share of local vegetables has more than doubled from 7% in 2007 to 17% in 2013.
123 new producer groups and farmers’ associations represent the interests of their members and offer innovative services, such as the joint marketing of their products. Seventeen savings and credit groups have mobilised more than USD 400,000 in savings deposits and offer financial services.
The Angkor Handicraft Association (AHA), which was created in 2011 with the support of the programme, has set up a souvenir market for local handicrafts, as well as a wholesale centre. The Association offers services such as representing members at trade fairs, developing new designs, training producers and advancing the interests of its members.
In January 2012, AHA introduced a designation of origin for local handicrafts. Thirty-seven companies use the ‘seal of authenticity’ to increase their share of the souvenir market which is still dominated by imports. Since 2009, there has been an increase of over 25% in the sale of local handicrafts and handmade functional items.
All 100 municipal councils in the programme districts have established local rules to improve the conditions for economic development, with more than 90 councils implementing several initiatives for economic development and poverty reduction.
Over 10,000 households attended courses on financial literacy. A survey one year after the courses revealed that there had been a marked improvement in the financial situation of more than half of the participants. 44% began saving regularly and 59% of the households that were in debt prior to the training are now debt-free.
In all, over 15,000 households were able to increase their annual income by almost 25%. The value of this annual increase is more than double the yearly costs of the programme.
Since 2008, the poverty rate in the rural districts has declined by almost one third – from 31% to 22% of all rural households.
Numerous successfully trialled programme approaches are being adopted across the country: as part of the decentralisation reform, in other provinces, and in a new course at the University of Agriculture.