MINISTRY OF COMMERCE

ASEAN AND INTERNATIONAL ORGANIZATION

DEPARTMENT

Cambodia’s Rice Export Promotion

in Post-WTO Accession

UNDER
TARP PROJECT SUPPORTED BY AUSAID

Research Team Leader: Mr. CHAN Bonnivoit

Research Team Member: Mr. KANN Viseth
Mr. YEM Sophal

Mentor: Mr. Michael YOUNG

2007
 TABLE OF CONTENTS

A. Introduction………………………………………………………………………………..1

B. Current structure of Cambodian rice exports (Mr. CHAN Bonnivoit, Mr. YEM
Sophal)……………………………………………………………………………………...3
1. International trade in rice……………………………………………………………………………..3
2. Past pattern of Cambodia trade in rice………………………………………………………………..6
3. Current patterns of Cambodian trade in rice (Thailand, Vietnam, USA and EU)……………………6
4. Export quantity and rice markets in South Korea, China, Japan and USA…………………………..8

C. Cambodia competitiveness for trade in rice (Mr. CHAN Bonnivoit)………………...11

1. Resource and factors endowments related to trade………………………………………………….11
2. Macro economic indicators affecting trade in rice: Price and Exchange rate………………………17
3. Policies promoting rice producers…………………………………………………………………..18
4. Policies on trade liberalization for trade in rice……………………………………………………..20
5. Cambodian rice trade policy under WTO Agreement on Agriculture (AOA)……………………...21
6. Cambodia commitments to regional trade arrangement and bilateral trade agreements……………25
7. Cambodian rice trade facilitation……………………………..……………………………………..28

D. Market access of Cambodian rice export (Mr. KANN Viseth)………………………..29

1. Multilateral commitments under the WTO Agreement on Agriculture……………………….........29
2. The Doha development agenda……………………………………………………………………...30
3. Current WTO agriculture negotiation……………………………………………………………….31
4. Preferential market access and ASEAN + arrangements……………………………………………31
5. Tariff and non-tariff barriers………………………………………………………………………...34

E. Domestic constraints and market linkage (Mr. YEM Sophal)………………………...42

1. Organization related rice production………………………………………………………………..42
2. Rice processing and quality issues…………………………………………………………………..44
3. Farm-market linkages……………………………………………………………………………….45
4. Transportation and warehousing costs……………………………………………………………...46
5. Rice Marketing……………………………………………………………………………………...47

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F. Political or instrumental options to promote the rice export (Mr. CHAN Bonnivoit,
Mr. YEM Sophal and Mr. KANN Viseth)………………………………………………48
1. Domestic competitiveness………..…………………………………………………………………48
2. Domestic constraints and market linkage…………………………………………………………...51
3. Market accesses……………………………………………………………………………………..52

G. Conclusion………………………………………………………………………………..53

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 ABBRAVIATION

AFTA ASEAN Free Trade Area

ACFTA ASEAN-China Free Trade Area
AMS Aggregate Measures Supports
AOA Agreement on Agriculture
AQSIQ General Administration of Quality Supervision, Inspection and Quarantine
ASEAN Association of South East Asian Nation
CARDI Cambodian Agricultural Research and Development Institute
CCC China Compulsory Certification
CCIB China Conformity Inspection Body
CDC Council for Development of Cambodia
CEDAC Centre d’ Etude et de Development Agricole Cambodgien
CEPT Common Effective Preferential Tariff
CIF Cost, Insurance and Freight
CLMV Cambodia, Laos, Myanmar and Vietnam
CSE Consumer support estimates
CSQ Country Specific Quota
DDR Doha Development Round
DF & QF Duty Free & Quota Free
EPA Economic Partnership Agreement
EU European Union
FAO Food and Agriculture Organization
FOB Free on Board
GATT General Agreement on Trade and Tariff
GDP Gross Domestic Products
GTC Green Trade Company
HS Harmonized System
HYV High Yielding Varieties
ICC International Chamber of Commerce
IMF International Monetary Funds
IPM Integrated Pest Management
ITC International Trade Center
JICA Japan International Cooperation Agency
KIEP Korea Institute for International Economic Policy

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MAFF Ministry of Agriculture, Forestry and Fishery
MFN Most Favored Nation
MMA Minimum Market Access
MOFCOM Ministry of Commerce (China)
MOWRAM Ministry of Water Resource and Meteorology
NFIDCs Net-Food Imported Developing Countries
NDRC National Development and Reform Commission
NGO Non Government Organization
OECD Organization for Economic Cooperation and Development
PSE Producer Support Estimates
RCB Registered Certifying Body
RGC Royal Government of Cambodia
ROCB Registered Overseas Certifying Body
SAC Standardization Administration of China
S&D Special & Differential
SGS Societé General de Surveillance
SPS Sanitary and Phytosanitary
SRI System of Rice Intensification
TBT Technical Barriers to Trade
TIFA Trade and Investment Framework Agreement
TRQs Tariff Rate Quotas
UNCTAD United Nation Conference for Trade and Development
URAA Uruguay Round of Agreement on Agriculture
USAID U.S. Agency for International Development
USDA United States Department of Agriculture
US United States
VAT Value-Added Tax
WFP World Food Program
WTO World Trade Organization

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 TABLES

Table 1 Import and export of rice and fertilizer 1993-1999……………………………………6

Table 2 Cambodia’s annual rice export………………………………………………………...7
Table 3 Cambodia’s annual rice import………………………………………………………...8
Table 4 Area Cultivated, Yield and Production of Paddy: 1993-2004……………………….13
Table 5 Agricultural productivity in Cambodia is the lowest in the region (2003)…………...13
Table 6 Land size and profit…………………………………………………………………..14
Table 7 Estimated production cost of Neang Mali……………………………………………15
Table 8 Labor productivity in rice sector between Cambodia, Vietnam and Thailand……….15
Table 9 Goods subject to import licensing……………………………………………………29
Table 10 Schedule of tariff rate of new members of ASEAN………………………………….26
Table 11 ASEAN and Korea FTA preferential tariff rates for ASEAN-6……………………...32
Table 12 ASEAN and Korea FTA preferential tariff rates for Cambodia, Laos and Myanmar..33
Table 13 List of rice products with tariffs in China, Japan, South Korea and USA……………35
Table 14 Allocation of MMA for 2005-2014, Country calendar specific quota……………….36
Table 15 Paddy to milled rice conversion rate…………………………………………………45

---------------------------------------------------------------

FIGURES

Figure 1 World rice trade………………………………………………………………………..5

Figure 2 Producer support estimate and Consumer support estimate for South Korea…………9

6
A. Introduction
Rice plays an integral role in the economy of Cambodia. Over 80 percent of Cambodian
farmers cultivate rice, primarily through traditional farming practices. For most of these farmers, rice is
the major source of income and sustenance and thus is of critical importance in the formulation of any
type of agricultural policy.
Now the rice production in Cambodia has increased rapidly in the last year decade due mainly
to improved productivities and area expansion. Cambodia has developed into a net exporter of rice and
nearly all exports are unofficial border trade with Vietnam and Thailand. Cambodia is currently a
competitor in the world rice market in the sense that it exports paddy rice for milling in Vietnam, which
is then re-exported onto the world market.
As food security concerns, are becoming resolved, attention is shifting to seed selection and
post harvest practices to increase productivity and deliver more consistent quality for storage and
processing. Furthermore, Cambodia has a high potential to further increase rice production as well
export because it still has a lot of idle land that can be converted to cultivated area and there is room to
increase productivity and export through increased use of appropriate technology, improved irrigation
systems, reformed and managed domestic legal framework, and liberalized the market access etc.
But the rice sector still faces yet a number of important constraints in Cambodia. Agricultural
productivity remains low compared to other countries in the region, with yields averaging barely 2
tones per hectare. Economic returns to labor from rice production are much lower (less than half) than
rates generated from production of vegetables, soy beans, mung beans, cassava, sweet potato, tobacco
and cotton.
On the input side, land use is a key issue for rice and for agriculture generally. About 1.2
million hectares of agricultural land is currently unused. A new land law was legislated in 2001 to
clarify title, resolve disputes and build the foundations for efficient land markets and for using land as
collateral in financial transactions. Much needs to be done to bed this law into everyday practice. It
needs to be disseminated throughout the country and understood, supported and implemented by
individuals and local administrators.
Transport costs are high partly because of the nature of the terrain and the quality of roads
where the solutions lie in planning and building transport infrastructure. It is also a causing that some
areas are become a food exporter while others are reported to be in food deficit.
A Federation of Rice Millers has recently been established with a view to building relationships
with farmers to provide them with the information, capacity and incentives to deliver more consistent
quality rice. There has been extensive research and development in rice through a government research
institute like Cambodia Agricultural Research and Development Institute (CARDI). While many
varieties have been produced, dissemination throughout the country has been limited. The research
emphasis is now switching from yield to quality and to post harvest management. Farmer extension
7
services provided by the RGC and NGOs are reasonable because of lack on the resources and capacity,
and there is an important policy question regarding the best way of transferring information to farmers.
Few rural businesses including farmers have access to formal sources of finance. Branch
banking is still expensive, incomes are low and collateral is not well specified. Farmer processor
contracting is emerging as a basis for credit security. Fertilizer subsidies were abolished in 1997 and
now most inputs are supplied by the private sector. The government remains involved in food aid
distribution in which a state enterprise, Green Trade Company (GTC) is responsible for purchasing rice
on behalf of the state including the purchase and storage of rice for food security purposes. While no
formal quotas or taxes apply to rice exports, exporters are required to obtain a permit. No official
charges apply to these licenses but ‘facilitation fees’ are apparently required. Such ‘irregularities’ are
reported to be a major constraint on exporting rice from Cambodia.
The rice processing and distribution sector faces a number of key constraints. Milling
technology is often outdated, resulting in high levels of broken rice. Furthermore, millers are
fundamentally constrained by a lack of working capital that limits their ability to purchase paddy from
farmers and update machinery. This contributes to the unofficial export of paddy to regional markets
such as Viet Nam and Thailand and prevents Cambodia from capturing the value-adding and creating
the jobs for the domestic people from rice milling. The lack of capital also perpetuates the low levels of
technology implicit in the sector. Institutional and infrastructural constraints also impede the sector.
High costs in the provision of credit dampen private investment by farmers and millers, forcing farmers
to seek unofficial sources of credit from moneylenders, often at usury interest rates, and millers to delay
or reduce investments. Poor infrastructure, in the form of roads and irrigation dampen production
incentives and reduce market access. Unofficial costs, in the form of checkpoints and port fees,
unnecessarily raise the costs of rice for Cambodian consumers and lower the competitiveness of a
bourgeoning, high-value niche export market.
The membership of Cambodia in the WTO will affect policy in two areas: First, steps will have
to be taken to bring Cambodia’s legal and institutional framework into conformity with WTO rules.
Second, Cambodia will be called upon to make commitments on market access in area of trade in good
and trade in services. Of course, Cambodia has access to the markets of our ASEAN neighbors, which
consist of 550 million consumers, but economic conditions and products are alike and these create some
difficulties for Cambodia to export as much as possible to these market. Furthermore, Cambodia wants
to extend and integrate its economic into the world economic system. Therefore, it is necessary for
Cambodia to look through the WTO membership at the world market as a whole to find better
comparative advantages for its products, especially in the US, EU, Japanese, South Korea and Chinese
markets. The agreement on agriculture provided many benefits to Cambodia. The agreement required
member countries to eliminate non-tariff barriers, transfer them into tariff barriers and gradually reduce
them. As a least developed country, Cambodia may maintain import tariffs on agricultural products and
8
high levels through accession negotiations. This factor provides a better possibility for Cambodia to
expand its export agricultural products and attract investment in this area as well. WTO Agreements
and the result of the current WTO negotiation provide an S & D to least developed Counties with longer
time to prepare to implement WTO agreements, technical assistance to upgrade the commercial legal
framework and capacity, and DF & QF to adjust the production- and trade structure.
Although facing some problems as described above, Cambodia is still expected to play a more
important role in the global market in the next decade when improved yields and area expansion will
efficiently reduce the costs of its exportable surplus, and other components and constraints related to the
rice export will be effectively improved. Therefore, it would seem that the improvement or some
changing of policies and instrumental options to promote Cambodian rice export is very significant for
the challenges described above. Regarding to the issues faced and the WTO membership of Cambodia,
our research project aims to develop the policy or instrumental options in order to promote Cambodian
rice trade in the time of its WTO post-accession. Base on the aim of the research, our research will try
to identify the Cambodian competitiveness for trade in rice, the market accesses of Cambodian rice and
the constraints of Cambodian trade in rice, and the last and significant objectives of the research project
is trying to find out a political framework or instrumental options to be implemented in promoting the
rice export.
Relating to our objectives, the research project will separate in 5 components. For the first
component we will try to identify the structures and conditions of Cambodian trade in rice which show
only the current picture of the Cambodia rice export and import. Second component is a significant
component for the research project because of concerning with the research of current production
structure and trade structure of the rice sector of the country. Otherwise it can be said that we will try to
assess the Cambodia competitiveness for trade in rice. The third will be assessed the market accesses of
some countries like USA, Japan, China and South Korea which we select as our exporting targeted
countries for Cambodian rice export in the future. The forth component will be analyzed the current
constraints of Cambodian trade in rice which can be occurred by the nature and the failure or mistake of
the implementations and planning. The last one which plays a significant role in the research project
will try to identify or to improve the political framework or instrumental options in order to promote
and to strengthen Cambodian rice exports for the future.

B. Current structures of Cambodian rice exports (Mr. CHAN Bonnivoit, Mr. YEM Sophal)
1. International trade in rice
World rice export
The world rice market is characterized by the small share of trade relative to total production.
Even though rice production is around 400 million tons, only about 25 million tons are traded
internationally (6 percent of total production). Most of rice production in the world occurs in Asia and
9
in most Asian countries rice produced is consumed domestically. Moreover, the US is the only major
exporter that is not in Asia.
Exports from many of the major rice producers are projected to increase as demand for rice
rises and nominal prices strengthen. Thailand is projected to remain the world’s largest exporter, but
with export growth - projected around 2 percent a year - slower than in the 1980’s. India is expected to
eventually recover from its recent drop in exports from its peak of 4.2 million tons achieved in 1995,
with exports starting to expanding again by 1999, and then reaching nearly 3.3 million tons by 2005.
India is projected to rank number 3, after Thailand and Vietnam from 1998 to 2004, and then overtake
Vietnam as number 2 after 2004. Vietnam also is expected to remain a large exporter - ranking number
2 from 1997 through 2004 - but exports are projected to dip below those of India after calendar 2004.
Burma is projected to expand exports after 1997 - and except for 2000 - through 2005. Similarly,
Pakistan is projected to generally expand exports after 1998, rising from 1.5 million in 1999 to over 1.6
million by 2005. Both countries will slip slightly in importance as India’s importance rises. Only
Australia, China, and the United States are likely to be viable long run sources of japonica rice to meet
Japanese and South Korean import requirements under the UR agreement. At the same time, new
exporters such as Cambodia and Myanmar might start to play a more important role in the world rice
export.

World rice import

In contrast to exporters, there are many importers, each with a small share of total imports.
Importers are distributed in many different parts of the world. In addition, rice import growth will be
fueled by the needs of China, Indonesia, the Middle East, and Central America and the Caribbean.
Indonesia is expected to be a steady net rice importer, but its imports are projected to decrease over time
as consumption growth slows and yields continue to rise. China is also projected to be a net importer of
rice. Developing countries, particularly in Asia, will continue to account for the bulk of the gains in
import demand (Figure 1).

10
Figure 1: World rice trade (Source: Economic Research Service / USDA, 2005)

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 2. Past pattern of Cambodia trade in rice
Exports of rice from Cambodia have increased in recent years. Between 1990 and 2000
official exports of rice and paddy have been minimal (Table 1). These data do not tell the whole story,
as there are disparities in export statistics collected by different government agencies involved in
regulating the export trade. JICA identified two exporters who exported 54,000 tones of rice in 2001-
2002 when official exports only identified 6,000 tones of rice in total.
While production has been increasing over this period, the low level of exports has meant
that, firstly, reliance on food aid has been dramatically reduced. Secondly, the amount of rice available
for domestic consumption has increased, potentially increasing the number of calories available.
Thirdly, surplus production has been diverted from domestic mills to foreign mills through unofficial
exports of paddy into Thailand and Viet Nam. It estimates that in 2001 approximately 10 percent of the
rice marketed domestically was exported officially (nearly 60,000 tones), and 33 percent of the paddy
sold by farmers was exported unofficially (over 450,000 tones). The majority of the rice is exported by
private firms, who provide high-quality, single variety rice to niche markets in Europe, North America,
the Middle East, Singapore, Malaysia, China and Australia. Cambodian rice obtains a price premium
above standard Thai rice of around US$80-90/tonne.
Imports of rice into Cambodia are small but significant. The major official imports of rice
have been food aid rice imported under supporting of the World Food Program. These were 44,000
tones in 2001, substantially up on previous years. In addition, up to 120-135,000 tones of Thai Jasmine
rice are imported unofficially for urban consumers in Seam Reap, Phnom Penh and the surrounding
areas.

Table 1: Imports and Exports of Rice and Fertilizer - 1993-1999

Port Flow Item 1993 1994 1995 1996 1997 1998 1999

White Rice 18640 11622 6573 - - - -

Imports
Phnom Penh Fertilizer 10954 - 245 - - - -
Exports Paddy - - - - - 16615 -
Imports White rice 10449 18867 36685 23540 6952 16615 10889
Sihanouk Ville Fertilizer 23898 28438 29809 8839 - 24043 -
Exports Paddy - - - 2611 - - -
Imports White Rice 29089 30489 43258 23540 6952 16615 10889
Fertilizer 34852 28438 30054 8839 - 24043 -
Total Exports Paddy - - - 2611 - - -

Source: Japan International Cooperation Agency 2001

3. Current patterns of Cambodian trade in rice (Thailand, Vietnam, USA and EU)

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Rice Exports
Since Cambodia's accession to the WTO on 13 October 2004, the Government takes the effort
to formalize the country's largely informal trade activities and create the legal, and reform the
administrative frameworks necessary to ensure greater trade facilitation. This is to enable the country to
take greater advantage of its newfound access to international markets. The range of products which
Cambodia has available for export is limited, but to widened participation in international trade it is
likely to come only through the export of rice (Cambodia’s Pathways to International Trade-www.
aseanfocus.com). Cambodia has exported rice more than 1 million tons every year ( Cambodian Prime
Minister in the occasion host Vietnamese Prime Minister ), primarily in exporting form through
informal cross-border exchanges with Thailand and Vietnam, while Cambodian producers and rice
millers cannot effectively compete with the highly efficient and subsidized rice markets of neighboring
countries. Cambodia rice trade is fluctuated. It depends on the amount of surplus rice productions.
Cambodia has produced a surplus amount of rice reaching as much as 500,000 tons every year since
1995.
Despite the national rice self-sufficiency achieved by the country since 1995/1996, Cambodia
has officially exported very little rice. The key destinations of rice earlier exported by Cambodia are
Singapore and other ASEAN countries. More recent export destination points include Hong Kong and
Europe, although there are no current statistics available on how much (Table 2).

Table 2: Cambodia’s Annual Rice Exports (Volume and Value)

Year Exports

Volume (in ‘000 tons) Value (in million US$)

1995 - -
1996 5.6 0.93
1997 3.6 0.95
1998 0.6 0.15
1999 2.2 0.45
2000 0.6 0.18
2001 1.5 0.48
2002 3.8 1.69
2003 3.0 1.46
Source: International Rice Research Institute, Rice Facts, 2005

Rice Imports
Even though Cambodia has reached a rice self-sufficient level and became a rice exported
country, Cambodia still continues to import milled rice to fulfill the needs of domestic consumption.
Most rice imports of Cambodia are actually food aid, free import duties, brought in by donor agencies
and international organization for humanitarian purpose. Outside of food aid, principally come from
Thailand and Vietnam (Sik Boreak, op cit). High-income urban consumers in major urban centers such

13
as Phnom Penh and the expatriate communities around the country are said to have a preference for the
Thai jasmine rice varieties. A proof to this is the fact that supermarkets and groceries in Phnom Penh
and Siem Reap carry a large number of imported Thai rice brands in their shelves. Restaurants in key
urban centers are known to mix Thai rice varieties with local varieties to improve overall fragrance and
eating quality. There are no available officials statistics on how much of the formal imports came in as
food aid and which portion comes as commercial imports.

Table 3: Cambodia’s Annual Rice Imports (Volume and Value)

Year Imports
Volume Value
(in ‘000 tons) (in million US$)
1995 81.0 24.50
1996 26.0 7.57
1997 27.6 2.80
1998 39.2 7.40
1999 36.4 7.90
2000 60.6 8.94
2001 53.3 7.51
2002 123.6 11.02
2003 77.1 6.20
Source: International Rice Research Institute, Rice Facts, 2005

4. Export quantity and rice markets in South Korea, China, Japan and USA
South Korea: South Korea, a major food-importing country, has tried for more than three
decades to strengthen its own agricultural production and avoid imports. The two major goals of South
Korean agricultural policy are self-sufficiency and parity between farm and urban household incomes.
The Government uses strong producer price incentives and import barriers to achieve these dual goals.
Domestic production of rice, barley, corn, soybeans, and tobacco is subsidized to varying degrees. High
import barriers protect rice, barley, vegetable, fruit, and livestock farming. Imported inputs such as
wheat, feed grains, oilseeds, hides, and cotton, however, are allowed easy access.
The Organization for Economic Co-operation and Development (OECD) calculates producer
support estimates (PSEs) that measure the proportion of farm output value attributable to government
support. For South Korea, the aggregate PSE for major farm commodities is always over 50 percent.
The consumer support estimate (CSE) is always negative, representing an implicit tax on consumers
caused by government programs that support producers. As a percentage, it represents the size of this
implicit tax relative to consumer expenditures on foods. The aggregate CSE for South Korea is highly
negative, suggesting that the implicit tax is equivalent to more than 50 percent of consumers'
expenditures on major foods.

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Figure 2: Producer Support Estimate and Consumer Support Estimate for South Korea

Today, Korea produces close to five million tons of milled rice for consumption annually.
Farmers produce more than 170 varieties of short grain rice, and over 1,900 different rice brands exist
in the domestic rice market. Rice consumption per person rose sharply throughout the 1960s and 1970s,
but has fallen in recent years due to changes in eating habits. Faced with the current problem of
declining rice consumption among its population, the Korean government has tried to revise its
domestic rice policies to support farm incomes while simultaneously encouraging farmers to reduce the
areas where rice is planted. Despite the pattern of government practices in the past, both international
and domestic pressures are currently pushing the rice market to liberalize. In 1994, the WTO set Korea
on a 10-year path in which Korea was scheduled to gradually increase the level of rice imports. In turn,
the Korean government began changing domestic policies to prepare the rice market for liberalization
by encouraging farmers to reduce production and plant higher quality varieties. In 2004, Korea received
a 10-year extension to continue the Minimum Market Access Import Quota for imported rice (seeing
more at the component 3 of the research).

China: The Country has the world’s largest agricultural economy and one of most varied. The
nation stands first among all others in the production of rice, cotton, tobacco, and hogs and is a major
producer of wheat, corn, millet, tea, jute, and hemp. This wide range of crops is possible because of the
country's varied climate and agricultural zones. China participates on a large scale in international
agricultural markets, both as an exporter and as an importer.

15
 China Custom’s figures show that China’s imports of rice in calendar year 2002 dropped by
nearly 20 percent to 240 TMT. Nearly all rice imports are Thai fragrant rice. Thai fragrant rice is mostly
consumed in Southern China. Demand elsewhere is limited. Many locally bred fragrant rice varieties
are finding their way onto the domestic marketplace. As quality of domestic rice varieties improves,
Thai rice is becoming less competitive. Accordingly, the full tariff-rate quota for rice imports was far
from being filled in 2002. Traders expect this anemic import volume for Thai fragrant rice to continue
in 2003, if, as they expect, the current gap between Thai and local fragrant rice prices continues. Trade
in figures per Imports, 2002 MY ended up showing Thailand as biggest source of 232,484 mt. It is
followed by Taiwan of 5,000 mt, Laos of 200 mt, Myanmar of 150 mt, Hong Kong of 28 mt. 3 mt were
imported from Netherlands, 2 mt from Germany, while US, Philippines and Vietnam did not conclude
business with China in MY 2002. In contrary Indonesia and Japan MY 2002 are on Buyers list for
Chinese rice. Exports figures show Ivory Costs as biggest consumer of Chinese rice with 739,676 mt.
Followed by Indonesia with 243,349 mt, Russia with 217,348 mt, Cuba with 216,282 mt, Japan with
101,625 mt, North Korea with 73,130 mt, South Korea with 70,775 mt, Libya with 62,998 mt,
Kazakhstan with 44,884 mt. All other countries are showing 213,042 mt exported quantity. In total, we
have 1,983,109 mt.

Japan: Rice has long been one of Japan's most protected domestic markets. A combination of
restricted market access, high tariffs, and farming support via subsidies and production controls
contributes to a situation in which the Japanese consumer pays around 12 times more per kilogram of
rice than US consumers. While often criticized as an unfair burden on the Japanese consumer, more
people in government are now beginning to realize that the Country has gone out on a limb with its rice
policy and that the nation's notoriously inefficient rice farmers can't continue to be supported forever.
For 2004 alone, the Japanese government is said to have spent some Y5.283 trillion (US$47 billion) on
support for the farming sector, at a time when the Government is striving to reduce public expenditure
in other areas and hiking taxes. A recent OECD (Organization for Economic Cooperation and
Development) report recently showed that around 1.4% of gross domestic product (GDP) goes toward
agriculture support in Japan, and that a massive 80% of rice farming receipts is derived from
government payments.
Recently, Japan relies most heavily on domestic subsidies, although quota and tariff policies are
also in effect (Seeing more at the component 3 “Market Access of Cambodian Rice Export” of the
research). The most recent information available indicates that the Japanese government directly
subsidizes rice production by as much as $1.82 billion (206 billion yen) (Fukuda, Dyck, & Stout, 2003).
Japanese subsidies come via a number of different government programs. The most direct subsidy
program, called the Japanese Rice Farming Income Stabilization Program, was implemented in 1998.
The Income Stabilization Program allows for rice farmers to claim payments equal to the difference of
16
domestic rice prices and a predetermined standard, should the market price fall. In 1999, such payments
totaled $815 million (92.7 billion yen). On a per-hectare of production basis, Japan’s subsidy is
enormous, over 12 times that of the US and EU subsidies combined. Figure below illustrates the export
and the market of rice in Japan.

United State of America: For nearly a century, one of the primary goals of agricultural policy
has been to protect farmers against unprofitably low market prices while maintaining an abundant and
stable food supply for consumers. For commodities like rice, which is severely impacted by
interventionist policies enacted by foreign governments, the need for US policy to provide a stabilizing
balance to markets and a reliable planning horizon for producers is especially great. The USDA has
administered various price-and-income support programs for rice farmers for decades, and the Farm
Security and Rural Investment Act of 2002 (2002 Farm Act) continues to provide rice producers with a
safety net based on direct payments, counter-cyclical payments, and marketing loan benefits.
The domestic market is the primary outlet for U.S. rice, accounting for almost 60 percent of
total use. As recently as 1980, the bulk of US production was exported (63%), but in recent years
domestic use has grown sharply (up nearly 36% since 1990) while growth in exports sales have lagged,
resulting in a slow but steady decline in the proportion of total production exported. Although export
sales have been declining modestly as a proportion of total US rice production, exports nevertheless
remain an important market for US rice and contribute significantly to a positive US trade balance and
the total value of agricultural exports for rice producing states. With total US rice exports valued at over
$1 billion in 2003 (down from $1.1 billion in 1999) this accounts for nearly 3% of the total value of all
US crop exports, with Arkansas alone accounting for $452 million in foreign sales, or 45% of all US
rice exports.

C. Cambodia competitiveness for trade in rice (Mr. CHAN Bonnivoit)

1. Resource and factors endowments related to trade
Cambodia is richly endowed with land, as well as substantial natural resources, notably forests
and fisheries, and a wide variety of natural habitats and ecosystems, including upland and lowland
forests, freshwater wetlands, and diverse riverside areas which provide a big advantage for the rice
producers as well the rice suppliers of the Country. In the last decade, the contribution of agriculture to
overall economic growth has come largely through accumulation of factors of production-land and
labor-as part of intensive and extensive growth of activity, with only modest improvement in
productivity from very low levels. Rice production is also still the overwhelmingly predominant crop
for the agricultural economic of the Country, but some diversification and regional specialization may
be emerging as farmers take the advantages from the agro-ecological characteristics of different
agricultural systems and of market opportunities of the Country.

17
Land allocation patterns
The proportion of rural households lacking land for cultivation has risen from 13 percent in
1997 to 16 percent in 1999 and 20 percent in 2004. This rise in landlessness is relatively rapid given
that distribution was more-or-less equal (relative to household labor) when land was formally allocated
to households in 1989. A significant proportion of the landless have never owned land, because they
returned from refugee camps in 1993-94 and newly formed households headed by young married
couples. Population growth leads to smaller plot sizes in densely populated areas, and a proportion of
households sell land, either as a deliberate strategy to raise money to invest in non-agricultural
activities, or less positively to meet critical consumption needs. Finally, a small important component of
total landlessness is due to land grabbing. The problem is exacerbated by the interconnected problems
of unclear property rights (as much as 80 percent of rural households that owned land were without land
titles in 2004), and this ambiguous legal status of ownership is notwithstanding for the increasing value
of land in many parts of the country.

Rice growing seasons, cropping, intensity, harvest area and yield

The main types of paddy production systems are upland and lowland rain fed rice, deep water
floating rice and dry season rice. Wet season rice is grown from May to December while dry season rice
is grown from December to March. Dry season rice is usually improved varieties of rice like IR66 and
grown only for cash income purposes. In contrast, wet season rice is usually traditional varieties
cultivated for subsistence and food security purposes. Even though traditional wet season varieties have
a lower yield, they fetch a higher price as the quality and taste is better than the dry season improved
varieties.
There has been improvement in rice yields per hectare, with wet-season yields growing by 14
percent over the last five years (specifically, to account for annual climatic fluctuations, we calculate
average yields for two periods 1997/98 – 1999/00 and 2003/04 -2004/05). Despite the improvement,
Cambodia still has one of the lowest levels of rice yield among East, Southeast and South Asia (Table 4
and 5).

Table 4: Area Cultivated, Yield and Production of Paddy: 1993-2004

TOTAL
Year Cultivated Area Harvest Area ‘000 Ave. Yield Production
‘000 has. has. Tons/ha ‘000 tons
1993 1,856.6 1,823.6 1.31 2,383.4
1994 1,924.0 1,494.6 1.49 2,223.5

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1995 2,086.0 1,924.0 1.79 3,447.8
1996 2,170.9 1,864.0 1.83 3,404.0
1997 2,076.0 1,928.7 1.77 3,414.9
1998 2,094.7 1,962.6 1.79 3,509.9
1999 2,157.6 2,079.5 1.94 4,029.6
2000 2,157.5 2,079.4 1.94 4,049.9
2001 2,241.0 1,903.2 2.07 4,099.0
2002 2,137.1 1,994.7 1.92 3,822.1
2003 2,314.2 2,242.0 2.1 4,710.9
2004 2,346.9 2,108.8 2.0 4,170.3
Source: Statistical yearbook 2005-Page223

Table 5: Agriculture productivity in Cambodia is the lowest in the region (2003)

Crop yields (kg/ha.)
Items Rice Maize Cassava
Cambodia 2,150 2,111 6,318
China 3,849 3,485 16,249
Lao PDR 3.316 2,333 19,762
Vietnam 4,634 3,225 14,066
Indonesia 4,538 3,252 14,902
Thailand 2,455 3,913 17,552
Malaysia 3,178 - 9,737
Source: FAO, World Development Indicators.

Classification of rice farming households and returns

Rice covers most of the cultivated area (84 percent) and makes major contributions to
agricultural GDP (22 percent) and to agricultural exports too. The average farm size among the rural
poor in Cambodia is 1.5 ha. However, 40 percent of the rural population lives of less than 0.5 ha -
sufficient to meet only about half of the per capita (milled) rice requirement of 165kg/year (Table 6).

Table 6: Land size and rice profit

Indicator Cambodia

19
 Average landholding size 1.71
Average size of cultivated rice land (ha/household) 0.99
Average household size 5.3
Size of cultivated rice land by the poor (ha/household) less than 1 ha
Rice production gross margin on labor ($/ha) 49
Rice production gross margin, including labor (US$/ha) 147
Source: Goletti, Bhatta, Srey, 2002 and ACI, 2002.

Return per hectare of rice ranges between US$100 and US$250 for the farmers. For the poor,
rice provides a smaller share of total income than for the average rice farmer. Most of the poor in the
country grows traditional rice varieties that, unlike modern high yielding varieties (HYVs), can thrive
on poor land with few modern inputs. These varieties usually fetch higher prices than HYV rice,
because their quality is better and local consumers prefer them. Poor households depend on paddy for
three-quarters of their (gross) annual revenue from agriculture. Even at the provincial level, it is evident
that except in Kampong Cham (and Phnom Penh), revenue from rice constituted three quarters or more
of total agricultural revenue in the provinces.

Rice production input and costs

Production of rice constitutes approximately 50% of the overall value adding activity. Such
activities are segmented into 6 areas: land preparation; seed; transplanting; fertilizer/manure; agro
chemicals; and harvesting (Table 7). As Table 7 indicates, fertilizer and manure account for the highest
cost during the production phase. For premium fertilizer, farmers must pay approximately 1,000
Riels/kg. On the other hand, cheaper variety of fertilizers are also readily available through local traders
costing anywhere from 700 – 800 Riels/kg. Interviews with farmers suggest that cheaper fertilizers tend
to be relatively ineffective and maybe contributing to anywhere from 25 – 35 percent reduction in yield
per hectare. If farmers had access to high quality fertilizer, this would contribute a savings of about $15
per ton, which would translate to a 31% increase in profits for small holder farmers.
Other highest production cost associated is land preparation. As most small and medium
farmers do not have their own tractors, they must hire tractors from local service providers. On average,
farmers must pay 50,000 Riel/ha (approximately $12.5) to a local service provider for land preparation.
In addition, proper land preparation requires the services of a tractor twice. Consequently, farmers are
required to pay on average approximately $25/ha to an outside service provider to assist in the
preparation of land. In addition, rising fuel costs has had a substantial impact on the cost of land
preparation. Land preparation costs constitute nearly 16 percent of the total cost of farming. The only
alternative left for a farmer to prepare land properly is to purchase oxen to plow the soil. However,
according to one farmer, accessing financing through local micro-credit institutions is prohibitive.

20
 Transplanting continues to be done by hand as automated equipment is far beyond the reach of
an average farmer. In addition, the plot size of many farmers is so small that it would not warrant
mechanization. This means that farmers are dependent on temporary labor to complete the
transplanting. It is estimated that transplanting takes 25 men per hectare with an average wage rate of
approximately 6,000 Riel per worker and day.

Table 7: Estimated Production Cost for Neang Mali in Kampong Speu (Per Ton)
Labor Input Riel Total $ Total % Total
Land preparation - 56,776 56,776 $ 14.19 16 %
Seed - 16,604 16,604 $ 4.15 5%
Transplanting 80,343 - 80,343 $ 20.09 22 %
Fertilizers/manure 9,641 94,339 103,980 $ 26.00 29 %
Ag Chemicals - - - - 0%
Harvesting 32,137 - 32,137 $ 8.03 9%
Drying 13,390 - 13,390 $ 3.35 4%
Milling 3,320 45,600 48,920 $ 12.23 14 %
Interest payment - 8,227 8,227 $ 2.06 2%
Total 138,832 221,546 360,37 $ 90.09 100 %
% of Input 39 % 61 % - - -
Source: Global Development Solutions, LLC.

While farm labor continues to be inexpensive in Cambodia, labor productivity has remained
relatively low when compared to regional competitors (Table 8). Low labor productivity can be partly
attributed to the absence of training and support institutions to assist farmers, as well as poor access to
financing that enable farmers to access proper farming implements and install irrigation system.

Table 8: Labor Productivity in Rice Sector between Cambodia, Vietnam and Thailand
Items Cambodia Thailand Productivity
Kampong Speu Central Differential

Yield/hectare (tons)* 1.87 2.91

Labor input (person days/ha) 43 47
Labor productivities 43.49 62.35 - 43 %

* Thailand: Total labor input equal to 155.5/ha using a wage rate of $ 3.33/day.

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Infrastructure, agricultural technology and input service
The area recognized as receiving irrigation is estimated to be about 44.48% of the cultivated
area (2,253,000 hectare) in Cambodia (Rasmei Kampuchea Daily, No. 4167, 2007). This is land
irrigated in the classic sense of canals or pumps conveying water directly to fields from the sources. The
irrigation can be classified in three types: (1) wet season supplementary irrigation for rained lowland
rice, (2) supplementary irrigation for dry season flood recession rice, and (3) irrigation of dry season
lowland rice. Only 3 percent of poor households owned the water pumps necessary to distribute
irrigation in 2004, whereas 12 percent of richer households had water pumps (World Bank, 2006).
Examination of transportation maps of Cambodia give the impression of an extensive network
of roads, railways and river systems through which many goods are transported. However, decades of
war and a lack of investment in infrastructure has turned many of these into merely lines on a map and
during the dry season much of the river network becomes impossible to water transport. While
transportation volume by road is increasing with the help of up-graded road conditions, transportation
by vessels is increasing through port rehabilitation for imports and exports. Ox-carts are used in rural
areas to transport paddy for short distances and over roads that would otherwise be impassable.
Transportation between the farm house/field to collectors or mills is usually via ox-carts, mechanized
carts (tractor plus cart), or small trucks. Similarly, tractors and small trucks are used over short to
medium distances within districts (village to local town/rice mill). Within urban areas, transport of rice
is most often by truck and motorcycle. Most traders and millers do not have their own transport, hiring
transporters to move shipments of rice or paddy.
Most credit among farmers is used in the provision of inputs, primarily fertilizer. A small
amount of credit was used for rice purchases in deficit periods. Loans for inputs are received from
microfinance services, friends, relatives, and moneylenders. In a survey of rice farmers, JICA found that
18 percent had borrowed money from MFI sources. It seems that the rural area of Cambodia is having
so much lack of the financial sources or credit providers. In some cases, the renting of equipment for
production, such as threshing machines, will be made in exchange for payment in paddy at harvest
(World Bank, 2002). JICA also reports the use of rice banks organized by NGOs in rural areas. Rice
banks receive contributions of surplus paddy from farmers and NGO purchases, which then lend paddy
to farmers in deficit periods to be paid back at harvest at 10-20 percent interest.
A Federation of Rice Millers has recently been established with a view to building relationships
with farmers to provide them with the information, capacity and incentives to deliver more consistent
quality rice. Agricultural extension services provided by the Government and NGOs also still fail to
meet the demands of farmers especially cash crop producers, and there is an important policy question
regarding the best way of disseminating market information, technology etc. to the farmers.

Organic rice and bio fertilizers used rice

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 In Cambodia, the usual practice of rice planting is aerial spreading, where farmers spread a lot
of rice seeds into a rice paddy. The System of Rice Intensification (SRI) was introduced to farmers in
Cambodia in 2000 by the Centre d’Etude et de Development Agricole Cambodgien (CEDAC). The
main innovation with SRI is that farmers transplant one to two seedlings per clump in a vegetable-like
plot. After 15 days, the young seedlings are transplanted to a rice paddy in a square pattern or a straight
line. But SRI compared to the traditional methodology requires so much time to take care the plant and
needs good quality of soil. In such case, it is very disadvantage for the farmers using this methodology,
because those farmers can’t go to find other jobs to fulfill their income for their livelihood.
A variety of fragrant rice, Neang Malis, is cultivated free of chemical pesticides and fertilizers
in a carefully selected area in central Cambodia where rich soils provide an optimal growing
environment. Nearly 80,000 families are contracting with Angkor Rice Company (2004) to grow Neang
Malis. Angkor Rice distributes high quality Neang Malis seed to contract farmers, who are not allowed
to plant their own grains. During the growing season, Angkor Rice staff regularly visit the rice paddies
to provide additional instructions and support to the contracted farmers. Only rice lots that meet the
company’s high standard will be processed at the rice mill so that only the best rice is marketed.

2. Macro economic indicators affecting trade in rice: Price and Exchange rate
Price effected rice exports
The price policy for goods, include rice products, and services in Cambodia were determined
freely by the market, except for electricity and water. As for the future use of price controls, it is still a
matter of to be addressed by the Government of Cambodia.
The rice price tends to show a seasonal fluctuation pattern: decreasing during main harvest
season (November to January) and increasing during the wet season, although the range and pattern of
fluctuation varies every year. The paddy and rice prices fluctuate also in parallel in each production
area, possibly indicating that margins are due to technical factors (transportation and processing) rather
than any strategic market behavior of participants. Price differences between provinces are small and
that the correlation between Cambodian prices and Vietnamese and Thai prices is high. Vietnamese
prices are highly correlated with the IR prices in Takeo province. Prices for Somaly and Domaly in the
Northern provinces follow the Thai prices as there is a substantial amount of export of Somaly and
Domaly paddy into Thailand.
Prices for paddy rice and rice have reportedly been on the rise in recent years due to increased
local demand and an upward trend in global rice prices. Based on a recent survey, prices for MY
2005/06 main crop paddy rice were in a range of 500-600 Riels/kilogram (approx. US$ 150/ton).
Wholesale prices for milled white rice are currently 900-1,500 Riels/kilogram (approx. US$ 350/ton).

Exchange rate effected rice exports

23
 In Cambodia, the official exchange rate is a floating exchange rate and is free of policy
distortions. Thus, the exchange rate is not a source of protection on rice production. In addition, the
border rice price is typically calculated at the official exchange rate, although when this is not at
equilibrium, a shadow exchange rate should be used to capture the effects of an overvalued or
undervalued exchange rate on the production present in an economy (Sadoulet and de Janvry 1995).
The retail price for rice in Phnom Penh fluctuated with the US$ exchange rate until September- October
2000 when the relationship was broken (JICA, 2001). The border rice price is also adjusted to take into
account whether the product of interest is an import or export. If the product is an import, the c.i.f.
import price should be adjusted by adding handling and transport costs from the border to market and
subtracting marketing margins and transport costs from the farm level to the market. If the product is an
export, the f.o.b. export price should be adjusted by subtracting handling costs, marketing margins, and
transportation costs from the port to the farm (Tsakok 1990). Nonetheless, significant gaps exist
between domestic prices of rice and accepted international prices, due to high costs of production, poor
infrastructure, and fragmented markets.

3. Policies promoting rice producers

Land Law
Over the past decade, the Government has constituted a system of economic concessions by
providing 70-year leases covering 889,399 hectares of land to 49 private companies. Ostensibly
motivated by a perceived need to commercialize agriculture, in practice, few (only about 10) are
operational. But now the Government is in the process of canceling a number of non-operational
economic concessions. It is proposed that these lands be transferred to landless (and land-poor)
households under a system of social land concessions (established by Decree in 2003). Although the
motivations for this policy are primarily, as the name suggest, social or distributional, there is a strong
economic rationale too.
In particular, Cambodia has made significant progress in addressing the weaknesses in land
allocation procedures, particularly the establishment of legal and regulatory frameworks and roles and
responsibilities for land administration and management in order to support the rice producers in the
country too. In particular, progress has been made through:
1. Establishment, in 1998, of the Ministry of Land Management, Urban Development and
Construction to lead the government’s efforts on the land reform agenda;
2. Establishment of the Council of Land Policy, in 2000, with membership of 13 ministries, to
guide the preparation of land policy formulation;
3. Adoption of a national land policy by the Council of Ministers in May 2001;
4. Enactment of a new Land Law in August 2001; and
5. Adoption of several sub-decrees under the Land Law, including systematic and sporadic land
24
 titling, land registration, Cadastral Commissions for out-of-court land dispute resolution, and
social concessions for land distribution.
In addition, several other sub-decrees are still under preparation and expected to be adopted by
end-2004/2005, including management of economic concessions; state land management; and
recognition and registration of indigenous people land rights (World Bank 2005).

Improved Infrastructure, agricultural technology and input service

The Ministry of Water Resources and Meteorology (MOWRAM), established in 1998, is
responsible for all irrigation development in Cambodia. MOWRAM in Phnom Penh has responsibility
for technical aspects of large scale systems while small and medium scale projects are the responsibility
of the provincial department of the concerned province. Provincial technical staffs are also involved in
surveys and in the formation of Farmer Water User Groups and Communities. Irrigation developments
are classified according to size into:
· Small scale – less than 200 ha irrigated area;
· Medium scale – from 200 to 5,000 ha and,
· Large scale – greater than 5,000 ha.
The goal of the MOWRAM is now to increase the irrigated area from 20 to 24 percent of the
cropped area from 2002 to 2007. The investment is estimated at US$ 880/ha for irrigation rehabilitation
including infrastructure and farmer community organization costs. The total investment required will be
US$ 52 million per year (including drainage and flood control). The current irrigation project portfolio
of MOWRAM totals about US$75 million for short to medium term investment (until 2006). There is a
short-term financing gap of US$ 81 million.
Cambodia will ensure now that research centers and extension systems be oriented towards
small-scale farmers. To the extent that resources are available, the research centers will be set up in
each specific agro-ecosystem including rain-fed lowland, upland, annual flooded agro-ecosystems.
Research will be linked with a decentralized extension team based in the rural areas. Farmer-managed
trials and demonstrations will become one of core extension activities. Research and extension systems
will go beyond increasing the effectiveness of the use of agrochemicals and improved seeds and will
put emphasis on the use of improved tools and management practices (e.g. plant, water, soil and
nutrient management). Priority will be given to diversification and intensification of sustainable
agricultural production with few external inputs as well as to cost-effective management practices.
MAFF and CARDI have put emphasis on researches to produce quality seeds and on seeds quality
controls, and with some NGOs they also have responsibility to provide the extension services to the rice
producers.
Cambodia is concerned with the widespread use of agrochemicals, which may contribute to
increased production but at a higher cost on imported inputs, especially fertilizers and pesticides. The
25
broader and longer-term effects of use of agrochemicals should be considered in the assessment of the
costs and benefits. Where appropriate and economical, MAFF will help promote such better methods of
production as the System of Rice Intensification (SRI), which allows for increased production with
reduced use of agrochemicals. The RGC is concerned that dangerous pesticides are still used in
Cambodia. Farmers continue to use extremely toxic and banned pesticides, including DDT. In addition,
to the enforcement of the sub-decree on agricultural material standards, the RGC with the development
partners is carrying out the public education programs (e.g. Integrated Pest Management (IPM)) to
ensure that farmers and consumers are aware of pesticide and agrochemical hazards.

4. Policies on trade liberalization for trade in rice

Removal of internal rice restrictions
Cambodia’s rice trade policy has been changing from a planned economy model into an open
market model since Cambodia joined Association of Southeast Asian Nations (ASEAN) in 1999 and
World Trade Organization (WTO) in 2004. Cambodia no longer implements any quantity restrictions
on rice imports and exports. Current import duties on milled rice are 7 percent plus a 10 percent of
value-added tax (VAT). VAT exemptions on agricultural inputs were generally available to farmers,
although estimates of revenue foregone by the Government were not available due to lack of statistical
data. Farmers’ exemption from land and income taxes, and turnover tax or VAT on own produce at the
first point of scale, was an important element of Cambodia trade liberalization in the rice sector. But
plantation-type agricultural entities were subjected to VAT. However, on the marketing side, Cambodia
does not offer any price support or intervention programs for paddy or milled rice.
Cambodia has a measures or food security policy to establish a national reserve of rice or
putting a distribution in place for poor or disaster-affected citizens. But the government remains
involved in food aid distributions and the army purchases domestic and imported milled rice for soldiers
and their families. A state enterprise, Green Trade Company (GTC), has responsibility for purchasing
rice on behalf of the State, including the purchase and storage of rice reserves required under the
ASEAN Food Security Reserve Agreement. GTC also engages in profit seeking activities, including
trading activities. The World Food Program (WFP) and other donors buy domestic rice, as well as
importing rice, for food for work programs. Politicians and better off families also purchase rice for
distribution to the poor, especially during emergencies and election campaigns.

Rice export promotion and relaxing and removal of rice export quotas
Before 1995, the RGC imposed the export permit of rice to ensure the National food security
and to make sure that the food requirement of the population is adequately met. Since 1995, Cambodia
freely allows the export of rice with minimum restrictions. Export permit requirement was earlier

26
imposed but was lifted in July 2001. However, exporters are legally required to obtain a permit before
exporting rice. The stated aim of this licensing is to ensure domestic food security.
Pre-shipment inspection of exported rice was effected by CAMCONTROL, a body under the
Ministry of Commerce. CAMCONTROL inspected all exports without exception. The registration
requirements for exports were the same as for imports, and that the 15,000 Riels fee applied to each
import/export declaration. Aside from a token fee of US$4 per export or import declaration is being
charged by the customs department. No export duties are charged on milled rice. But the Cambodian
Rice Millers Association has also identified ‘irregularities’ as a major constraint to exporting rice from
Cambodia. The costs of unofficial exports of paddy have been estimated at US$10–15/ton of paddy (Sik
2000, p. 18).

Abolishment of fertilizer-and pesticides import restrictions

From 1 June 2005 Cambodia eliminated quantitative restrictions on the importation of
fertilizers, pesticides and other agricultural inputs as described above and established a WTO-consistent
method of registration and review of imported agricultural chemicals requirements related to the safe
storage and domestic distribution of these products would apply only to domestic distributors or to
importers using bonded storage prior to domestic distribution. From January 2007 Cambodia would rely
on the provisions of TBT agreement to regulate domestic and international trade in these items.
Till now Cambodia does not produce or export pesticides but imports predominantly from
abroad with legal and illegal permissions from Viet Nam, Thailand, China, Malaysia, France, Singapore
and Taiwan etc. However, a system has been also established to register pesticides in Cambodia as well
as to collect or record data on pesticide importation. Here, few data were recorded in some institutions
of government. The legal statistic recorded by MAFF is below.

Pesticide imported 2005 2004 2003 Total

173.774
Commercial products (Tons) 84 42.274 47.500

5. Cambodian rice trade policy under WTO Agreement on Agriculture (AOA)

Tariff policies
Cambodia’s customs tariff was specified at 8 digits. The tariff nomenclature comprising 6,823
tariff lines in 2001 conformed to the 1996 version of the Harmonized System (HS) at the six-digit level.
All rates were ad valorem. A present, only MFN rates of duty existed, except for CEPT (Common
Effective Preferential Tariff) products originating within ASEAN. In reforming its tariff structure,
Cambodia had reduced the number of tariff bands from 12 to 4 at present (0, 7, 15 and 35 percent). The
high tariff rates of 40, 50, 90 and 120 percent have been abolished. The simple average applied rate of

27
duty had amounted to 16.4 percent in 2001, and the objective was to achieve an average tariff level
below 15 percent by 2003/04.
The rice products are protected through higher tariff rates than for other agricultural products.
Exception of the rice seed having tariff rate 5 percent, an average tariff rate of other rice products is 40
percent while the trade-weighted average tariff on other agricultural products is approximately only 17
percent, but compared with developed countries this is not significantly. While Cambodia was reducing
its import duties, excise taxes were being increased to ensure that the tax reform would be revenue
neutral.

Non-tariff measures
Tariff rate quota: Cambodia did not apply tariff rate quotas at present for any importing goods,
including rice import. But although Cambodia had not resorted to tariff rate quotas sofa, Cambodia
would reserve its right to implement such quotas depending on the outcome of the negotiation and
would respect WTO disciplines on tariff rate quotas.
Quota: Cambodia applied also no quantitative restrictions (quotas) on importing goods.
However, a limited licensing system had been established for the protection of human health, consumer
interests, national security, and to protect the environment. Products subject to import licensing are
enumerated in Table 9. The system was not designed to restrict the quantity or value of agricultural
imports, except for pesticides which was already described at above paragraph.

Table 9: Goods subject to import licensing

Description
Pharmaceuticals and medical material
Agricultural inputs
Weapons, explosives and ammunition
Gold, silver, precious stones and articles thereof
Vehicles, aircraft and parts, ships and boats, and Ministry of National Defence
other machinery for military purpose
Source: WT/ACC/KHM/21
Government Body in charge of import licensing
Ministry of Health, Department of Drugs and
Food
Ministry of Agriculture, Forestry and Fishery,
Department of Agricultural Legislation
Ministry of National Defence
National Bank of Cambodia

Anti-Dumping, Countervailing Duty and Safeguard: According to Cambodia’s legislation

agenda, the law on anti-dumping and countervailing measures and the law on safeguard measures are
currently in the process. Cambodia would not apply any anti-dumping, countervailing or safeguard
measure for any importing goods until Cambodia had notified and implemented appropriate laws and

28
regulations in conformity with the provisions of the WTO agreement on the implementation of Article
VI, on subsidies and countervailing measures, and on safeguards. After such legislation was
implemented, Cambodia would also only apply any anti-dumping duties, countervailing duties and
safeguard measures in full conformity with the relevant WTO provision.
Technical Barriers to Trade (TBT): Cambodia’s standardization system was at an early stage of
development. The current system was largely voluntary, but mandatory standards were applied to some
products when deemed necessary to protect national security, prevent deceptive practices or to preserve
human, animal and plant life or health. Cambodia ratified the ASEAN framework agreement on mutual
recognition arrangements. Imported goods were subject to the same inspection process as domestically-
produced goods, and Cambodia would extend any conformity assessment agreements, in particular
those foreseen under the ASEAN, to all members of the WTO. Sub-Decree on industrial standards No.
42/ANK/BK of 15 May 2001 and a Sub-Decree on Meterology to be adopted during 2003 provided the
basic rules and procedures for adopting new standards, technical regulations and conformity assessment
procedures.
Sanitary and Phytosanitary Measures (SPS): Cambodia will fully implement the WTO
agreement on the application of sanitary and phytosanitary measures no later than 1 January 2008.
During this period, existing measures regulated by some laws and would be applied on a non-
discriminatory basis, providing for national treatment and MFN treatment to all imports.
Government Procurement: Government procurement was carried out through either (i)
international competitive bidding (ICB); (ii) domestic competitive bidding (DCB); (iii) international
shopping (IS); (iv) domestic canvassing (DC); or (v) direct purchase or direct contracting (Dcon). ICB
and DCB contracts were advertised publicly and open to all interested bidders, and the last tree methods
did not require open public competition, but participation of foreign bidders was not prohibited. Till
now Cambodia does not intend to join the plurilateral agreement on government procurement.

Export subsidies of rice products

Cambodia does not have any kinds of subsidize for its agricultural exports, including rice
products, although under the Agreement on Agriculture, other least developed countries are not required
to undertake such a commitment. According to Senior Minister Cham Prasidh, the government is
committed to a really free trade environment: “We are a pragmatic country; Cambodia cannot afford
farm subsidies which are not good thing for long-term competitiveness. The government does not
believe that the subsidy is a good strategy for sustainable development of the agriculture sector, while
the international trend calls for the elimination of the subsidy”. The government does not extend export
credits, export guarantees or insurance programs for rice and other agricultural products.

29
 Although Cambodian does not grant any kind of direct export subsidies, but the Country does
use preferential tax incentives to attract investments which will export 80% of their produced goods into
foreign markets. The 1994 Law on Investment, amended in 2003, grants incentives and privileges
including the exemption, in whole or in part, of customs duties and taxes to qualified investment
projects (QIP), which refers to investment projects that have received a Final Registration Certificate
issued by the Council for the Development of Cambodia (CDC). The investment law provides an
import duty exemption for construction materials, production equipment and production inputs used by
export QIPs and domestic QIPs. Supporting QIPs are also entitled to the exemption, but the QIPs are
required to pay customs duties and taxes on the production inputs for the quantity that has not been
supplied to the export industry or directly exported after review.

Domestic support of Cambodian rice products

As e key economic sector, agriculture plays an important role in the development and economic
stability of the whole economy. Domestic support for the agriculture sector is important for both
protecting the livelihoods of the farmers and increasing the competitiveness of the agriculture sector in
the international market. With Cambodia’s WTO membership, the domestic support to the agriculture
will have to be compatible with AOA. The different domestic support measures for agriculture sector of
Cambodia that are permissible in AOA are showed below.
- Green Box policy covers many Government service programmes including general services
provided by governments, public stockholding programmes for food security purpose and domestic
food aid. The Green Box also provides for the use of direct payments to producers which are as
decoupled income support measures, income insurance and safety-net programmes, natural disaster
relief, a range of structural adjustment assistance programmes, and certain payments under
environmental programmes and under regional assistance programmes. And Cambodia will be allowed
to give as much “Green Box” subsidies as it wants.
Regarding to the Green Box policy, the Cambodian Agricultural Research and Development
Institute (CARDI) established by RGC is being currently played a big role for agricultural research for
Cambodia, provided support to the development of research management capacity and extended its
result to the farmers, farmer’s associations and agri-businesses. Ministry of Agriculture, Fishery and
Forestry is also providing extension services to the farmers throughout the Country.
The Government of Cambodia has also provided seed to farmers affected by natural disasters
and distributed diesel fuel free of charge to be used by farmers in the operation of irrigation water
pumps in emergency drought situation. In addition, for the “Green Box” measures, the Cambodian
farmers are exempted from the agricultural land tax and income taxes which were classified as
decoupled in come support. VAT exemptions on agricultural inputs also were generally available to

30
farmers, although estimates of the revenue foregone by the Government were not available due to lack
of statistical data.
- Blue Box, referred to “Blue Box” measures are direct payments under production limiting
programmes, certain government assistance program to encourage the agricultural and rural
development in the developing countries, and other support on a small scale (“de minimis”) when
compared with the total value of the product or products supported (less than 5% in the case developed
countries and 10 % in the case of developing Countries). The “Green Box” and “Blue Box” subsidies
are exempt from inclusion in the aggregate measures supports (AMS) which are widely considered as
distorting form of the domestic support. Till now, Cambodia still hasn’t any statistical data for these
supports to the farmers, although the Government of Cambodia has involved much kind of such
supports to encourage the agricultural and rural development, and other small scale supports including
in providing credits with the low interest rate to rice producers, in supporting improved seeds and
irrigation systems etc.
- Amber Box covers all price support measures that are provided by the Government and have
been the most important type of policy measure within the non-exempt category. Price support can be
provided either through administered prices (involving transfers from consumers) or through certain
types of direct payments from the Government. For the purpose of Current Total AMS calculations,
price support is generally measured by multiplying the gap between the applied administered price and
a specified fixed external reference price (“world market price”) by the quantity of production eligible
to receive the administered price. Till now, the Government of Cambodia does not have any kind of
these price support measures for its agricultural producers.

6. Cambodia’s commitments to regional trade arrangement and bilateral trade agreements

Cambodia commitments under AFTA
The ASEAN Free Trade Area (AFTA) was established in January 1992 to eliminate tariff
barriers among the Southeast Asian countries with a view to integrating the ASEAN economies into a
single production base and creating a common market of 500 million people. The Agreement on the
Common Effective Preferential Tariff (CEPT) Scheme for AFTA requires that tariff rates levied on a
wide range of products traded within the region be reduced to no more than five percent. Quantitative
restrictions and other non-tariff barriers are to be eliminated. Although originally scheduled to be
realized by 2008, the target of a free trade area in ASEAN was continuously moved forward.
Cambodia joined ASEAN on 30 April 1995, and subsequently committed also to implementing
CEPT for the realization of AFTA on 1 January 2000. The Cambodian CEPT Package includes a total
of 6,821 tariff lines, comprising 3,114 items in the Inclusion List (45.65% of total tariff lines), 3,523
tariff lines (51.65% of total tariff lines), in the Temporary Exclusion List, 134 tariff lines (1.96% of

31
total tariff lines) in the General Exceptions List and 50 tariff lines (0.73% of total tariff lines) in the
Sensitive List. Currently, for CEPT Package Cambodian rice products are put in the Sensitive List.
According to the schedules of tariff rate, Cambodia will have to lower its tariff between 0 and 5
per cent for the 85 percent of its goods and services on the Inclusion List by 2007. By the following
year, the percentage of goods and services on the Inclusion List will have to increase to 90 per cent. By
2009, 100 per cent of the percentage of goods and services on the Inclusion List will be between 0 and 5
per cent. In 2010, 60 per cent of the goods and services on the Inclusion List will be reduced to 0 per
cent. Finally, in 2015, 100 per cent of Cambodia's goods and services on the Inclusion List will be
reduced to 0 per cent. Moreover, Cambodia can benefit from products that are placed in the Sensitive
Track. The number of tariff lines of Cambodia that can be placed in the Sensitive Track shall be subject
to a maximum ceiling of 10 percent of all tariff lines.

Table 10: Schedules of Tariff Rate of the New Members of ASEAN

Percentage of
Goods & Percentage of
Vietnam Laos Myanmar Cambodia
Services on the Tariff Rate
Inclusion List
2003 2005 2005 2007 85% 0% - 5%
2004 2006 2006 2008 90%
2005 2007 2007 2009 100% 0% - 5%
2006 2008 2008 2010 60% 0%
2007 2009 2009 2011
2008 2010 2010 2012
2009 2011 2011 2013
2015 2015 2015 2015 100%

Cambodian-South Korea Trade Relations

Cambodia signed an agreement with South Korea to helping create a Cambodian stock
exchange by the end of the decade. Other agreements between the two leaders also included a slew of
signings boosting trade ties, especially in the areas of construction, industry, investment and
infrastructure development as well as an agreement for South Korea to build the IT network in
Cambodia. Actually, the both Governments had also discussed ways to offset a serious trade imbalance
between the two nations by increasing Cambodian exports to South Korea. But between aid and trade,
South Korea is a major contributor to the Cambodian economy.

Cambodian-China Trade Relations

Cambodia is a friendly adjacent nation of China. China established diplomatic relations with
Cambodia on July 19th 1958. The 2nd Prime Minister of Cambodian visited China from July 18th to
23rd in 1996, and in the July 19th, the two sides signed Trade Agreement and Investment Protection

32
Agreement. Since 1992, bilateral trade volume has seen a continuously rapid increasing. In the year
1997, Sino-Cambodian trade volume hit 120 million USD, increasing by 71.8% comparing to the year
before. In 1998, the number reached 162 million USD, another increase of 34.1%. The bilateral trade
volume of 1999 is 160 million USD, dropping 1.1% comparing to the year before, of which China's
exportation accounts for 104 million USD, dropping by 8.2%, importation 55.79 million USD,
increasing by 15.8%, comparing to the year before. The principal exports from China to Cambodia
include machinery and electric products, textile, steel, costumes and dressing accessories, on/off and
protective circuits’ facility, house chinaware, medicine, billet and rough-forged material, footwear, and
etc. The principal imports from Cambodia to China include caoutchouc, log, timber, veneer and etc.

Cambodian-US Trade Relations

Since the resumption of diplomatic relations with Cambodia in 1992, the United States has been
at the forefront of Cambodian development. In 1996, President of the United State of America signed a
bill formally extending Most Favored Nation (MFN) status to Cambodia. The US Government
subsequently designated Cambodia as a beneficiary under the Generalized System of Preferences (GSP)
in 1997. In 1999, Cambodia and the US signed a Bilateral Textile Agreement (BTA), a unique
agreement that links labor standards to trade. In addition, Deputy U.S. Trade Representative and
Cambodian Minister of Commerce signed a trade and investment framework agreement (TIFA) July 14,
2006. Under the TIFA, the two countries will consider ways to expand and liberalize bilateral trade and
investment. They also will discuss issues such as intellectual property rights, trade facilitation and
customs, and implementation of Cambodia’s WTO commitments.
Besides, for Cambodia the US has been a single largest trading partner by far since 1998.
Exports to the US totaled $1.5 billion in 2004, accounting for at least 70% of Cambodia’s total exports
and over 35% of Cambodia’s entire GDP. US exports to the Cambodia have been minuscule in
comparison, albeit increasing from approximately $20 million in 1999 to $59 million in 2004. The US
is the second largest bilateral donor to Cambodia after Japan. Assistance from the U.S. Agency for
International Development (USAID) reached $57 million in 2004 and is expected to increase from year
to year.

Cambodian-Japan Trade Relations

The possibility of Japan-Cambodia Investment Agreement was discussed. The importance of
legal stability and predictability provided by such agreement was stated. It was pointed out that a
possible investment agreement should include the provisions on investment liberalization as well as the
provisions on investment, which are included in the Investment Chapter of Economic Partnership
Agreement (EPA) that Japan had signed with other countries in recent years.

33
7. Cambodia rice trade facilitation
Customs Valuation
Cambodia is in the process of reforming its customs regime through a five year (2003–2008)
reform and modernization program to streamline and improve the effectiveness of customs operations
and to facilitate trade. With assistance from the International Monetary Fund (IMF), a revised Law on
Customs has been drafted and is awaiting National Assembly approval. As part of its WTO accession
commitments, Cambodia will implement the WTO Customs Valuation Agreement by January 2009.
Although Cambodia has made some progress in reform efforts, customs procedures remain
complicated. Both local and foreign businesses have complained at the present that the Customs and
Excise Department generally engages in practices that are non-transparent and that often appear
arbitrary and irregular. Importers frequently cite problems with undue processing delays, excessive
paperwork and formalities driven by excessive discretionary practices.

Rules of Origin
Cambodia had not yet established regulations on rules of origin and intended to introduce
preferential rules of origin as required by its membership in ASEAN. But Cambodia was requested by
the Members of WTO that the Cambodia’s law and regulations on rules of origin would be in
conformity with the provision of WTO Agreement on Rule of Origin and would incorporate the
requirements of Article 2(h) and Annex II, paragraph 3(d), i.e., that for non-preferential and preferential
rule of origin, the customs authority would provide upon the request of an exporter, importer or any
person with a justifiable cause an assessment of the origin of the import and outline the terms under
which it would be provided, and that any request for such an assessment would be accepted even before
trade in the goods concerned began.
Until now, importers were required by the Government of Cambodia to indicate a product’s
origin in the import declaration for non-preferential trade. The requirement was applied for statistical
purposes only. However, Cambodia intended to comply fully with the provisions of the WTO
Agreement on Rules of Origin in the application of preferential and non-preferential rules of origin and
would be to do so after enactment of the new Customs Law and its implementing regulations. In
particular, the requirements of Article 2(h) and Annex II, paragraph 3(d) of the Agreement would be
established in Cambodia’s Law on Customs from the date of its promulgation, or if necessary, by
government degree.

Pre-shipment Inspection
Cambodia maintains a pre-shipment inspection system. Societé Generale de Surveillance (SGS)
may inspect the quality of any goods shipped into the country. In practice, imports are admitted into
34
Cambodia with little reference to standards or rigorous inspection. The present pre-shipment inspection
contract applied to consignments valued at US$ 4,000 or more (FOB).
Goods worth less than US$ 4,000 were valued by the Cambodian Customs and Excise
Department (some remote customs checkpoint were authorized to make valuation decisions for imports
up to US$ 1,200). The fee for pre-shipment inspection amounted to 0.80 % of the FOB value of the
inspected goods, except for bulk petroleum products (US$ 0.30 per metric ton). Importers failing to
secure pre-shipment inspection, and thus necessitating goods to be inspected by custom officials at the
border checking point, incurred a penalty equal 7 % of the CIF value of the imported goods. Cambodia
has also a Dispute Settlement Working Group that respond to resolve promptly claims or disputes
arising from the implementation of pre-shipment inspection.
But from the date of the Cambodia’s Accession into WTO the Government of Cambodia takes
full responsibility to ensure that the operations of the pre-shipment inspection companies meet the
requirements of the WTO Agreements, including the establishment of charges and fees consistent with
Article VIII of the GATT 1994, due process and transparency requirement of the WTO Agreement
(Article X of the GATT 1994), the provisions of the Agreement on the Implementation of Article VII of
the GATT 1994 and the Agreement on Pre-shipment and Inspection.

Import Licensing Procedures

Cambodia imposed no licensing requirements nor quantitative restrictions or prohibitions on
imported agricultural products. Sanitary and Phytosanitary certificates were required for the importation
of agricultural products.

D. Market Access of Cambodian Rice Export (Mr. KANN Viseth)

1. Multilateral Commitments under the WTO Agreement on Agriculture
The General Agreement on Trade and Tariff (GATT) came into existence in 1947. It sought
substantial reduction in tariff and other barriers to trade and to eliminate discriminatory treatment in
international commerce. Therefore, the agriculture trade has been covered by the GATT rules of non
discrimination and market access.
Since the GATT focuses almost entirely on manufactured products, problems have been arising
for agricultural products. Core problems are high tariff & various non tariff barriers, unlimited export
subsidies, and unlimited trade distorting domestic support. These leaded to agricultural trade distortion,
price undercutting, and increasing trade distortion dispute cases. Concerning on the problems, the
Agreement on Agriculture (AOA) were formed in the Uruguay Round of trade negotiation to reform the
rules of agriculture trades and put them under the multilateral disciplines of GATT/WTO. Objective of
WTO-Agreement on Agriculture are:
• Fair and market oriented trading system
35
 • Commitments on support and protection
• Operationally effective GATT rules and disciplines
• Equitable trade reform process
• Greater opportunities and term of access to developing countries
• Concern for LDCs and NFIDCs
• Concern on Non-trade issues such as food security, environment, health, etc.

Positive Effects from the Agreement on Agriculture

Since Cambodia is an agricultural economy, 80 percent of its labor force is employed in the
agricultural sector. The agreement on agriculture provided many benefits to least developed countries
such as Cambodia. The agreement required member countries to eliminate non-tariff barriers, transfer
them into tariff barriers and gradually reduce them. As a least developed country, Cambodia may
maintain import tariffs on agricultural products at higher levels through accession negotiations. This
factor provides a better possibility for Cambodia to expand its export agricultural products and attract
investment in this area as well.

Retaining policy options and flexibility on agriculture

Market access and improvements in the investment environment will benefit agriculture as well
as manufacturing and services. In the special rules of WTO regarding the way governments can support
agriculture sectors. These rules are designed to insure that support measures that distort trade are not
introduced or increased, and that any existing measures that distort trade are gradually reduced to
minimal amounts.

2. The Doha Development Agenda

At the fourth WTO Ministerial Conference in Doha (November 2001), Members agreed to a
round of multilateral trade negotiations, incorporating the ongoing agriculture negotiations. On
Agriculture, Members committed themselves to: “comprehensive negotiations aimed at substantial
improvements in market access; reductions of, with a view to phasing out, all forms of export subsidies;
and substantial reductions in trade-distorting domestic support.”
As tariff barriers are reduced and tariff rate quotas expanded in both developed and developing
countries, increased market access opportunities will allow Members to expand export volumes and
revenues. Many of Cambodia’s actual or potential agribusiness export are affected neither by high tariff
nor large scale subsidies in the main importing markets. Three major exports are, however, likely to be
significantly impacted by Doha agricultural commitments: rice, rubber and oilseeds.
The world market for rice is highly influenced by subsidies and excessive duties in all the main
industrial markets. The US uses subsidized export credits and food aid dispose of surplus production as
36
well as providing significant domestic support to its rice farmers. Farmers in the EU, Korea, Japan and
Mexico are also supported through decoupled production-limiting payments. Japan and Korea, in
particular maintain very high market protection regimes (sensitive products). Cambodia’s market
prospects are also negatively affected by its lack of access to tariff quotas on rice like for Korea or other
countries mentioned above. All of these features tend to support the positions outline in general above.

3. Current WTO agriculture negotiation

The sixth Ministerial Conference, held in Hong Kong, in December 2005 failed to reach an
agreement on many of modalities for agriculture. Ministers did agree that they would complete the
negotiation on the modalities by April 2006, which was not met. A Mini-Ministerial meeting was held
in Geneva, but Members failed to reach a consensus on so-called Round One issues of (i) agricultural
tariff reductions, (ii) domestic agricultural support reduction, and (iii) non-agricultural tariff reductions.
The G-8 Summit leaders, at their meeting in July 2006, pledged to allow their negotiators additional
flexibility to reach an agreement on an acceptable packaged of reductions this year.
Base on the Ministerial Declaration in Hong Kong on duty-free, quota-free market access (DF
& QF), the United State is fully committed to implementing the decision on DF & QF to LDCs and
Japan provide DF & QF to LDCs by granted 98% of product from the list.

4. Preferential market access and ASEAN + arrangements

Currently, the market size of Cambodia is relatively small with 13.8 million consumers, 36
percent of which are living below the poverty line. Of course, we have access to the market of our
ASEAN neighbors, which consist of over 500 millions consumers, but economic conditions and
products are alike and these create some difficulties for Cambodia to export as much as possible to this
market. Therefore, it is necessary for Cambodia to look at the world market as a whole to find better
comparative advantages for its products, especially in the China, Japan, South Korea, and US markets.
The Most Favored Nation Principle among members created an important factor for Cambodia to attract
foreign direct investment.

Cambodia in a China-ASEAN FTA

The ASEAN Summit held in November 2001, the leaders of ASEAN and China agreed to
further accelerate economic cooperation and integration between the two economies by setting an FTA
between them. After one year of negotiations, a framework agreement laying out an FTA plan was
signed at the Eighth ASEAN Summit in Phnom Penh. In January 2004, the “Early Harvest” of some
agricultural products came into force. The ASAEN-China Free Trade Area (ACFTA) will be a single
market of 1.7 billion people, and has been targeted to establish the ACFTA by 2010 for six original
members and 2015 for the newer members, namely the CLMV countries.
37
 China and ASEAN trade began at a very low level. However, it has rapidly grown and they are
now important trading partners. An emerging phenomenon in China-ASEAN trade relations is that
China has become a major market for ASEAN’s products. ASEAN countries definitely benefited from
China’s rice and China’s import from ASEAN have increased continuously. With the adoption of
ASEAN-China FTA, ASEAN is currently China’s fifth largest trading partner and China is ASEAN’s
sixth trading partner. Among China’s imported products, many are closely relevant to ASEAN such as
rice, palm oil, rubber, chemicals, textiles, and petroleum products. Cambodia, therefore, welcomed the
decisions of both ASEAN member countries and China to grant special treatment to Cambodia’s
agricultural products, which envisage extending the implementation period of agricultural liberalization,
including very sensitive products in the exclusion list, as well as providing preferential market access to
Chinese markets earlier than other countries’ products.

Cambodia in a Korea-ASEAN FTA

Economic interdependence through trade and investment linkages between ASEAN and Korea
has been significantly deepened over the past decades. In 2004, ASEAN become Korea’s fifth largest
trading partners, taking 9.5 percent of Korea’s total trade volume as shown in table A. Although
bilateral trade and investment between ASEAN and Korea decreased sharply due to the East Asian
financial crisis, economic relationship between the two sides has rapidly recovered.
At the Ninth ASEAN–Korea Summit in December 2005, the leaders signed the Framework
Agreement on Comprehensive Economic Cooperation between ASEAN and the Republic of Korea.
They also welcomed the signing of the agreement on trade in goods.
Table 11 and Table 12 show that the results of the agreement on trade in goods under the
framework agreement on comprehensive economic cooperation between ASEAN economies and Korea
that have been reached in the early 2006. Under this agreement, the tariff reduction or elimination
program of each country will require the applied MFN tariff rates on goods under the listed tariff lines
to be gradually reduced, and where applicable, eliminated.

Table 11: ASEAN and Korea FTA Preferential Tariff Rates for ASEAN-6
X= applied
MFN tariff rate 2006* 2007 2008 2009 2010
X≥20 percent 20 13 10 5 0
15percent≤X<20 percent 15 10 8 5 0
10percent≤X<15 percent 10 8 5 3 0
5percent≤X<10 percent 5 5 3 0 0
X≤5 percent Standstill 0 0
Note: * The first date of implementation shall be July 1, 2006.

38
Source: ASEAN Secretariat, 2006

Table 12: ASEAN and Korea FTA Preferential Tariff Rates for Cambodia, Lao PDR, and
Myanmar (not later than January 1)
X= applied
MFN tariff rate 2006* 2007 2008 2009 2012 2015 2018
X≥60 percent 60 50 40 30 20 10 0
45percent≤X<60 percent 45 40 35 25 15 10 0
35percent≤X<45 percent 35 30 30 20 15 5 0
30percent≤X<35 percent 30 30 25 20 10 5 0
25percent≤X<30 percent 25 25 20 20 10 5 0
20percent≤X<25 percent 20 20 15 15 10 0-5 0
15percent≤X<20 percent 15 15 15 10 5 0-5 0
10percent≤X<15 percent 10 10 10 8 5 0-5 0
7percent≤X<10 percent 7** 7** 7** 7** 5 0-5 0
5percent≤X<7 percent 5 5 5 5 5 0-5 0
X<5 percent Standstill 0
Note: 1) * The first date of implementation shall be July 1, 2006.
2) ** Myanmar shall be allowed to maintain an ASEAN-Korea FTA preferential tariff rate at
more than 7.5 percent until 2010.
Source: ASEAN Secretariat, 2006

The ASEAN-Korea FTA will provide that by 2008 South Korea will remove all tariffs for at
least 95 percent of its tariff lines placed in the Normal Track while ASEAN-6 will remove all tariffs for
at least 90 percent in the Normal Track by 2009. In 2010, Korea shall eliminate all its tariffs for tariff
lines placed in the Normal Track while this shall apply for ASEAN-6 in 2012.
The agreement on trade in goods contains provisions for special and differential treatment
(SDT), and additional flexibilities specifically designed for new ASEAN member countries-the CLMV
countries. In this regard, an AKFTA would have differentiated timeframe for Korea and ASEAN-6 on
the one hand, and the CLMV countries on the others. Cambodia, along with Lao PDR, Myanmar, and
Vietnam will have preferential treatment due to their low level of economic development.

Cambodia in a Japan-ASEAN FTA

The ASEAN +Japan Summit were aimed at deepening the ASEAN-Japan cooperation. The
leaders of ASEAN and Japan signed a joint declaration on Economic Partnership toward the Creation of
ASEAN-Japan Free-Trade-Area for the coming ten years.

39
5. Tariff and Non-Tariff Barriers
Tariffs in agriculture and food sector are (i) very high, being, on average, several fold higher
than in the non-agricultural sector, (ii) frequently highly skewed with a few, very large prohibitive
tariffs, (iii) highly variable among countries, and (iv) frequently significantly higher for bound than the
applied rates. In a number of cases, there are preferential rates for developing countries into developed
country markets. Agriculture trade also takes place in tariff rate quotas (TRQs). TRQs are two level
tariffs in which a limited volume of imports is permitted at the lower, in-quota tariff and additional
imports are allowed at higher, out of quota tariff.

Tariff rate for rice in China, Japan, South Korea, and USA
Table 13: List of Rice products with Tariffs in China, Japan, South Korea and USA
Products China Japan Korea USA (tariff)
(Tariff %) (Tariff %) (Tariff %)
Rice in husk 68 402 yen/kg 5 % (in quota) 1.8 cents/kg
Husked (brown) rice 68 402 yen/kg 5 %(in quota) 2.1 cents/kg
Milled rice 68 402 yen/kg 5 %(in quota) 11.2 %
Broken rice 68 402 yen/kg 5 %(in quota) 0.44 cents/kg
Estimate, using methodology to convert specific and compound tariffs into ad valorem tariffs agreed by
WTO Members in 2005
Source: International Trade Centre UNCTAD/WTO

Tariff Rate Quotas (TROs) in China, Japan, South Korea, and USA
Tariff Rate Quotas (TROs) in China: Tariff quotas will be used in the administration of wheat,
corn, rice, cotton and wool imports, with low tariffs applied to imports under quotas and high tariffs for
imports beyond quotas. China has committed itself to abolish non-tariff measures as soon as it enters
the WTO; the administration of tariff quotas will come into force without affecting China's market
access for WTO members. During the course of negotiations, China was given the chance to enforce the
administration of tariff quotas on essential products, such as wheat, rice, corn, cotton, bean oil, sugar,
etc. The import quotas committed by China for wheat, corn and rice were 3.99 million tons and by
2004, the above quotas will increase to 5.85 million tons. The in-quota tariffs for rice range between 1
to 9 percent and their beyond-quota tariffs range between 65 to 71 percent.
Agricultural imports are subject to licensing, tariff-rate quotas and prohibitions. Automatic
import licensing is used to monitor imports; non-automatic import licences are used to fulfil China's
obligations under international conventions. TRQs are non-automatic, except for goods allocated on a

40
first-come first-served basis. As at 27 September 2005 1 , China had notified three import licensing
regimes: import licenses, automatic import licenses, and tariff rate quotas (TRQs) for imports; import
quotas were abolished on 10 December 2004 2 . According to China's notification on licensing, made in
December 2004, it appears that two lines that were due to be removed from the list of products subject
to licensing remain on the list 3 . Tariff rate quotas exist for wheat, maize, rice, soybean oil, palm oil,
rape oil, sugar, wool, wool tops, cotton, and chemical fertilizers. According to China's WTO
notification, the system serves the purpose of restricting the quantity of imports 4 . The National
Development and Reform Commission (NDRC) and MOFCOM are jointly responsible for
administering tariff rate quotas for rice, maize, wheat, and cotton, and MOFCOM is solely responsible
for fertilizers, other agricultural products, wool, and wool tops 5 .

Tariff Rate Quotas (TROs) in Japan: Japan currently has a tariff of 150 yen per kilogram
imposed on all rice as it crosses the border. Additionally, rice imports are subject to a quota of 682,000
tons, above which imports are taxed with a tariff of 341 yen per kilogram. Statistics show that this tariff
rate effectively prohibits all imports above the quota (Fukuda, et al., 2003). Without exception, every
policy has been designed to protect a comparatively disadvantaged domestic industry. Figure below
illustrates the nominal rate of protection in the Japanese rice sector due to high tariff levels.
Tariff quotas apply mainly to agricultural products, including dairy products, rice, wheat and
barley, silk-worm cocoons and raw silk, starches, prepared edible fat, corn and ground nuts, dried
vegetables; they cover some 1.6% of all tariff lines 6 . Imports of rice have been subject to tariff quotas
since 1 April 1999; the applied out-of-quota duty on rice in FY 2004 was set at ¥341 per kg.; the duty is
the sum of a specific duty (temporary rate) of ¥49 per kg., and a levy of ¥292 per kg collected by the
MAFF. Imports of in-quota rice were 679,668 tones in FY 2001, 679,875 tones in FY 2002, and
673,734 tones in FY 2003; out-of-quota imports in the same years were 69 tones, 202 tones, and 217
tones 7 . As part of Japan's minimum access commitments, a certain amount of rice can be purchased and

1
WTO document G/LIC/N/3/CHN/4, 30 September 2005.
2
WTO document G/LIC/W/25, 19 September 2005.
3
Under Annex 3 of China's Protocol of Accession, licensing was due to be phased out for HS 28371110 (sodium
cyanide) upon accession and for part of HS 84435912 (platen screen press printing machinery) in 2002.
4
WTO document G/LIC/N/3/CHN/2, 9 October 2003.
5
Previously all the quotas except on fertilizers were administered by the State Development Planning
Commission (SDPC); quotas for fertilizers were administered by the State Economic and Trade Commission
(WTO document, G/LIC/N/3/CHN/1, 23 September 2002).
6
The latest notifications of tariff quota administration are contained in WTO documents G/AG/N/JPN/91
(10 March 2004), and G/AG/N/JPN/100 (13 September 2004).
7
The rice import system is described in detail in JETRO (2003). Under the Uruguay Round agricultural
negotiations WTO Members would replace the import quota system by bound tariff measures, and guarantee
minimum access for products with essentially no imports during the reference period (1986-88). Since 1996,
Japan's rice imports have been subject to minimum access commitments defined by the Government based on the
WTO Agreements.

41
marketed directly under the simultaneous buy-and-sell (SBS) system; a total of 50,067 tones were
imported under the SBS in FY 2002, and 100,000 tones in FY 2003.

Tariff Rate Quotas (TROs) in South Korea: During the 1994 Uruguay Round (UR) of WTO
negotiations, this notion was successfully challenged and Korea agreed to establish a Minimum Market
Access (MMA) quota for rice for a 10-year period. In addition, Korea agreed to remove all non-tariff
barriers, including import quotas, by January 1, 2005. At a minimum, Korea promised to increase rice
imports from zero to four percent of domestic consumption to prepare the rice market for liberalization.
Under the agreement, no rice would be sold directly to consumers; rather, imported rice would only be
used for processed foods. In December 2004, Korea was granted a 10-year extension for the ratification
of rice imports. The extension called for Korea to double its total rice imports over the next 10 years
(from 4 percent to about 8 percent of total consumption), increasing the MMA quota from 225,575 tons
in 2005 to 408,698 tons by 2014. Along with Country-Specific Quota (CSQ) commitments to purchase
minimum amounts of imports from China, Thailand, and Australia, Korea also agreed to purchase at
least 50,076 tons of U.S. rice each year for the next 10 years (Table 14).
A separate Most Favored Nation (MFN) quota was established to which all countries had
access, including the CSQ countries. Under the extension agreement, imported rice would be available
for retail sales to Korean consumers for the first time. The extension was approved by WTO in April
2005 and ratified by the Korean National Assembly in November 2005. Although the MMA import
quota will almost double in size by 2014, there is no provision for imports above the quota. Tariffs
within the quota will remain at five percent. Korea has the right to terminate the minimum-access quota
and move to the tariff-rate quota at the beginning of any year between 2005 and 2014. If the MMA is
terminated, the CSQ volumes will be converted to the global quota on an MFN basis.

Table 14: Allocation of the MMA for 2005-2014 (unit: tons, milled rice)
Country Calendar Specific Quota (CSQs)

Year Total Quota Total USA China Thailand Australia

MFN

2005 225,575 20,347 205,228 50,076 116,159 29,963 9,030

2006 245,922 40,694 205,228 50,076 116,159 29,963 9,030
2007 266,269 61,041 205,228 50,076 116,159 29,963 9,030
2008 286,616 81,388 205,228 50,076 116,159 29,963 9,030
2009 306,963 101,735 205,228 50,076 116,159 29,963 9,030
2010 327,310 122,082 205,228 50,076 116,159 29,963 9,030
2011 347,657 142,429 205,228 50,076 116,159 29,963 9,030
2012 368,004 162,776 205,228 50,076 116,159 29,963 9,030
2013 388,351 183,123 205,228 50,076 116,159 29,963 9,030
2014 408,698 203,470 205,228 50,076 116,159 29,963 9,030
Source: Ministry of Agriculture and Forestry

42
 South Korea reserves the right to terminate the minimum access quota and move to a tariff-rate
quota (TRQ) system at the beginning of any year, 2005-14. If a TRQ system is adopted, the size of the
quota remains at the level of the minimum access quota when the switch to a TRQ system is made, with
no further increases in later years. A TRQ allows for imports outside the quota, and the over-quota tariff
would be calculated according to URAA guidelines. If agreement is reached in the global Doha
Development Round (DDR) of negotiations, the over-quota tariff and the size of the TRQ would be
changed to reflect rules of the DDR agreement. In the event of a switch to a TRQ system, country-
specific quotas would end and the entire quota amount would be open to imports on an MFN basis.

Tariff Rate Quotas (TROs) USA: The United States is one of the world's largest producers,
exporters, and importers of agricultural products. In 2004, the average MFN applied tariff for
agriculture was 9.7% (the corresponding average for other products was 4%, see Chapter III).
Government payments to agricultural producers as a share of net farm income fell from 48% in 2000 to
16% in 2004. This decline occurred despite an increase in the share in total government payments of
counter-cyclical and loan program payments since the enactment of the Farm Security and Rural
Investment Act of 2002. Ad hoc emergency payments continue to supplement other government
payments and government-sponsored crop insurance.
The Harmonized Tariff Schedule of the United States was enacted by the Trade and
Competitiveness Act of 1988 and became effective in January 1989. It is based on the Harmonized
Commodity Description and Coding System, (HS) 8 . The 2004 Harmonized Tariff Schedule reflects the
2002 amendments to the HS. It comprises 10,304 tariff lines at the HS 8-digit level 9 . The general
policy of the United States, embodied in Section 126 of the Trade Act of 1974, is to grant MFN tariff
treatment to all its trading partners 10 . The United States may adopt laws that deny MFN tariff treatment
to particular countries: it applies MFN tariff treatment to all but one WTO Member (Cuba). In
addition, the Democratic People's Republic of Korea does not receive MFN tariff treatment from the
United States. Imports from these two countries are subject to the "statutory rate", which is the rate
imposed by the Smoot-Hawley Tariff Act of 1930, as amended. MFN tariff treatment was restored to
Serbia and Montenegro in December 2003 and to Lao People's Democratic Republic in February
2005 11 .

8
The Harmonized Tariff Schedule is included in a document produced and updated regularly by the International
Trade Commission and available online at: http://www.usitc.gov/tata/hts/index.htm.
9
The tariff lines corresponding to the in-quota and out-of-quota rates applied to the same product are counted as
one.
10
19 USC 2136.
11
Federal Register, 68 FR 64410, 13 November 2003, and 70 FR 7319, 11 February 2005.

43
TBT and SPS for China, Japan, South Korea, and USA
TBT and SPS for China: Since its accession to the WTO, China has made a number of changes
to its regulatory structure for technical regulations, conformity assessment procedures, standards, and
sanitary and phytosanitary measures. In 2001, China created the General Administration of Quality
Supervision, Inspection and Quarantine (AQSIQ) under the State Council. AQSIQ is a ministerial
administrative organ in charge of national quality, metrology, entry-exit inspection, animal and plant
quarantine, certification, accreditation, standardization, and administrative law enforcement. A number
of regulations on compulsory product certification have also been promulgated, unifying certification
rules for imported and domestically produced goods, including a product catalogue for compulsory
certification, technical regulations, standards and conformity assessment procedures, marks, and fees.
Thus, as of August 2003, a unified China Compulsory Certification (CCC) mark for both
domestically produced and imported products replaced previously applied marks (the CCIB mark for
traded products and GREAT WALL mark for domestic products). According to China's notification to
the WTO under Article 15.2 of the TBT Agreement, a large number of government agencies are
involved in the formulation of technical regulations (including mandatory standards), including AQSIQ,
the NDRC, the General Administration of Customs, the State Food and Drug Administration, and a
number of Ministries 12 . China's TBT and SPS enquiry point is in the AQSIQ, and the notification
authority is in the Ministry of Commerce.
The Standardization Administration of China (SAC) was established by the State Council in
April 2001 to administer standardization work in China. There are four kinds of standards in China:
national, sectoral, local, and enterprise standards. National standards are developed for technical
requirements that need to be adopted nationally. Sectoral standards are developed when there are no
national standards available, but unified technical requirements are needed in a certain professional field
at a national level. Local standards may be developed where neither national nor sectoral standards are
available, but unified requirements for safety and hygiene of industrial products are needed within a
local area; once equivalent national standards are developed, they replace these local or sectoral
standards. Enterprise standards may be developed within an enterprise when national, sectoral or local
standards are not available. However, an enterprise is encouraged to adopt national, sectoral, and local
standards if they are available. In each of the national, sectoral, and local standards categories, there are
voluntary and mandatory standards. 13 Around 14% of national standards are currently mandatory; the

12
A full list is provided in WTO document G/TBT/2/Add.65, 29 January 2002.
13
According to the Regulations for the Implementation of the Standardization Law, mandatory standards relate to:
pharmaceuticals, food hygiene and veterinary medicine; safety and hygiene standards for products and
production, storage and transportation, and utilization of products; standards for the safety of labour and hygiene
and safety standards for transportation; quality, safety, and sanitation standards for "project construction" and
other standards for "project construction" that must be controlled by the State; standards for the discharge of
pollutants concerning environmental protection, and standards for environmental quality; important technical
terms, symbols, codes and drafting methods in common use; standards for commonly-used methods of

44
share has not changed since 2000. No data are available on the share of sectoral and local standards that
are mandatory. In addition, national advisory technical documents may be developed in some areas
where technologies are changing rapidly and standards need to be developed more rapidly than the time
taken to develop national standards.
China's WTO notification authority for SPS measures is the Ministry of Commerce. The
Enquiry Point under paragraph 3 of Annex B of the SPS Agreement is located in the AQSIQ.
According to the authorities, under the relevant laws and regulations, there are three methods of
inspection carried out at the border for goods subject to SPS measures. In the first case, the authorities
at the border may release the goods after inspection of the relevant documents, following which SPS
inspection is carried out by the relevant SPS authorities at the final destination within the country; in
this case, the goods would clear customs the following day. Under the second method, inspection at the
border is carried out "using sense organs" 14 , following which SPS inspection is carried out, as under the
first method, at the destination; under this method, clearance at the border takes between 3-5 days.
Under the third method, SPS inspection is carried out at the border before customs clearance is given;
the time taken for clearance varies depending on the type of products being imported and the risks
involved.
Labeling requirements are maintained under the Standardization Law, the Food Hygiene Law
adopted on 30 October 1995, and the Law on Product Quality, adopted on 22 February 1993 and
amended on 8 July 2000. Under these laws, all products sold in China must have Chinese language
labels. The label should state, inter alia, name and trade mark of the product, type of food, the
manufacturer's name and address, country of origin, ingredients in descending order by weight or
volume, net weight and solid content, date of manufacture, best before or expiry date, usage
instructions, batch number, and the relevant standard code. Information may also be provided in a
foreign language, although the details must correspond to the information provided in Chinese.

TBT and SPS for Japan: Japan has continued its efforts towards international harmonization of
its standards and technical regulations. In 2005, voluntary standards comprised 9,727 Japan Industrial
Standards (JIS), and 215 Japan Agricultural Standards (JAS). About 93% of JIS were aligned with
international standards in 2005, up from 92% in 2004 15 . Between April 2005 and March 2006, 510 JIS
items were revised, 141 withdrawn, and 267 newly established; during the same period, 34 JAS items
were revised, 15 withdrawn, and five newly established.

experimentation and examination; standards for conversion and coordination; and quality standards for important
products that need to be controlled by the State.
14
The authorities state that this inspection is carried out by Customs officers using their sensory organs.
15
In order to facilitate a more efficient harmonization of national standards with international ones, the JIS
Committee adopted an Action Plan in June 2004. The Plan identifies strategic fields in international harmonization
and prescribes the roles of individual participants (industries and the private sector) in detail.

45
 Japan revised its maximum residue limits for agricultural chemicals (e.g. pesticides, feed
additives, and veterinary drugs) under a positive list system for chemicals in foods in May 2006. Te list
of non-quarantine plant pests was amended in April 2005 and July 2006 to add 46 and 34 pests,
respectively. The Food Safety Commission has been conducting safety assessments of genetically
modified foods (GM food) since 2003 16 . The Commission developed standards for the safety
assessment of GM foods and food additives produced by GM micro-organisms, and policies for the
safety assessment of GM stack varieties, GM feed crops, and GM feed additives.
Food labeling in Japan is subject to the JAS Law and the Food Sanitation Law. A total of
63 technical regulations are in force based on the JAS Law. These are: the cross-category quality
labeling standards for processed foods, fresh foods, and genetically modified foods; individual quality
labeling standards; and the standards for organic agricultural products and organic processed foods. The
cross-category quality labeling standards are provided for all foods and beverages except alcohol and
medical drugs. Fresh foods must be labeled with the name and the place of origin. Processed foods must
be labeled with the name, the list of ingredients, the net content, the date of minimum durability or use-
by date, instructions for storage, the name and address of the manufacturer, and the country of origin for
imported products.
Specific labeling requirements are provided as quality labeling standards for individual
products depending on their characteristics. Any food containing additives must also be labeled with the
names of all additives included. Processed food imported from foreign countries is excluded from the
mandatory labeling of place of origin of the ingredients. All organic agricultural products and organic
agricultural processed foods to be sold in Japan must comply with the JAS organic standards and carry
the JAS organic mark. To label food as "organic", certification is needed from a registered certifying
body (RCB) or a registered overseas certifying body (ROCB) that the food meets certain JAS
requirements. Only certified food is allowed to be distributed with a JAS organic mark.
Mandatory labeling for genetically modified (GM) foods is regulated under the Food Sanitation
Law and the JAS Law; the list currently comprises seven crops (soybeans, corn, rape, seeds, potatoes,
cotton seeds, alfalfa, and sugar beet) and some processed foods (32 kinds of designated processed food)
mainly made of soybeans or corn 17 . The Ministry of Health, Labour, and Welfare does not permit
imports of GM foods that do not meet its safety requirements. The Agricultural Products Inspection
Law requires mandatory inspections of rice, wheat, and barley as well as soybean.

16
The Food Safety Commission was established under the Food Safety Basic Law in the Cabinet Office to
perform risk assessments. The Commission's primary goals comprise three main components: conducting risk
assessments of food in a scientific, independent, and fair manner, and making recommendations to relevant
ministries based upon the results; implementing risk communication among stakeholders; and responding to food-
borne accidents and emergencies.
17
The list is subject to annual update.

46
 TBT and SPS for South Korea: The Purpose of the WTO’s TBT Agreement is to encourage the
development of international standards and conformity assessment procedures to support free
international trade, while ensuring that the standards and technical regulations do not create unnecessary
obstacles to international trade. For transparency and efficiency, Korea appointed four enquiry points by
distinct sectors and products (industrial products: Ministry of Commerce, Industry and Energy;
agricultural products: Ministry of Agriculture and Forestry; fishery products: Ministry of Maritime and
Fishery; food hygiene and cosmetic products: Ministry of Health and Welfare).
These enquiry points to reply to oversea enquiries on any existing or proposed Korea standard,
technical regulations and certification systems, including Korea’s TBT notifications of the WTO TBT
Agreement. Korea has to do as a member of the WTO is to notify the change in technical regulations
and conformity assessment procedures and as a member of WTO, Korea observes the principle of non-
discrimination in applying technical regulations and conformity assessment procedures to similar
domestic and imported products regardless of origin.
Since the establishment of the WTO, the Korean government has amended various SPS
measures to harmonize with standards, guidelines, and recommendations promulgated by the CODEX,
OIE, and IPPC. Korea recognizes pest or disease free areas after a risk assessment of the exporting
country. For transparency and efficiency, Korea designates the notification authority to the Ministry of
Foreign Affairs and Trade.

TBT and SPS for the United State: In applying the SPS and TBT Agreements, the WTO
extensively relies on decisions by the Codex Alimentarius Commission ("Codex"). Article 3 of the SPS
Agreement provides that a national health standard for food is presumptively legal if it conforms to a
standard, guideline, or recommendation established by Codex. A national standard that provides a
greater level of protection than Codex is a "trade barrier" unless the WTO decides that the stricter
national standard is based on a proper "risk assessment" that demonstrates that the Codex standard,
guideline, or recommendation does not provide sufficient protection or that the country maintaining the
stricter standard has other scientific justification. Article 2.4 of the TBT Agreement provides that
countries shall use Codex or other international standards "except when such international standards or
relevant parts would be an ineffective or inappropriate means for the fulfillment of a" legitimate
objective.
Compliance with standards is not a legal requirement, but in practice the U.S. market often
provides strong incentives for imported and domestic products to meet certain standards. Under the
Trade Agreements Act of 1979, federal government agencies are required to "take into consideration"
international standards when developing standards, and if appropriate, to base the standards on

47
international standards 18 . The recognized exceptions that justify a departure from an international
standard include national security requirements; prevention of deceptive practices; protection of human
health or safety, animal or plant life or health, or the environment; fundamental climatic or other
geographical factors; and fundamental technological problems 19 . The Act defines an international
standard as any standard that is promulgated by an organization "the membership of which is open to
representatives, whether public or private, of the United States and at least all [WTO] Members and that
is engaged in international standards-related activities" 20 .

E. Domestic Constraints and Market Linkage (Mr. YEM Sophal)

1. Organization related rice production
Seed constraints
Rice production is based mainly on seeds. Many types of seeds, which provide high yields and
relatively pest resistant, have been improved and developed by some key institutions like CARDI and
other private companies. CARDI alone has developed 37 kinds of seed including IR66, Phkarum Dual,
Senpidor which are the popular ones; and Neang Malis which is developed by Angkor Kasekam is also
well known for export. Even though, those many varieties of seeds have been improved and developed,
farmers still lack of widespread adoption of these varieties and they still prefer to use their own
traditional seeds and always obtained some seed for their next season production 21 . The use of
traditional varieties normally provide lower yield than the improvement ones (Yields of improved
varieties are averaging 6 to 7 tons per hectare 22 , while traditional variety yields is only 2.2 tons per
hectare) 23 . On the other hand, Cambodian farmers and consumers still prefer traditional (wet season)
varieties for their own consumption and the use of other improvement seeds, and other seeds for selling
to export. So, we notice that while the volumes of exports remain small relative to domestic
consumption, the adoption of improved varieties will continue to be constrained.

Fertilizer and Pesticide Constraints

The low yields are due in part to poor fertilizer application24 . As a consequence the yield of rice
is low and large amounts of fertilizer are needed in order to boost productivity. But the access to
affordable fertilizer and pesticides is constrained by infrastructure and budget problems. Most farmers
use fertilizer when they have sufficient surplus cash only because price of fertilizer is relatively high,

18
19 USC 2532, in addition to legislation, regulatory guidance issued by the Office of Management and Budget
includes obligations to consider the trade impact and evaluate the merits of using relevant international standards.
See WTO document G/TBT/W/258, 26 October 2005.
19
19 USC 2532.
20
19 USC 2571.
21
- JICA - JICA estimates that around 4-5 percent of paddy is reserved for seed use
22
- CARDI- In case of good management
23
- Young, Raab et al. 2000, pp. 10-11. AQIP (Agriculture Quality Improvement Project 2002)
24
- Cambodia-IRRI-Australia Project 1999, pg. 169

48
ranging from 28,000-55,000 Riel/50kg-sack which vary between locations. Any way, the main concern
of the farmers in using Chemical product like fertilizer and pesticide, is that most of those products
instruction are written in other languages other than Khmer. Hence, most of the farmer users do not
know the proper usage. There is a lack of understanding about correct application rates and the hazards
of mixing chemicals together. Any way, there is no quality assurance on fertilizer because some of them
have not produced properly from uncontrolled and unknown places, and as well as sell by trick traders
and no responsibility may cause harmful to rice or destroy land quality (CARDI staff).

Irrigation Constraints
The majority of rice production is from rain-fed production systems. More than 90% of wet
season rice cultivated areas is rain field lowland rice. In this ecosystem, rice is cultivated on a variety of
different soil types and under different rainfall intensities and patterns. The use of irrigation is limited.
Only about 13% of Cambodian rice growing area is irrigated or supplementary irrigated during the dry
season (Potential of the SRI for Cambodia-Jurgen Anthofer). Based on estimates of potential surface
irrigation resources, Cambodia is presently only utilizing between 50-60 percent of the potential
irrigation resource. If available surface water was fully utilized up to 1.67million hectares could be
irrigated 25 . There are varying accounts on the true state of agricultural irrigation in Cambodia.
According to official statistics, irrigation covers a total of 358,388 hectares of land in 2003, equivalent
to barely 10 percent of the total cultivated land in that year 26 . There are claims in other government
studies, however, which placed the extent of irrigation at 16 percent. A World Bank-sponsored study
stated that there are 946 irrigation systems in place in Cambodia covering 256,000 hectares in the wet
season and 143,000 in dry season, representing merely 2 percent of the country’s total land area 27 .
Some places use groundwater for irrigation, such as Prey Veng, Svay Rieng, Takeo and
Battambang. But, it is believed that the extensive use of groundwater resources for agricultural
irrigation is not feasible due to the low quantity of water, low and variable flow rates, poor recharging
capacity 28 . MOWRAM identifies lack of investment in new irrigation systems, limited budgets for
operation and maintenance of existing schemes, lack of agricultural research and extension services to
promote intensification of production in irrigated areas and lack of commercial opportunities to benefit
from agricultural production from irrigation as significant constraints to the development 29 .

Budget constrains
25
- World Bank Study Team Interview, July 2002
26
- (MAFF, CAMInfo version 2, Cambodia’s Socio-Economic Indicators Database, National Institute of Statistics,
Ministry of Planning, April 2005)
27
- AgriFood Consulting International, Rice Value Chain Study: Cambodia; A Report Prepared for the World
Bank, September 2002, p. 43
28
- World Bank Study Team Interview July 2002
29
- The Ministry of Water Resources and Meteorology (MOWRAM)

49
 The key issues cited by numerous farmers were the limited access to budget. To enlarge the
cultivated area or to improve their productivity, farmers need budgets, but the source of their budget is
limited. Farmers do not spend much of the money on their rice farms. Hence, most farmers produce
rice relies on natural condition only. In case of the urgent need to use money (i.e. to buy fertilizer,
pesticide and sometime to use for irrigation to cure rice in case of drought) generally, farmers borrow
money from traders, middlemen, or millers to secure their production, and will pay back in money or in
exchange for rice at the harvest time. Some times, farmers are often forced to borrow from
moneylenders at interest rates in excess of 20 percent per up to 40 percent per month, which is the high
one 30 . These high interest rates eat up of the farmer’s profit margin. So the lack of budget impede to the
improvement of rice production in Cambodia.

2. Rice processing and quality issues

Rice Mills
The milling operations are also involved in the production of rice in Cambodia and most of
millers have involved in the rice trading, exporters, but they face a number of significant constraints
that are:
- Lack of working capital: The limit of adequate working capital impedes the ability of millers
for purchases of paddy at the harvest time and for improvement milling technology, modernizing their
facilities and expansion in milling capacity.
- Low paddy quality: Most paddies are produced from mixed variety of seeds and inadequate
post harvest handling (particularly drying). This results in high level of broken rice and limits entry in
world market.
- Low level of milling technology: The majority of mills are used old or out of date equipment,
due to low paddy to rice conversion rate compare to some neighboring country (Table 15) There are
only two mills, Angkor Kasekam Roongroeung and MAN SARUN, are considered to use high standard
and modern machinery, but still not meet to the world standard requirement, especially in the term of
whitening and polishing the rice which need a lot of money to invest in those modern equipments; and
can not compete to the neighboring countries that use quite more modern one.
- High processing cost: the cost of processing is high comparing to the neighboring countries
due to the high price of petroleum and electricity.
- Lack of market access: All rice millers have limited access to the world markets because of
the inability to supply the consistent order amount from the customers. Once export markets have been
found, exporters find it extremely difficult to find the quantities and quality required rice to fulfill those

30
- World Bank Study Team Interview July 2002

50
orders 31 . “Finding markets are not the problems, but while we have them we just cannot supply the
quantities demanded” added Mr. Nov Saroeun. So, the unpredictability of Cambodian paddies supply is
another impediment to Cambodian rice export markets. Both suppliers and traders face the same
problem in finding the sufficient amount of rice to trade. This result from the poor of rice production
management to ensure adequate amount of paddies are produced and production means, i.e. irrigation
systems, drainage to recur rice field from flooding, adequate farming equipment and know-how.
- Limited knowledge of oversea market, due to the lack of information about foreign market
conditions, is another constraint to many other millers/exporters

Table 15: Paddy to Milled Rice Conversion Rate

Countries Conversion Rate

Lao PDR 0.60
Myanmar 0.62
Cambodia 0.63
Vietnam 0.65
Thailand 0.66
China, PR 0.70
Taiwan, China 0.73
Japan 0.73
Source: The World Bank, Private Sector Development, East Asia and Pacific Region 24 Global
Development Solutions, LLC

Storage
Unlike the storage of paddy, storage of rice is very difficult. We can not keep it for long period
of time, due to the lack of technology, said Mr. Nov Saroeun. So, rice needs to be bought and consumed
quickly. So far, Cambodian rice can not compete with the other export countries that they can keep the
rice more longer period of time. Any way, There are no major for rice’s storage facilities in Cambodia.
Most traders do not have either the capital to invest in speculative storage.

3. Farm-market linkages
Although Cambodia is the rice producing country, and has seen that the export of rice can help
to boost its economy, Cambodia still faces some significant problems in both productions and markets.
By interviewing with some farmers, most households produce rice just for sufficient consumption in the

31
- interviewed with Mr. Nov Saroeun, Deputy planning manager in MEN SARUN Imp & Exp Co. Ltd.

51
family only, this cause the lack of sufficient amount of paddy for export. Any way, farmers usually
produce rice from their traditional varieties to satisfy their own consumption and the domestic needs,
and sell paddy in case of surplus amount or when money is needed urgently for other purposes only.
They don’t mean to produce paddy in the intent to sell. Anyway, Because of the lack of transportation
mean and the poor infrastructure, such as bad road condition, farmers usually sell their paddy to miller
or collectors at their farms on price which set by these two kinds of buyers. These show farmers mostly
not access to market information in case of quality or kind of paddy requirement as well as price.

4. Transportation and Warehousing costs

There are some laws and regulations to control the transportation means such as:
- Sub decree on Maximum Limitation of Vehicle Weight on National Routes
- Declaration on Money Fine of Over-loaded Truck Weight on Route
- Sub-Decree Concerned with Demobilization and Creation of Posts Inspection along Border
Check Point established various kinds of checkpoints to control entry and exit along border check
points by roads, ships, railways and airlines in the Kingdom of Cambodia are under administration at
the central level. The Agencies responsible are National Police, Armies, CAMCONTROL Agent,
Customs and Excise Agents, Sanitary Vegetation Agents, and Medical Inspection Agents. These
checkpoints established at borders and cities are to monitor movement of goods and human beings.
Excessive checks caused by deficiencies in the tax system obstruct the smooth transport of goods 32 .
These many check point cause a lot of money to be paid to those agents, which adds high cost
to the products, but the money to be paid is not revealed.

Infrastructure
Cambodia’s overall poor road condition makes the transportation of rice from the production
areas to markets very expensive. The lack of efficient transportation infrastructures is aggravated by the
country’s heavy dependence on importation of petroleum. The other additional costs in transporting rice
resulting from informal taxation and bribes-unofficial fees. These unofficial fees contribute as much as
57 percent to the total transportation 33 . JICA estimates that infrastructure improvements would reduce
costs by 30-40 percent 34 .
Transportation costs in Cambodia are also considered extremely high and regarded as a major
barrier to domestic and international trade. Shipping charges in Cambodia are the highest in the region
and four times the cost for shipments of comparable size in Thailand 35 . Angkor Rice, for example,

32
- Japan International Cooperation Agency
33
- Trade Liberalization impact of rice on Cambodia - Oxfam - 03 November 2005
34
- Food and Agriculture Organization 1997
35
- FAS-USDA, op cit., p. 11

52
decided not to expand its export market to the US because the sea freight cost from Cambodia’s port to
the US west coast is prohibitive and will considerably eat up the company’s profit margin 36 .

Transportation cost of rice product

The transportation costs are considered the highest in the region. From Phnom Penh to Sihanoukville
Port (20 foot container)
1- Truck US$ 140
2- Road fee (NR4) US$ 13.86
3- Container scan USD 50
4- Vessel Loading fee US$ 87
5- Customs Inspection US$ 150
6- Camcontrol Inspection US$ 120

Total US$ 560.86

Source: Unofficial Interview with Shipping Company

5. Rice Marketing
Although Cambodia has produced the rice surplus reach to 568,563.9 tons of milled rice; and
although, Government’s new policy pays some attention to the issues surrounding rice marketing-
removing import and export quantity restriction and abolished the license, the sectors still face some
restrictions. Cambodia is not yet a player in the international rice export market. Its rice sector is
directly affected by the rice market situation in its two major rice-exporting neighbors. The rice market
system of Cambodia is not developed yet and still small and limited, this is because of Cambodia can
not supply to a huge consistent order amount from the oversea customers, due to fluctuation of rice
production and customers can not liable on the supply side.
Prices of rice in Cambodia are also not secure and floating, and not at all determined by
domestic factors, the main determinant of rice prices in the country is the current price of rice in the
rice-exporting neighbors 37 . Cambodia’s rice has not yet met the standard quality requirement, this result
from low processing equipment and technology. However, there is no efficient policy at this time for
improving or supporting rice milling facilities 38 . Foreign investments in rice milling require local equity
participation, such as through joint partnership schemes, to be determined through negotiations between
local and foreign investors. To date, rice milling, for example, remains a purely Cambodian industry

36
- Trade Liberalization impact of rice on Cambodia - Oxfam - 03 November 2005
37
- Trade Liberalization impact of rice on Cambodia - Oxfam - 03 November 2005
38
- Economic Institute of Cambodia 4 January-March, 2004

53
with thousands of small to medium-scale mills processing the paddy harvests of rice farmers. Majority
of these rice mills, however, are family-owned and only registered with local authorities as business
entities 39 . The distribution Channels of Cambodia’s rice is not widespread. Cambodian exporters always
sell their product through only the brokers who find the customers by themselves.

F. Political or instrumental options to promote the rice export (Mr. Chan Bonnivoit, Mr. Yem
Sophal and Mr. Kann Viseth)

1. Domestic Competitiveness
Factors endowment related to trade
It should be continually to undertake an effectively work and managements involved in land
reforms concerning with social land concessions and economic land concessions, because these
measures would be mobilized all force of the Country to use the land for the productions. Besides, it
should enhance formulating and enforcing of regulations against land grabbing and ensure land security
and equity to the poor and median rice suppliers.
It is concerned with the widespread use of agrochemicals, which may contribute to increased
production and trade volume, although it is a higher cost of inputs, especially fertilizers and pesticides
(seen chapter 2). The broader and longer-term effects of use of agrochemicals should be seriously
considered in the assessment of its costs and benefits regarding to the economic growth and the harm of
the human health and environment in the Country. Despite many open questions still to be investigated
by researchers for the use of fertilizers and pesticides, the appropriated use of fertilizers and pesticides
has proven to be a worthwhile practice to be promoted and should be included in any rice production.
But where is appropriate and economical, using the methods of the production as the System of
Rice Intensification (SRI) and a variety of fragrant rice like Neang malis, which allows for increased
production with reduced use of agrochemicals, can be also seen that those productions have a high cost
(Juergen Anthofer, 2004) and need good environmental or management conditions and more time to
care the plant compared to other methodologies of the traditional rice production. But regarding to the
health of the consumers and the environment, SRI and a variety of fragrant rice like Neang Malis
should be carefully considered also to extend this variety in throughout of the Country where rich soils
provide an optimal growing environment for them.
The land preparation is a crucial problem for Cambodian rice producers regarding to the high
cost of the gasoline and interest rate, in case using the tractor or the credit in buying the oxen. But in
term of the comparative advantage, the relative output from using tractor is higher than using of the
oxen for the rice producers. Therefore, to increase the competitiveness of the Cambodian rice supply in
the global rice trading system, Cambodian smallholder farmers should establish new organizational
forms like farmer Community that allow them to gain the benefit from the integration into the global
39
- Trade Liberalization impact of rice on Cambodia - Oxfam - 03 November 2005

54
rice trading system. In this case, for the area that land is extensively used, the establishing of the farmer
Community can reasonable arrange and have the high possibility to buy or rent the tractors to use for
the land preparation and also to improve the productivities and the yield in their Communities.
Cambodian labor productivity has remained relatively low compared to regional and
international competitors. Low labor productivity can partly affect on the low output of the rice yield
which is causing the low volume of Cambodian rice exports in regional and global rice trading system.
Small farms or low knowledge farmers will not be able to generate sufficient productive employment
for a growing labor force in the Cambodian rice production as well trade. The establishing of regional
training and support institutions as well improving the local extension service to assist the farmers is
significantly to improve those capacities and the productivity of the rice production as well the rice
trade in the Country. Improving the reasonable access in financing the farmers to access proper farming
implements and to install own small irrigation system could play also a big rule to increase the currently
low supplying and exporting of the Cambodian rice products.
The farm community is a very significant community based organization which can accelerate
the development process in the rural area. All stakeholders concerned should promote or provide the
incentive to establish the farmer community every province and region, and encourage the relevant
institutions to take the real action to develop those communities in order to transfer new technology,
information of market situation and so on. And this also helps all relevant Institutions easy to get
feedback in order to find out way for the development.
Some important macro-economic indicators like the price and exchange rate which can also
affect the flow of Cambodian rice trade and the inputs used for its production, should be carefully
facilitated and supported with the some macro-economic measures which can restraint these indicators
not to be harm or distorted the Cambodian rice trade.

Trade related measures (Suppliers side)

It should be enhanced the current domestic support for the rice production, in particular for
organic rice’s producers. Such supports can be exempted the income tax and VAT on agricultural
Inputs which can be improved productivities and efficiency of the rice production which can promote
the competitiveness and increase the volume of the Cambodian rice export. The exemption from the
agricultural land tax and income tax for the farmers, which is currently classified as decoupled income
supports of the Government (Green Box), should be maintained and concentrated but only on the land
which are currently used, because these measures can positively affect for the Country to move the non-
productive land into the productive land and to increase the state revenue.
What we reported at the component 2, the Government of Cambodia has yet involved much
kind of other supports to encourage the agricultural and rural development and other small scale
supports (Blue Box) which can be seen like providing credits with the low interest rate for the rice
55
producers, supporting improved quality’s seeds and irrigation systems etc. These domestic supports
measures should be considered as a priority and extended into the area facing lack of irrigation systems,
capital and appropriated technologies.
Water resources support the needs of many sectors of the economy. The greatest pressure on the
water resource accentuated by growing economic development activities occurs during the dry season
or extended period of drought, when the risk of pollution is the highest; on the other hand, excessive
water during rainy season causes floods leading to loss of lives and livelihoods and downward pressure
on national GDP. The priorities to consider about the irrigation system are the rehabilitation and
reconstruction of the existing irrigation and drainage systems, particularly in high poverty incidence
areas and along the border areas, expanding surface water storage capacity and promote water
harvesting technologies, promoting effective and sustainable use of ground water resources in areas
with scarce surface water availability, developing and apply measures on flood and drought mitigation
and agricultural water management, strengthening and expanding farmer water user communities and
promoting appropriate and effective river basin management and water allocation systems.
One of the most important aspects of enhancing the Cambodian rice productions and rice
supply is the further development of the energy sector to effectively respond to the increasing needs for
electricity in the agricultural sector. A domestic power generation, transmission and distribution system
will be put in place to meet the needs of rural communities and a growing economy. Generating and
making available low cost electricity would at once reduce costs of production in the rice sector and
costs of operation in all other sectors concerned with the Cambodian rice trade. To archive them it can
be considered to privatize all kinds of power generations and electricity sector, and its distribution
systems.
Rural Credit is an important ingredient for rural development, in particular for supporting rice
production and the creation and expansion of its trade. Much more funds will be needed to even
partially meet the huge demand for this rural credit. The most important challenge is to find ways and
means by which rural credit could be made available at much lower rates of interest than prevailing now
(48% per annum). To ensure increased and easy access to the poor for credit, especially for productive
purposes, it can be took any measures to expand, and reduce the high cost of, rural credit by exploring
and promoting institutions like user saving group and cooperatives, well known in some parts of Asia,
transforming NGOs doing this work into registered finance operators, improving supervision of such
institutions to ensure that they conform to standards and reducing the prevalent interest rates through
best practices like the policy of the Government for the “Blue Box”. Furthermore, Cambodia should be
improved the investment climate and actively continued liberalizing and accords national treatment to
all foreign investors, in particular all kinds of financial investment.

2. Domestic constraints and market linkage

56
 Infrastructure, irrigation system, seeds, fertilizer and pesticide are still seen to play the
important role in the rice production besides some invented know-how. So in order to improve rice
production as well Cambodian rice export, a number of measures concerning with improving the
domestic constraints should have been considered. RGC has to continues to try her best in the
commitment to build infrastructure system link the town to the rural area where has high potential and
competitive advantage in producing rice.
Ministry of Agriculture Fisheries and Forestry by collaboration with CAMCONTROL
Department of Ministry of Commerce should take the action to check and control to find out traders
who sell fraud fertilizer which harm to farmers’ budget as well as their rice and land quality. All rice
exporters should be cluster so that they can strengthen themselves in order to secure quantity and
quality supply, and ability to compete with foreign exporters, as Khmer proverb says “Many hand make
things better”. Government should take some measures to intervene on what we called unfair
competition which acts by some traders in the paddy collection buying activity especially outside
traders like Vietnamese traders. This unfair activity a big serious and harm to the fair trader (Angkor
Kasekam Roong Roeung has complained about this). Furthermore, the RGC should take action to
implement the SPS and TBT agreements in trading rice products.
Weaknesses in supporting agricultural services and disseminating information on market prices
and quality requirements, new varieties, and improved production and techniques is hampered by low
literacy, weaknesses in internal communications, and limited access to the media. Extension and
Information’s constraints are further constrained by weaknesses in quality standards that leave rice
producers vulnerable to the adulteration of agriculture inputs. Similarly, there are limited opportunities
for rice producers to verify measures of weight or moisture content and to trade their products. Rice
producer communities, farmer associations and research institutions can help address such concerns,
while also providing them with low cost access to information and supporting services. In the longer
term, increasing competition, and the need to preserve reputations, can provide powerful incentives for
rice millers and traders to deal honestly with the rice producers.
Agricultural processing and marketing is largely informal, except for the larger rice millers.
Agricultural products flow from small producers to consumers fairly quickly and through short
channels, given that storage and processing infrastructure is minimal. Producers either bring the rice
directly to local markets themselves, or sell to collectors (middlemen) who deliver to retailers in larger
market centres especially Phnom Penh. Some wholesale enterprises exist, especially for the rices that
may be transported to other provinces or exported to Thailand and Vietnam, but even these are informal
enterprises, often without fixed operating locations or storage space and with unmilled rice. But
Cambodia has a well developed, largely informal and micro or small scale agro-processing and trading
system, peopled by economically rational participants who respond effectively to perceived constraints
and opportunities. Therefore, Cambodia should improve some of the key elements on which a modern
57
production, processing, and marketing system will be built to stop the informal trade and exporting of
unmilled rice. Initiatives are needed both to remove the constraints, and to enlarge the perception of the
opportunities. An active commitment is needed from Government, to enabling and supporting the
leadership of the private sector for these improvements.
It remains continues to involve in food aid distribution through a state enterprise, Green Trade
Company (GTC), has responsibility for purchasing rice on behalf of the State, including the purchase
and storage of rice reserves required under the ASEAN Food Security Reserve Agreement. To secure
the food aid distribution and the food security reserve reminded above, the rices exporters should be
legally required to obtain a permit before exporting rice to the importing Countries. But a permit
doesn’t be considered as the restriction for the rice export, being only the documents to use as a
statistical data to warrant the above objectives.
Cambodia’s investment climate is still poor. The World Bank also ranked Cambodia near the
bottom of the list on business climate. The Cambodian government should be improved the investment
climate and actively solicits foreign private investment to boost its economic development, in particular
agriculture sector. Cambodia must continue liberalizing and accords national treatment to all foreign
investors, in particular all kinds of financial investment. Foreign ownership of land, foreign investors
using land through concessions, unlimited long-term land leases and renewable limited short-term
leases should be raised to consider for this liberalize policy. Besides, in practice, it should be also to
eliminate the currently complex and burdensome bureaucracy, corruption and any unofficial charge.
Other reforms which can significantly improve also the business environment of the Country are trade
facilitation reform program. It should be careful took into account and to consist with the trade
facilitation WTO agreements.

3. Market access
The political or instrumental options for Cambodian Rice Export Promotion in Post-WTO
Accession of Cambodia present key finding from studies conducted as part of the project and other
relevant points. The central question of the whole project is how the Cambodian can continue to
develop the rice trade under the conditions of market access to the world market, which is represented
by its accession to ASEAN and the WTO integration. The agreement on agriculture provided many
benefits to least developed countries such as Cambodia. The agreement required all member countries
to eliminate non-tariff barriers, transfer them into tariff barriers and gradually reduce them. As a least
developed country, Cambodia should continue to maintain current import tariffs on agricultural
products. This factor provides a better possibility for Cambodia to expand its export rice products and
attract investment in this area as well.
Rules that reduce the support provided by other countries to their efficient producers will
therefore ultimately be to the benefit of Cambodia. Tariff rate Quotas expanded in both developed and
58
developing countries and MFN principal among members have also created important factors for
Cambodian rice exports. We believe that that Cambodia is a competitive or potentially competitive
agricultural producer across a broad range of agricultural products in which rice is also playing a big
role. As mentioned above, however, we understood that we would need to maintain minimal, but
adequate, tariff protection of agricultural products, and maintain our right to provide support to
domestic producers that genuinely assists them in becoming more competitive.
As market access improves with entry into the WTO and ASEAN, there will be large gains to
be made by Cambodia in those areas where it has a comparative advantage, such as rice, rubber, wood,
and some processed food. Cambodia’s success or failure is depends to large extent not only on its
ability to balance its rights and obligations under the multilateral trading system, but as well on how the
country positions itself to take advantage of the broad opportunities and challenges of regionalism and
globalization. Therefore, Cambodia must continue to negotiate bilateral-and multilateral to open the
market and to get GSP or QF & DF market access into large Countries in order to attract FDI and to
reduce tariff or low tariff for Cambodian rice exports.

G. Conclusion
Although Cambodia has made significant progress in addressing the weaknesses in land
allocation procedures, the proportion of rural households lacking land for cultivation has risen from 13
percent in 1997 to 16 percent in 1999 and 20 percent in 2004. In order to reduce such negative impacts
it should be continually to undertake an effectively work and managements involved in land reforms
concerning with social land concessions and economic land concession. Furthermore, it should be
enhanced formulating and enforcing of regulations against land grabbing and ensure land security and
equity to the small and medium rice suppliers.
Concerning with the improvement of the productivities, Cambodia still is one of the lowest
levels of rice yields in the region. To solve the problem the farm community and the local institutions
concerned are a very significant community based organization which can accelerate the development
of productivities in term of using and transferring new technology, information of market situation and
so on. In addition, farm community can also helps all relevant institutions easy to get feedback in order
to find out way for the development of the rice sector.
Despite increasing the yields, but using of non-appropriated inorganic and organic fertilizer and
land preparation still account for the highest cost of the production phase in the rice production.
Therefore, the appropriated use of fertilizers and pesticides has proven to be a worthwhile practice to be
promoted and should be included in any traditional rice production. And regarding to the health of the
consumers and the environment, SRI and using of a variety of fragrant rice like Neang Malis should be
carefully considered also to extend these technologies in throughout of the Country where rich soils
provide an optimal growing environment for them.
59
 While MOWRAM has responsibility for technical aspects of large scale systems, small and
medium scale projects are responded by the provincial department. However, we saw irrigation area
covers only 10 percent of the total cultivated land. Like recommendation in the 5 component, expanding
surface water storage capacity and promote water harvesting technologies, promoting effective and
sustainable use of ground water resources in areas with scarce surface water availability, developing
and apply measures on flood and drought mitigation and agricultural water management, strengthening
and expanding farmer water user communities and promoting appropriate and effective river basin
management and water allocation systems should be took in to account.
Cambodia still lack of Credit Providers for the rice producers and processors and has a high
cost of using credit. Therefore, Rural Credit is an important ingredient for rural development, in
particular for supporting rice production and the creation and expansion of its trade. To ensure increased
and easy access to the poor for credit, especially for productive purposes, it can be took any measures to
expand, and reduce the high cost of, rural credit by exploring and promoting institutions like user
saving groups and cooperatives, well known in some parts of Asia, transforming NGOs doing this work
into registered finance operators, improving supervision of such institutions to ensure that they conform
to standards and reducing the prevalent interest rates through best practices like the policy of the
Government for the “Blue Box”. Furthermore, Cambodia should be improved the investment climate
and actively solicits foreign private investment to boost its economic development, in particular
agriculture sector. Cambodia must continue liberalizing and accords national treatment to all foreign
investors, in particular all kinds of foreign financial investment.
Although MAFF, CARDI and NGOs have put emphasis on researches and extension, those
agricultural extension services also fail to meet the demands of farmers especially cash crop producers.
Besides, Cambodian labor productivity has remained relatively low compared to regional and
international competitors. Low labor productivity can be partly affected by low knowledge and no-
sufficient productive employment in the Cambodian rice production as well trade. The establishing of
regional training and support institutions as well improving the local extension service to assist the
farmers is significantly to improve those capacities and the productivity of the rice production as well
the rice trade in the Country. Improving the reasonable access in financing the farmers to access proper
farming implements and to install own small irrigation system could play also a big rule to increase the
currently low supplying and exporting of the Cambodian rice products.
Government maintains the exemption of the agricultural land tax which focus only used land
better than exempting of all kinds of land, and income taxes and involved to encourage the agricultural
and rural development, and other small scale supports. In addition, Cambodia should continue to have
liberal market accesses for all kind of imported agricultural inputs with the consistence of the WTO
agreements and try reasonable in coordinating some macro indicators like exchange rate and inflation
which can be also distorted on Cambodian rice trade.
60
 Most farmers’ household produce rice just for sufficient consumption in the family, they are not
prepare or do not tempt to produce for export. To address such concern it can be that the rice producer
communities, farmer associations, rice processors and traders as well research and extension institutions
can play a significant role to help or persuade the farmers to think or to convert their traditional
production into the market production. In particular, they should also provide them with low cost access
to all kinds of information, credits and services.
Cambodian rice traders have limited ability to buy and store paddy for fulfilling order
requirement. Finding markets are not the problem, but while they have them they just cannot supply the
quantities or qualities demanded. Limited knowledge of oversea market, due to the lack of information
about foreign market conditions, is another constraint to millers/exporters. To address such issue the
farm communities or/and farm associations, rice exporters or rice processors and the institutions
concerned like TBT and SPS enquiry points should work together in order to produce the rice products
base on the required qualities and quantities. Furthermore, establishing “one village one product” can be
also addressed such concern.
Overall poor infrastructure and transaction cost are still a significant element to impede the
exportation. So in order to improve rice production as well Cambodian rice export, a number of
measures concerning with improving the domestic constraints should have been considered. RGC has to
continues to try her best in the commitment to build infrastructure system link the town to the rural area
where has high potential and competitive advantage in producing rice. Besides, in practice, it should be
also to eliminate the currently complex and burdensome bureaucracy, corruption and any unofficial
charge. Other reforms which can significantly improve also the business environment of the Country
are trade facilitation reform program. It should be careful taken into account and to consist with the
trade facilitation of WTO agreements.
The agreement on agriculture provided many benefits to LDCs regarding to eliminate non-tariff
and tariff barriers, and domestic supports. As a least developed country, Cambodia should continue to
maintain current liberal import tariffs on agricultural products and to reserve the right to support the
domestic rice producers. This factor provides a better possibility for Cambodia to expand its export rice
products and attract investment in this area as well.
Tariff rate Quotas expanded in both developed and developing countries and MFN principal
among members created important factors for Cambodian rice export. We believe that Cambodia is a
competitive or potentially competitive agricultural producer across a broad range of agricultural
products in which rice is also playing a big role. Therefore, Cambodia must continue to negotiate
bilateral-and multilateral to open the market and to get yet GSP or QF & DF market access into large
Countries like US and Japan.

61
APPENDIX

Output milestone of the research project

1. Study goals and objectives:

Name of research project Goals and objectives

Cambodian Rice Export Promotion in Post-WTO • To assess the structures and conditions of Cambodia trade in rice
Accession • To assess the market accesses of Cambodia rice export
• To analyse the constraints of Cambodia trade in rice
• To develop the political or instrumental options to promote Cambodia rice export

2. Milestones, research methodologies and mentor coordination program:

Output Milestone Task Methodology Resource

Timing
Research work plan Submit research Communication with Trainer and Research Team 31 Oct 06
work plan to Mentor Mentor through E-Mail

Feedback on outline Written and verbal comments Mentor First week

Email/phone correspondence to second
week, Nov
Work plan approved Written and verbal comments Trainer, Mentor 06
Email/phone correspondence
Summary Outline Submit summary Review of initial documents and Research Team Third week,
(including research components and outline to Mentor research components Nov 06
recommendations) (specify number of
pages per research
component)

Feedback on outline Written and verbal comments Mentor

Email/phone correspondence
Output Milestone Task Methodology Resource
Timing
Research component 1 Complete Research Literature review of relevant Mr. YEM Sophal From fourth
Current structures of Cambodia’s rice exports documents Mr. CHAN Bonnivoit week Nov to
- International trade in rice Secondary data, related documents fourth week,
- Export quantity and markets (China, Japan, Data from related Ministry Dec 06
South Korea, and US) Internet search/desk research
- Past pattern of Cambodia trade in rice
- Current patterns of Cambodian trade in rice
(e.g., Thailand and Vietnam)
- Trade preferences
Research Component 2 Complete Research Collect primary and secondary data Mr. CHAN Bonnivoit From fourth
Cambodia competitiveness for trade in rice including sources from Government week Nov to
- Resource and factors endowments Institutions and other Institutions fourth week,
- Price and exchange rate concerned, etc. Dec 06
- Policies to promote rice supply Review of WTO, ASEAN website
- Policies on trade liberalization in the rice and third Countries documents
sector concerned
- Cambodia trade policy under AOA framework Internet/desk research
- Cambodia commitments to bilateral and
multilateral trade agreements
- Cambodia rice trade facilitation
Output Milestone Task Methodology Resource
Timing

63
 Complete Research Collect primary trade data, Mr. KANN Viseth From fourth
Research Component 3 Review of secondary data, access week Nov to
Market accesses from WTO, ASEAN and Government fourth week,
- Multilateral commitments under the WTO AoA websites Dec 06
- Doha development agenda Literature reviews
- Current WTO agriculture negotiation Internet search/desk research From fourth
- Preferential market access (e.g., GSP week Nov
preferences, ASEAN + arrangements, 06 to fourth
Cambodia bilateral agreements) week, Jan
- Tariff and non tariff barriers (e.g., TRQs, TBT 07
and SPS)
Research Component 4 Complete research Interviews with related companies, Mr. YEM Sophal From fourth
Domestic constraints and market linkage Non governmental organizations week Nov to
- Marketing and production and other related government fourth week,
- Farm-market (domestic and overseas) agencies and Ministries concerned Dec 06
linkages through survey/questionnaire
- Transportation and warehousing costs Analysis of results of surveys
- Rice processing and the quality issues
- Organizations related rice production

Output Milestone Task Methodology Resource

Timing

64
Research Component 5 Complete research Analysis of research components 1- Mr. CHAN Bonnivoit From fourth
Political or instrumental options to promote the rice 4 Mr. KANN Viseth week Nov to
export Mr. YEM Sophal fourth week,
- Trade related factors endowment: including Dec 06
efficient using of land, resources and other
factor endowed in the Country From fourth
- Trade related measures: including domestic week Nov
support for rice and organic rice production, 06 to
processing, warehousing and marketing, second
infrastructure, tax and other investment week, Feb
incentives, credits, research and technical 07
assistances
- Direct trade measures: including direct
exports, transport and trade facilitation, trade
deregulation and export licensing reforms
- Market access strategy: including WTO
negotiations on LDC market access and
agriculture negotiations, ASEAN +, bilateral
negotiations and GSP

Draft Report (all research components) First draft report Consolidate all research Research Team From first
components, introduction and week to
executive summary, incorporating second
Mentor comments week, Jan
07
Submit all research Consolidation of all research Research Team
components to components From third
Mentor week to
fourth week,
Feedback from Written and verbal comments Mentor Feb 07
Mentor Email/phone correspondence

Output Milestone Task Methodology Resource

Timing

65
Regional Progress Workshop - Review and Workshop with Mentor and Trainer Research team, 15-18 Jan
discuss project to Mentor and Trainer 07
date
- Feedback on
progress
- Revise research
according to
workshop outcomes

Draft Report (all research components) Complete draft Consolidate all research Research Team From first to
report components, introduction and third week,
executive summary, incorporating Mar 07
Mentor comments

Submit Complete Complete Report Research Team

Draft Report to
Mentor
Feedback on Written and verbal comments Mentor
complete draft Email/phone correspondence

Final Report Submit Final Report Draft report including introduction Research Team Fourth
to Mentor and executive summary, referencing week, Mar
and bibliography 07

Comments on final Written and verbal comments Mentor

study Email/phone correspondence

Final Report Final report incorporating Mentor Research Team

completed comments

In-country Policy Advising Workshop Discuss final report Workshop with Trainer and Mentor Trainer, Mentor, 3-5 Apr 07
Researchers
Dissemination Disseminate study Final Workshop 24-25 Apr
results 07

Remark: Ab = Completed; Ab = Changed

66
3. Research Budget:

Description of Expenses Estimated funds

Documents and Statistics US$290

- Reports (statistics purchasing,
Questionnaire conducting)
- Books for references
- Access data from internet

EE industry excursion US$350

- Transportation expenses

Communication expenses US$200

- Phone calls
- Fax

Draft reports US$400

- Printing / photocopying / binding
- Office accessories

TOTAL US$1,240

67
TARP ROUND 2 ACTIVITY 2.3 FRAMEWORK FOR PRESENTATION BY RESEARCH TEAMS ON
RESEARCH PROJECTS

In the first part of this activity, Research Teams are required to present a report on the research project
using the format set out below. They are asked to complete a report following the format below and
prepare a PowerPoint presentation using the same format. (In the right hand column an example is
provided. That should be deleted)

This should be prepared before the Policy Advising Workshop and cleared with the Mentors before the
Workshop.

It is a duty of Mentors to ensure research teams prepare this presentation before the Activity.
Section of report What it should cover
1. Aim of the Study To develop policies and instrumental options to promote Cambodian rice export
in post WTO accession
2. Details of - Mr. Chan Bonnivoit, Team Leader, Official of WTO Office, ASEAN and IOs
research team Department, Ministry of Commerce
- Mr. Kann Viseth, Research Team, Official of WTO Office, ASEAN and IOs
Department, Ministry of Commerce
- Mr. Yem Sophal, Research Team Official of International Coordination Office,
ASEAN and IOs Department, Ministry of Commerce
- Mr. Michael Young, Mentor, TARP Projects Manager
3. Summary of the - Date - project approved : Sept 2006
research work - Date - In-Country briefing course : 16-19 Oct 2006
program - Date - Research program agreed : 31 Oct 2006
- Date - Regional Workshop : 13-17 Nov 2006 (Hoi An, Vietnam)
- Date - Research began : Fourth week Nov 2006
- Date - completion of drafts, interactions with Mentors :
Fourth week, Feb 2007
- Date - Regional Workshop : 15-18 Jan 2007 (Siem Reap)
- Date - completion of drafts, interactions with Mentors :
Third week, Mar 2007
- Date - Final version : Fourth week, Mar 2007
- Date - In-Country Policy Advising Workshop : 3-5 Apr 2007
- Date - Dissemination Seminar : 24-25 Apr 2007
4. Research Cambodia competitiveness for trade in rice:
Conclusions - Although Cambodia has made significant progress in addressing the weaknesses
in land allocation procedures, the proportion of rural households lacking land for
cultivation has risen from 13 percent in 1997 to 16 percent in 1999 and 20
percent in 2004.
- Despite the improvement of the productivities, Cambodia still be one of the
lowest levels of rice yields in the region
- Using of non-organic and organic fertilizer and land preparation account for the
highest cost of the production phase
- While MOWRAM has responsibility for technical aspects of large scale systems,
small and medium scale projects are responded by the provincial department.
Currently, we saw irrigation area covers only 44.48 percent of the total cultivated
land.
- Lack of Credit Providers for the rice producers and processors
- Although MAFF, CARDI and NGOs have put emphasis on researches and
extension, those agricultural extension services also fail to meet the demands of
farmers especially cash crop producers
 - Government maintains the exemption of the agricultural land tax and income
taxes and involved to encourage the agricultural and rural development, and other
small scale supports.
- Cambodia has more liberal trade and market accesses for all kind of agricultural
inputs and rice products, and a consistence with the WTO agreements.

Domestic constrains and market linkage:

-Most farmers’ household produce rice just for sufficient consumption in the
family, they are not prepare or do not tempt to produce for export
-Unpredictable paddy supply
-limited ability of traders to buy and store paddy for fulfilling order requirement
-Overall poor infrastructure and transaction cost are still a significant element to
impede the exportation

Market access :
- The agreement on agriculture provided many benefits to LDCs regarding to
eliminate non-tariff and tariff barriers.
- Tariff rate Quotas expanded in both developed and developing countries
- WTO special rule for LDCs in term of domestic supports, but not distorting to
trade
- MFN principal among members created important factors for export.
- The world market for rice is highly influenced by subsidies as such US, Japan
and South Korea.
- Tariff of rice products of those Countries is still high and Quotas are remained.
a. Research - Experience using resources used in this project
experience - Experience in working collaboratively with personnel from another agency and
stakeholders concerned
- Gain knowledge and understanding of the domestic competitiveness of
Cambodian rice supply
- Experience examining the domestic constraints of market linkage of rice supply
and the market accesses of the target Importing-Countries
- Experience formulating the political options or recommendations to promote
Cambodian rice exports
- Experience how the research has been structured
5. Policy issues
arising from the
research
a. Policy problems What determines Cambodian rice export promotions?
- Do current agricultural tax and investment policies impede Cambodian rice
export?
- Do current markets access policies of some Countries distort Cambodian rice
export?
- Do unregulated export of paddy impedes milled rice export and lost the value
added and jobs?

69
b. Changes - Continue to undertake an effectively work and managements involved in land
required reforms (social and economic land concessions)
- Consider to liberalize land use and land ownership for foreign investors
- Promote using of organic rice production and appropriate using of non-organic
fertilizer rice production
- Establish the farm community easier to transfer the modern technology and the
information
- Establish regional training and research institutions
- Attract and convince all kinds of the financial investments and direct
investments
- Continue to maintain tax exemption on used land, farmer income tax and
agricultural input tax
- Accelerate irrigation system and infrastructure development
- Generating and making available low cost electricity
- Promote fair competitions and take action to implement the SPS and TBT
regulations
- To stop formal and informal export of paddy rice
- Continue to negotiate bilateral– and multilateral to open the market and to get
the GSP
c. Follow up steps - Meeting, raising the questions and consultation with the stakeholders concerned
- Collecting the data concerned
- Writing the report and raising the right policy options
- Providing the workshops and seminars to dissemination of the information
- Implementation and monitoring the policies changed
- Evaluation of the implementation

70
TARP ROUND 2 ACTIVITY 2.3 - FRAMEWORK FOR PLAN FOR POLICY IMPLEMENTATION

In the second phase of the Policy Advising Workshop, Research Teams are to conduct workshops to
develop plans to demonstrate how policies should be developed and implemented to achieve the goals set
out in the research projects.

The focus will vary according to the conclusions in each research project.

The aim is to simulate a real workplace activity. Research teams are to assume they have the responsibility
of laying down a plan which will implement the goals identified in their research projects. They are to
envisage they have been asked by a senior official to demonstrate how to implement the policy goals.

They are to use the framework set out below.

Mentors and Trainers are to facilitate this work by the Research Teams.

This report will be presented at the Dissemination Seminar.

Preparing and Implementing Policy to achieve the objectives of the Research Studies

(The report should follow the structure in the first two columns. The third column provides examples of answers. Participants
should substitute other examples they consider relevant)

Issue Action
1. What is the policy goal? - To assess Cambodian competitiveness for trade in rice
- To assess the market accesses of Cambodian rice
To develop policies and - To assess the constraints of Cambodian trade in rice
instrumental options to - To find out political framework to be implemented
promote Cambodian rice
export
2. What conclusions did the Cambodia competitiveness for trade in rice:
research report reach? - Although Cambodia has made significant progress in addressing the
weaknesses in land allocation procedures, the proportion of rural
households lacking land for cultivation has risen from 13 percent in
1997 to 16 percent in 1999 and 20 percent in 2004.
- Despite the improvement of the productivities, Cambodia still be one
of the lowest levels of rice yields in the region
- Using of non-organic and organic fertilizer and land preparation
account for the highest cost of the production phase
- While MOWRAM has responsibility for technical aspects of large scale
systems, small and medium scale projects are responded by the
provincial department. Currently, we saw irrigation area is estimated to
be about 44.48 percent of the total cultivated land.
- Lack of Credit Providers for the rice producers and processors
- Although MAFF, CARDI and NGOs have put emphasis on researches
and extension, those agricultural extension services also fail to meet the
demands of farmers especially cash crop producers
- Government maintains the exemption of the agricultural land tax and
income taxes and involved to encourage the agricultural and rural
development, and other small scale supports.
- Cambodia has more liberal market accesses for all kind of agricultural
imported Products and consistence with the WTO agreements.

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3. What policy issues were
raised or have to be
answered if change is to be
made.
a. Is more information or
more research required?
b. What change is required?
Domestic constraints and market linkage:
-Most farmers’ household produce rice just for sufficient consumption
in the family, they are not prepare or do not tempt to produce for export
-Unpredictable paddy supply
-limited ability of traders to buy and store paddy for fulfilling order
requirement
-Overall poor infrastructure and transaction cost are still a significant
element to impede the exportation
Market Access :
- The agreement on agriculture provided many benefits to LDCs
regarding to eliminate non-tariff and tariff barriers.
- Tariff rate Quotas expanded in both developed and developing
countries
- WTO special rule for LDCs in term of domestic supports, but not
distorting to trade
- MFN principal among members created important factors for export.
- The world market for rice is highly influenced by subsidies as such US,
Japan and South Korea.
- Tariff of rice products of those Countries is still high and Quotas are
remained.
- Continue to undertake an effectively work and managements involved
in land reforms (social and economic land concessions).
- Consider to liberalize land use and land ownership for foreign
investors.
- Promote using of organic rice production and appropriate using of
non-organic rice production.
- Establish the farm community easier to transfer the modern
technology and the information.
- Establish regional training and research institutions.
- Attract and convince all kinds of the financial investments and direct
investments.
- Continue to maintain tax exemption on used land, farmer income tax
and agricultural input tax.
- Accelerate irrigation system and infrastructure development.
- Generating and making available low cost electricity.
- Promote fair competitions and take action to implement the SPS and
TBT agreements.
- To stop both formal and informal export of paddy rice
- Continue to negotiate bilateral– and multilateral to open the market
and to get the GSP.
- Research the ability to attract the investments on rice sector.
- Research on economic comparative advantage between the producing
of organic and non-organic rice.
- Research for effective marketing to promote the rice trade.
- Research to compare the economic benefits of exporting unmilled and
milled rice.
- Establish the farm community as many as possible easier to transfer
the modern technology and the information.
- Establish regional training and research institutions.
- Attract and convince all kinds of the financial Investments and direct
investments in the rice sector.
- Continue to maintain tax exemption on used land, farmer income tax
and agricultural input tax.
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 - Accelerate irrigation system and infrastructure development.
- Generating and making available low cost electricity.
- To stop formal and informal export of paddy rice.
- Continue to negotiate bilateral– and multilateral to open the market
and to get the GSP.
4. How are changes made?

a. Who should initiate the - Ministry of Commerce

changes? - Ministry of Agriculture, Forestry and Fisheries
- Council for development Cambodia
- Ministry of Economic and Finance
- Ministry of Water Resource and Meteorology
- Stakeholders concerned
b. What is the process to - Promoted and supported by the Ministries and Stakeholders to
initiate change? establish the farmer community and farmer association.
- Approved by Ministry of Commerce some regulations to stop the
informal and formal export of paddy rice.
- Continue to implement the tax exemption, to develop irrigation and
infrastructure system and to negotiate open the market for rice products.
c. Are additional resources - Human and capital resources are required to implement the policies
required to make the change? recommended.

5. How are social and

economic impacts taken
into account in designing
the strategy

a. Will the changes have social Positive impacts:

and economic impacts?
- Getting effective farmer community easier to contact in term of
development processes and doing marketing of their rice products.
- Increasing the productivities of the rice production.
- Creating the jobs.
- Expanding the market accesses and increasing the volume of rice
export.
- Expanding the investments in this sector.

Negative impacts:
- Difficult to adopt the new technology because our farmers still face
limited knowledge.
- Distorting the informal and formal paddy rice exporters.
- Farmers lost opportunity in price competition.
- Loss of the state revenue because of tax exemptions.
- Government spends a lot of budget on the development of irrigation
and infrastructure systems.
- Poor farmers can lose land for rice production.

b. Will those impacts make it - No, because we guess that the positive social and economic impacts
difficult to implement the are larger than the negative.
changes?

c. How should these impacts - The loss of the state revenue can be compensated with increasing
be taken into account in volume of rice exports and expanding the productivities of agricultural
development and sector.
implementation of the - Provide some social and administrative incentive for milled rice

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strategy? exporter.
- Strengthen the support to farmer community.
6. What is the plan for - Collecting the data concerned
implementation? - Meeting, raising the questions and consultation with the stakeholders
concerned
- Writing the report and raising the right policy option
- Providing the workshops and seminars
- Dissemination of the information
- Implementation and monitoring the policies changed
- Evaluation of the implementation

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