UN backs economic diversity in rural areas

Photo by: JULIE LEAFE
UNCDF Chief Technical Advisor Nicola Crosta discusses the organisation's latest report in Phnom Penh on Wednesday.

via Khmer NZ News Media

Thursday, 01 July 2010 15:00 Jeremy Mullins and Souen Say

CAMBODIA’S rural workers are diversifying from farming as their sole source of income in a move that could help promote sustained economic development in the countryside, a United Nations Capital Development Fund (UNCDF) report released today has found.

Although it is estimated that most of the domestic working population is employed in rice farming, according to the UNCDF rural economies have an “enormous unexploited potential for economic diversification”.

According to the “Local Development Outlook”, which strongly advocates government de-centralisation, three years ago 92 percent of all Cambodian classed as ‘poor’ lived in rural areas.

It highlights that while agricultural development is important for the Kingdom, a “diversification” of rural economies and a “localised” policy approach could be methods to stimulate countryside economic growth, therefore raising populations out of poverty.

“The current mainstream policy approach to rural development across most of Cambodia is focused on agriculture and on the provision of social public goods, or social safety-nets. These are essential, necessary policies, but often not sufficient to promote local economic development,” the report stated.

Lead author and UNCDF chief technical advisor Nicola Crosta told the Post on Wednesday that workers are already moving into other fields, such as tourism, as the use of agricultural machinery increases.

“It’s important to start thinking ahead [for rural development], and not fall into trap that rural areas are synonymous with agriculture,” he said.

Government officials said Wednesday that they recognised the importance of decentralisation, but chose to highlight increased rice yields as a means to improve the lot of the rural poor.

Secretary of State for the Ministry of Agriculture, Forests and Fisheries Chang Tong Yves, said: “It is very good to use machinery for rice crops as it can increase production. It is very important to improve [farmers] living conditions and also grow Cambodia’s economy.”

He highlighted rural infrastructure – such as irrigation systems – as a way to improve living conditions.

But the report warned: “While infrastructure is important, this shall not be considered as a sufficient condition for rural development.”

While policy will prove important in the development of rural economies, commentators are considering the more immediate affect of the rise of agro-industry.

Many remain divided on whether it will lead to unemployment.

Cambodia Small and Medium Industry Association Secretary General Outh Renne said that labourers left unemployed by mechanisation in rice fields will find jobs in food-processing plants.

“What we have to worry about is how we can completely use the sector’s potential,” he said.

He added that agricultural development should be conducted by local firms, in order to maximise domestic gain.

But Cambodia Economic Association director Chan Sophal said there is currently little industry in rural areas to employ redundant farmers.

“Labourers may find work in new areas in agriculture, such as areas that used to be forest, or they may go to Thailand to work,” he said.

Regardless of the challenges, UNCDF believes strengthening local decision-making is key.

Crosta said: “It is much easier to evaluate decision making if it takes place closer to where outcome is observed.”

The government is fine tuning a 10-year plan laying out policy on these concepts, he added.

ADDITIONAL REPORTING BY MAY KUNMAKARA