







































Asian Themes in Social Sciences Research 
ISSN: 2578-5516 

Vol. 1, No. 1, pp. 1-9 
2018 

DOI: 10.33094/journal.139.2018.11.1.9 
© 2018 by the authors; licensee Online Academic Press, USA 

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© 2018 by the authors; licensee Online Academic Press, USA 

  

 
 
 

Review of Agriculture and Rural Development to Poverty 
Reduction in Cambodia: SWOT Analysis 
 
 
 

Rathny Suy1 --- Chakriya Choun2 --- Leaksmy Chhay3 

 

1School of Public Affairs, University of Science and Technology of China, Hefei, Anhui, 230026, China. 

 
2School of Public Administration, Central South University, Changsha, Hunan, China. 
3School of Management, University of Science and Technology of China, Hefei, Anhui, 230026, China. 
 

 
 

Abstract 

Agriculture contributes immensely to the Cambodian economy in various ways; namely, in the 
provision of food for the increasing population; supply of adequate raw materials to a 
growing industrial sector; a major source of employment; generation of foreign exchange 
earnings; and, provision of a market for the products of the industrial sector among others. 

This study aims to review the background of agricultural and rural development in 
Cambodia to do action in poverty reduction in rural society. This study used a descriptive 
design to provide SWOT analysis based on secondary data such as kinds of literature, 
government reports, and NGOs documents. 
 
 

Keywords: Agriculture, Rural development, Poverty reduction, SWOT, Cambodia. 

Licensed:  This work is licensed under a Creative Commons Attribution 4.0 License.  

 
 
1. Introduction 

Cambodia is situated in Southeast Asia and is also a low-income country in the region. Over two decades 
of war and conflict have left Cambodia becomes one of the poorest countries in the world, with extensive 
damage to its physical, social and human capital. The government has made significant efforts to rehabilitate 
the nation, with development partners taking an active part in development in various sectors (Farib, 2012).  

In Cambodia, approximately 80% of the population is placed in rural areas, and 71% depend primarily on 
agriculture (largely rice) for their livelihoods (World Bank, 2006). Agriculture accounted for 32% of GDP in 
2008 and employed 57% of the labour force in 2006 (Ngin, 2011; Ngo and Chan, 2010). Although the current 

economy is still contributed to significantly by industry (at 22% of GDP in 2008) and services (45% of GDP in 

2007), given that 30% of the populace are living in poverty (in 2007) and most of them are farmers in rural 
areas, an improvement in agriculture would seem the most effective approach in accelerating poverty 
reduction in Cambodia (NGOF, 2007; RGC, 2006; World Bank, 2006). Agriculture has also been identified as a 
key to diversifying the sources of economic growth, with the potential to reduce poverty, if focused on 

smallholders (CDRI-IDS, 2006). If growth in agricultural productivity can be enhanced by between 3% and 4 

%, the Cambodian Millennium Development Goal (MDG) on poverty targeted at 19.5% in 2015 could be 
achieved. 

Cambodia’s economic performance over the past decade has been impressive, and poverty reduction in the 

country has made considerable progress. Over the past 10 years, economic growth has averaged 9.7% per 

annum, while from 2004 to 2007, it averaged nearly 11.0%. At the same time, poverty has been reduced 

significantly (around 10 percentage points in a decade) and is still fall, from 35.0% in 2004 to 30.1% in 2007. 

Despite the main sources of growth being in non-agricultural sectors, agriculture still remains a large sector 

of the economy, comprising 32.5% of gross domestic product (GDP) and absorbing 59.0% of the total labour 

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force (ADB, 2010). Exports have increased from almost zero to 65.0% of GDP in 2007, slightly falling to 
52.7% in 2008 due to the impact of the global financial crisis (ADB, 2010). 

However, there is concern that this growth has not benefited from a large proportion of the population 
and that sustaining this rapid growth and reducing poverty will prove difficult. The policies required to 
sustain growth are different from those to initiate it, and experience from other countries shows that very few 
have managed to achieve sustained growth over the longer term (Dani, 2007). While global economic history 
shows that the process of development usually entails a shift from agriculture to manufacturing and services, 
the consensus for Cambodia is that in the short to medium term, poverty reduction will require growth in 
rural areas, most likely through sustained agricultural growth and the ability to capture value added from 
agro processing (Dani, 2007). 

Historically, agricultural diversification has been ineffective in Cambodia, but agro-industrialization and 
foreign investment appears to be increasing. Exports of raw agricultural products, such as cassava, maize, 
paddy, and soybeans to Thailand and Vietnam, are significant, although remain unrecorded. However, there 
are nascent signs of emerging rural enterprises in Cambodia concentrating on agroindustry, with the 
establishment of private rubber and cashew plantations, cassava starch factories for biofuel, and a rudimentary 
animal feed industry sponsored by CP Thailand. Further, over 2010–2011, reports of significant agribusiness 
investment pledges surfaced from Indonesia and Kuwait to develop Cambodia’s rice industry (i.e., close to $1 
billion in planned investments in irrigation, contract farming, and modern rice mills), and there are also 
indications that private equity firms are standing by to invest over $600 million in agribusiness. 

In recent years have made the country somewhat less aid dependent, and increasing levels of domestic 
savings have further deepened the country’s ability to sustain its own growth. For instance, savings have gone 
from 2.3% of GDP in 1998 to 30.3% in 2008 (ADB, 2010). Despite these generally positive signs, however, 
there is justifiable concern about Cambodia’s ability to seize the opportunities presented. A set of structural 
and institutional constraints to agricultural and rural development exists, which, unless addressed by 
appropriate interventions and policies will result in a slowing of economic growth and poverty reduction 
(ADB, 2012). This review paper aims to study on agricultural and rural development in Cambodia, and how to 
reduce poverty in rural areas. This study also provides SWOT analysis based on secondary data.  
 

2. Literature Review 
2.1. The Concept of Agriculture and Rural Development 

Concept of agriculture and rural development has been conceived as a response to the increasing external 
pressure on rural communities. Therefore, it is necessary to redefine identities, strategies, practices, and 
networks within the territory to overcome the current model of the organization by single commodity chains 
and sectors and redefine the territory as a competitive production unit based on economies of scope. 
Agricultural development, a subset of economic development, implies a sustained increase in the level of 
production and productivity over a reasonable length of time and the subsequently improved wellbeing of 
farmers as reflected in their higher per capita income and standard of living.  

MacRae, Hill, Henning and Bentley (1990) defined that the sustainable agriculture is at the same time a 
philosophy and a system of farming. It is rooted in a set of values that reflect an awareness of both ecological 
and social realities and a commitment to responding appropriately to that awareness. It emphasizes design and 
management procedures that work with natural processes to conserve all resources and minimize waste and 
environmental damage, while maintaining and improving farm profitability (MacRae, Hill, Henning and 
Bentley, 1990). 

The meaning of rural development has been the subject of much debate and little agreement. The 
definition of rural development has evolved through time as a result of changes in the perceived mechanisms 
or goals of development. The rural development as a process whereby concerted efforts are made in order to 
facilitate the significant increase in rural resources productivity with the central objective of enhancing rural 
income and creating employment opportunity in rural communities for rural dwellers to remain in the area 
(Olayide, 1981). According to Ploeg et al., (2000) explained that rural development is reconstructing the 
eroded economic base of both the rural economy and the farm enterprise, and represents the well -understood 
self-interest of increasing sections of the rural population (Ploeg et al., 2000). 

Rural development can be distinguished from Agricultural Development which it entails and transcends. 
Efforts by such governments to pump money into agricultural development did not yield the meaningful 
change desired hence, efforts should be made to include provision of modern infrastructure, primary health 
care, food and shelter, employment opportunities, recreational facilities, affordable and compulsory primary 
and secondary education, loans and other incentives, to be part of rural development for the benefits of rural 
dwellers (Olayiwola and Adeleye, 2005). From the foregoing, it is obvious that rural development is not a one-
off thing or an immediate and snap phenomenon. 
 
 
 
 



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2.2. Agriculture and Rural Development in Cambodia: An Overview  
Cambodia has great potential for agricultural development. In this regard, and faced by a number of 

extremely difficult challenges, government and development partners have made great efforts in relation to 
formulating and implementing policy and programming to accelerate development in the sector. This section 
presents an overview of the progress in agricultural development, the evolution of ARD policy, and the 
institutional arrangements for coordinating the task in the sector. 

Cambodia is a post-conflict country, and still emerging from two decades of war and civil strife (1970s and 
1980s) and a decade of internal conflict and unstable politics (1990s). First, the country transformed from a 
centrally planned to an open market economy in 1989, which resulted in major changes, such as the official 
recognition of private land ownership and the liberalization of trade, industry and transportation. Second, free 
market economy policy was officially adopted in 1993, simultaneous to the establishment of the Royal 
Government of Cambodia’s first mandate .  

The Cambodian economy has rapidly developed, with an average growth rate of over 9% in the last 
decade see Figure 1. The highest growth rate of 13.3% was in 2005 and was thanks to strong growth in 
garments, tourism and construction, and agriculture due to the blessing weather in the year (Hang, 2010). In 
2007, the economy continued to rise at 10.2% even during the critical period of the global economy. 
Notwithstanding, the GDP growth was contracted to 6.7% in 2008 due to the inflationary pressure from high 
oil and commodity prices (IMF, 2009; Tong and Hem, 2010) and to 0.1% in 2009 because of impacts from the 
world economic crisis. Cambodia is gradually recovering from the global economic crisis and the growth rate 
in 2010 was forecast at 5.5%. 
 

 
Figure-1. GDP Growth, 1994-2010. 

Source: Hang (2010); Ngin (2011). 

 
The recovery is chiefly owing to the re-emerging growth in industry (at 5.7% in 2010) and services (at 

2.4% in 2010) sectors, while agriculture grew at 2.3% in 2010, a downturn from 5.7% and 5.6% in 2008 and 
2009 respectively see Table 1. Growth in garment exports (over 21% in the first nine months of 2010 and 
estimated 15% in 2011) significantly attributes to the spur in the industrial sector (Hang, 2010). This pattern 
of economic growth highlights the central proportions of industry and services sectors in the GDP increase in 
relation to agriculture sector’s in the last decade see Figure 2.  
 

Table-1. Macroeconomic Indicators: 2008-2010. 

 2008 2009 2010 

GDP (nominal, $ million) 
GDP (per capita, in $) 
GDP (Growth rate) 
Agriculture 
Industry 
Service 

10,337 
738 
6.7% 
5.7% 
4.0% 
9.0% 

10,391 
731 
0.1% 
5.6% 
-2.5% 
4.6% 

11,304 
783 
5.5% 
2.3% 
5.7% 
2.4% 

Budget revenue (% GDP) 
Budget expenditure (% GDP) 
Overall deficit (% GDP) 

13.3% 
15.9% 
-2.9% 

11.8% 
20.4% 
-6.4% 

12.5% 
18.4% 
-5.9% 

Inflation (average) 19.7% -0.6% 4% 
Gross Foreign Reserves ($ million) 2,164 2,367 2,500 

     Source: Hang (2010); Ngin (2011). 



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Figure-2. GDP Share by Sector, 1993–2007. 

Source: NIS (2008); Tong and Hem (2010). 

 
The economic growth needs to be reflected in the employment of the labour force. As reported in Table 2, 

Cambodia is predominantly agrarian. In 1995, 81% of the labour force was involved in agriculture. 
Nonetheless, the percentage of employment in agriculture shrank to 57% in 2006 due to the mushrooming of 
garments industry since the early 1990s. Conversely, manufacturing and construction employed merely 3% of 
the labour force in 1995, but it rose to 14% in 2006 (Ngin, 2011). Likewise, the services sector has absorbed 
more labour force, surging from 16% in 1995 to 28% in 2006. This trend of labour force signifies that despite 
the dominance of agriculture its contribution to GDP is increasingly minimal; down from 46% in 1993 to 27% 
in 2007 see Figure 2. 
 

Table-2. Cambodian Employments by Sector, 1995–2006 (percentage). 

Year 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 

Agriculture 81 78 79 77 76 74 70 67 64 60 59 57 

Industry 3 5 5 9 6 8 10 11 12 13 13 14 

Service 16 17 16 14 17 18 20 21 24 27 27 28 
Source: IMF (2009); Tong and Hem (2010). 

 

3. Method 
This study used a descriptive design, by exploring some of the secondary data such as literature review, 

government report, and NGOs report that discusses about evaluate the SWOT analysis of agriculture and 
rural development in Cambodia. 
 

4. Discussion 
Agricultural development, a subset of economic development, implies a sustained increase in the level of 

production and productivity over a reasonable length of time and the subsequently improved wellbeing of 
farmers as reflected in their higher per capita income and standard of living. Sustainable national development 
through agricultural and rural development is generally concerned with the need for agricultural and rural 
development practices to be economically viable, their adaptability and flexibility over time to respond to the 
demands for food and fibre (both high and low). Because agriculture is affected by changes in market and 
resource decision in other sectors and regions, it is important that these changes do not provide a rationale for 
depleting the agricultural and rural resource base locally (Oni, 2008). This section discusses about SWOT of 
agriculture and rural development in Cambodia based on secondary data, so in Figure 3 showed about SWOT 
analysis was used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in any venture.  



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Figure-3. SWOT of agriculture and rural development in Cambodia. 

Note: This figure was created by authors based on secondary data. 
 
4.1. Strengths 

Agriculture sector is still contributing 37% to the GDP and employed about 67% of the workforce. The 
country has achieved agricultural production increased by 4.3% with a paddy harvest at record levels (about 
9.3 million tons). The country’s agricultural resources consist primarily of 3.7 million hectares of cultivated 
land, of which 75% is devoted to rice (FAPDA, 2014). 

In 2013, Cambodia exported a record level of 1.2 million tons of rice, accounting for more than 3% of the 
worldwide total rice exports. Cambodia’s economic performance over the past decade has been admirable, 
economic growth has averaged 9.7% per annum, while from 2004 to 2007, it averaged nearly 11.0% (ADB, 
2012). The fallout of the global financial crisis pushed GDP growth to almost zero in 2009 for the first time, 
but forecasts are for a return to higher positive growth in 2010–2011. At the same time, poverty has fallen 
(around 10 percentage points in a decade), going from 35.0% in 2004 to 30.1% in 2007. As a resul t of such 
economic development, income per capita increased from $250 in 1998 to $795 in 2008 (ADB, 2012). 

Cambodia has just re-entered the world market as a rice exporting nation, following a 30-year hiatus 
caused by war, political isolation, and a decimated agricultural sector. Given the country’s recent success in 
achieving surplus rice production, the Cambodian government is bent on expanding its production and export 
capacity and becoming a major rice export nation (USDA, 2010). Public statements by government ministers 
in the last year indicate that Cambodia wants to double rough rice production by 2015 to approximately 15.0 
million tons (9.45 million milled basis) and export 8.0 million (5.0 million tons milled rice) (USDA, 2013). 
Analysts from the USDA Foreign Agricultural Service (FAS), the Economic Research Service, and the U.S. 
Embassy in Phnom Penh investigated rice production prospects in Cambodia and the outlook for continued 
growth in the sector during recent travel in the country. 

It is generally believed that rice has been continuously cultivated in Asia for over 10,000 years, having 
been first domesticated in eastern India and the lowland plains of Southeast Asia. In Cambodia today, rice is 
the overwhelmingly predominant food crop, is grown on an estimated 2.3 million hectares or nearly 85% of 
the country’s total cultivated area. The lowland plain itself surrounds a very large wetland area, and includes 
Cambodia’s largest inland water body, Tonle Sap Lake or “Great Lake” (USDA, 2010). 

The Cambodian government recognizes that its goal of joining the ranks of the world’s major rice export 
nations will require the considerable additional development of its irrigation infrastructure in the heavily 
populated south eastern Mekong River floodplain and in the lowlands surrounding Tonle Sap, Cambodia’s 



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“great lake”. The Ministry of Water Resources and Meteorology (MOWRAM) has reported that they 
successfully brought approximately 650,000 hectares of rice area under irrigation between 1996 and 2007, and 
have plans and finance sufficient to irrigate an additional 800,000 hectares over the next decade. In total, 
MOWRAM acknowledged that it had received commitments totalling the US $1.1 billion for irrigation 
infrastructure development, with the additional US $850 million pledged in October 2009 from the Chinese 
government for the construction of dams (hydro), irrigation, roads, and port upgrades (USDA, 2010). 
 
4.2. Weaknesses 

In this section, the weaknesses have five main areas based on the framework of Hausmann, Rodrik, and 
Velasco (2005) to set of critical and binding constraints to poverty reduction, improved productivity in the 
rural sector, and improved private and public engagement in increasing value added see Figure 4. Basically, 
these critical constraints include: 1) low levels of technology adoption and human capital required to utilize 
such technology; 2) poor infrastructure (e.g., rural roads; irrigation; and post -harvest storage and handling, 
processing, transport, and logistics); 3) microeconomic risks to appropriation of returns (e.g., property rights, 
corruption, and the business-enabling environment related to taxation and fees); 4) difficulties in coordinating 
markets and marketing through formalized mechanisms of exchange; and 5) difficulties in accessing finance for 
agricultural investments, including the high cost of finance relative to the economic returns to investment in 
agriculture and agro-industry. 
 

 
Figure-4. Growth Diagnostics for Cambodia, Binding Constraints, and Interlinks. 

Source: ADB. (2012) based on Hausmann, Rodrik, and Velasco (2005). 
 

Many of these critical constraints are related. Unequal access to opportunities manifests itself in fewer 
educational opportunities for the poor and reduced health outcomes, which in turn are re lated to human capital 
constraints. The uneven playing field for the poor relative to the rich manifests in unequal access to 
infrastructure, productive assets such as land and credit, and policy outcomes that discriminate against the 
poor. 

The potential for agriculture as a driver for rural economic growth lies not so much in specific products or 
processes but in overall increases in efficiency arising from the removal of subsector-wide constraints. While it 
is important to address these constraints, this review points out that once land tenure, human capital, 
infrastructure, market access, and access to credit have been achieved, movement of smallholder farmers along 
the commercialization path to improved household incomes will occur only after the enabling environment of 
value chains have been addressed (ADB, 2012). However, it is clear that there are a few specific areas in which 
considerable benefits could be realized. 

Actions are needed to promote the use of modern technology in production and post -harvest storage 
processes; expand investment in agricultural research and development; strengthen rural infrastructure, 
particularly roads and irrigation drainage systems; develop markets and institutions; improve financially 
intermediation; and improve access to health and education services (ADB, 2012).  
 
 
 



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4.3. Threats 
Land Degradation: According to the UNCCD and WOCAT, takes many forms. The main forms in 

Cambodia are soil degradation, and deforestation, and consequent loss of biodiversity. The FAO study, 
Cambodia had the second lowest level of degradation (at 43%). However, this still involved about 7.7 million 
ha of land areas (FAO, 2014, 2016).  

Environmental Conditions and Disasters: Cambodia experienced extensive rainfall during the early wet 
season of 2013, which enabled timely planting of the wet season rice crop. However, heavy rain in September 
upstream of the Mekong Basin and in Cambodia caused flash floods and river flooding; affecting 20 provinces 
see Figure 5. Flooding has caused 168 death, affected 377,354 households and 139,000 hectares of wet season 
rice cultivated areas (of which 5,700 hectares were destroyed), as well as other infrastructures (Baran, 
Schwartz and Kura, 2009; Kim and Chem, 2014).  
 

 
Figure-5. Rice cultivated areas affected by floods. 

                  Source: Ministry of Agriculture, Forestry and Fisheries, Cambodia. 

 
Climate Change: Climate change is also another important threat hanging like a domicile`s word over 

Cambodian agriculture. The average temperature in Cambodia has been increasing since 1960 by 0.8°C, and 
with it, the frequency of unusually hot days and nights has increased as well. Further 0.3 -0.6°C increases are 
expected by 2025. Alternative estimates put the expected warming at 0.7 -2.7°C of the 2060s. Temperature 
increases will be more severe from December to June. All climate change models agree that rainfall in 
Cambodia will increase, but the magnitude of change is uncertain (Baran et al., 2009; Kim and Chem, 2014). 
 
4.4. Opportunities 

Rising global and regional demand for food will continue to provide markets for increased Cambodian 
exports, which will be facilitated by the continuation of market-oriented agricultural and trade policies (FAO, 
2014). Public investments will help continue to reduce the costs of doing business and attract private 
investments to create jobs. 

Some drivers underpinning future agricultural growth in Cambodia will be identical to those of the past. 
For example, GDP growth will increase domestic demand for more diverse food and encourage further 
outmigration of labor from agriculture (Kem, Chhim, Theng and So, 2011). Depending on the World Bank 
(2013), Cambodia’s GDP will continue to expand rapidly up to 2030, though at a slower pace (slightly over 
7%) than over 2000-2010 (8.2%). GDP is expected to grow in real terms from its present value of $13 billion 
to $23 billion by 2020, and to nearly quadruple to $50 billion by 2030 population growth expected to decline 
from 1.4% to 1.1% over this projection period, real GDP per capita would increase from $957 in 2012 to 
$2,733 by 2030 (Kean, 2012). 

Rising ASEAN and global demand for food will offer market outlets for Cambodian exporters, but 
penetrating foreign markets will be more challenging. The further increase in cross-border trade will require 
Cambodia to have an adequate capacity and network of agreements in place with major trading partners 
(especially China) for food safety and quality standards, double tax agreements, transit, and harmonized trade 
and commerce legislation (e.g., anti-dumping, labelling, trademark protection). Adequate physical and 
institutional infrastructure is needed to achieve such competitiveness, including more stable and cheaper 



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access to energy, improved transportation network and logistics systems, highly effective information and 
communication systems, and financial institutions to support trade and investment (Hang, 2010). 

National Strategic Development Plan, it is the Royal Government`s overall goal that is “poverty 
reduction and economic growth through enhancement of agriculture sector development”. This strategic plan 
always update the goal every five years to ensure food security, increase incomes, create employment and 
improve nutrition status for all people in local and global by productivity and diversification, and 
commercialization of agriculture with environmentally sound protection and food security (Kem et al., 2011). 
 

5. Concluding Remarks 
The Cambodian government has over the years formulated good agricultural but such policies have been 

found inefficient and ineffective since the intended results were not realized because the weaknesses of ARD 
have much than strengths. To reach the Millennium Goals of cutting hunger and poverty, agricultural growth 
must be handed over on top of the development agenda. In the future, the weaknesses and threats will be 
abolished. The best way that in order to facilitate rural development, the government should adopt an 
integrated rural development approach this is a multidimensional strategy for enhancing the quality of lif e of 
rural people. It is based on the assumption that the socio-economic fragment of the traditional rural system is 
obsolete, so integrated rural development strategies should be designed to change this framework and 
promote structural changes. The rural people should be deeply involved. There is needed for training and 
retraining of the rural people to enhance the dissemination of new skills and ideas on the establishment, 
management and skills of small-scale industries.  
 

6. Acknowledgments 
The authors would like to thank the anonymous reviewers and the academic editor of this journal for the 

invaluable comments and suggestions which have substantially improved the manuscript.  
 

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