Incentives for Companies Supporting Farmers REF#6173

22 Sep 2023 | Agribusiness Issue Tackled

Last modified date: 22 Sep 2023

Issue Description

The Royal Government of Cambodia (RGC) is committed to combating climate change and accelerating the transition to a climate-resilient, low-carbon sustainable mode of development. The RGC has supported global efforts against climate change by being a Party to the United Nations Framework Convention on Climate Change (UNFCCC) since 1996. Cambodia adopted and ratified the Paris Agreement by which the country submitted an ambitious Intended Nationally Determined Contribution (NDC), which showcased the country’s progress in climate policy, and put forward mitigation targets and adaptation actions consistent with the national circumstances. Furthermore, Cambodia has also modelled a credible scenario for carbon neutrality by 2050 and has put forward a Long-Term Strategy for Carbon Neutrality (LTS4CN) that presents a policy scenario to realise a vision of a carbon neutral and resilient society within the next 30 years.

To combat the impacts of climate change, a comprehensive approach has been adopted, focusing on both mitigation and adaptation measures. The LTS4CN and the NDC emphasise the need to reduce the flow of greenhouse gases into the atmosphere, while also preparing for the expected climate change.

Mitigation efforts aim to reduce the sources of greenhouse gas emissions or increase the sinks that absorb them. For instance, transitioning to renewable energy sources or enhancing carbon sequestration in forests and soils. Meanwhile, adaptation strategies aim to minimise the risks posed by climate change, such as more severe weather events or food insecurity. This involves adjusting to changing climate conditions, such as using advanced farming techniques and improving post-harvesting processes.

The LTS4CN and NDC prioritise activities that promote sustainable land management, including Conservation Agriculture (CA), as both a mitigation and adaptation measure. CA minimises soil disturbance, maintains permanent soil cover, and diversifies plant species. Additionally, it emphasises the need for improved quality, safety, and agro-business enhancement to enhance resilience and adaptability in the agricultural sector.

However, achieving these measures to secure the sustainability in agriculture can be challenging, particularly for small-scale farmers who may lack the knowledge and resources needed to adopt sustainable farming practices. This is where technical assistance from companies can play a critical role.

One of the significant challenges in sustainable production is the increasing pressure on natural resources, such as land, water, and biodiversity. Climate change further exacerbates the situation, causing unpredictable weather patterns, extreme weather events, and a higher incidence of pests and diseases. By providing technical assistance, companies can help farmers adopt sustainable agricultural practices which contribute to conserving resources, reducing greenhouse gas emissions, and enhancing soil fertility. Moreover, technical assistance can empower farmers with the knowledge and skills needed to increase productivity and make them more competitive in the market.

Another challenge faced by farmers is the lack of access to modern technologies, quality inputs, and financial services. Companies that invest in technical assistance can bridge these gaps by facilitating the transfer of innovative technologies, providing farmers with access to high-quality seeds, fertilisers, and equipment, and linking them with financial institutions. This support can enable farmers to invest in their farms, adopt new practices, and ultimately improve their livelihoods.

However, technical assistance and trainings to farmers are primarily in the domain of donor-funded development projects and there is a need for private firms and companies to get involved to accelerate the adoption of sustainable production and agricultural practices.

Impact on business

Inadequate investment in technical assistance for Cambodian farmers could have far-reaching negative consequences for the nation’s economy and its agricultural sector.

The absence of proper financial and technical support may lead to reduced productivity, for instance. Farmers may be unable to adopt new farming techniques and technologies, which could lead to lower yields and increased costs. It may also perpetuate inefficient farming practices. Farmers may continue to use outdated methods that are harmful to the environment and less productive. Moreover, it may bring a loss of market opportunities: Cambodian farmers may be unable to meet the growing demand for high-quality agricultural products, which could lead to lost export markets and reduced income. In addition, inadequate technical assistance could exacerbate existing environmental issues, such as soil degradation and water pollution. Unsustainable farming practices can lead to the depletion of natural resources, which could have a negative impact on the country’s long-term economic growth and food security. Finally, the lack of proper support for farmers could increase rural poverty and widen income disparities. Without access to the resources they need to be successful, farmers may be unable to escape poverty.

Recommendation

  • Provide economic incentives for companies investing in training and technical assistance to farmers.

To mitigate these risks, it is crucial to create economic incentives for companies to invest in the training and technical assistance of Cambodian farmers. By supporting farmer education and capacity-building, companies can help boost agricultural productivity, enhance market competitiveness, and promote sustainable farming practices. This, in turn, would contribute to a more robust agricultural sector, improved food security, and a stronger Cambodian economy.

Therefore, we respectfully recommend that the Royal Government of Cambodia and the relevant ministries consider the following policy measures:

  • Provision of tax credits or exemptions to qualifying companies that invest in farmer training and technical assistance programmes. These tax breaks can reduce the cost of the investment for the company and encourage them to continue providing these services;
  • Provision of grants and subsidies to qualifying companies that invest in farmer training and technical assistance. These funds can be used to offset the cost of providing these services or to expand the programme to reach more farmers;
  • Provision of low-interest loans to qualifying companies that invest in farmer training and technical assistance. This can help the company to finance the programme and provide the necessary resources to train farmers;
  • Facilitate certification and accreditation programmes for companies that invest in farmer training and technical assistance. This can help to establish the company as a reputable provider of these services and encourage more farmers to participate in the programme;
  • Negotiate trade agreements that provide preferential treatment to companies that invest in farmer training and technical assistance. This can help to increase demand for these services and provide a competitive advantage to the companies that provide them.

We believe that these recommendations would help to create a more favourable environment for companies to invest in the training and technical assistance of Cambodian farmers. This, in turn, would help to boost agricultural productivity, enhance market competitiveness, and promote sustainable farming practices, which would benefit the entire country.

Dialogue with

Royal government of Cambodia

Initiative from Eurocham: The issue has been raised by the Agribusiness Committee within The White Book edition 2024 in the Recommendation No. 19.

No response from the Royal Government of Cambodia

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