Improving Rice Production and Commercialization in Cambodia: Findings from a Farm Investment Climate Assessment

Cambodia has a potential advantage in agricultural production due to significant amounts of fertile land and high levels of agricultural employment, but rice production and commercialization remain well below this potential. This study uses a farm investment climate assessment to provide evidence on key areas where government investments and policy reforms can lead to higher levels of rice production and commercialization in small farms. Improving output markets through domestic milling and increasing the area irrigated are found to be related to increased production efficiency, commercialization, rice sold, and value of sales. In contrast, access to finance, agricultural skill development, improvements in the legal environment, and increased physical infrastructure have no observable relationship with production and commercialization. Nevertheless, these aspects do have importance in potentially improving allocative efficiency in land where land holdings shift from less skilled and less productive farms into the hands of more productive ones. Since increased farm size is one of the most important factors for raising the levels of farm production and commercialization, investment climate factors that induce reallocation of land may potentially have greater value over the long term than those that only affect short-term production.