$70 Million ADB Loan to Strengthen Agricultural Value Chain, Food Safety in Cambodia

News Release | 27 November 2020

MANILA, PHILIPPINES (27 November 2020) — The Asian Development Bank (ADB) has approved a $70 million loan to improve the capacity of agribusinesses in six provinces across Cambodia to process key agricultural products such as cassava, cashews, mangoes, vegetables, and native chickens.

The Agricultural Value Chain Competitiveness and Safety Enhancement Project aims to benefit about 230 agricultural cooperatives and 50 agribusinesses in the provinces of Kampong Cham, Kampong Thom, Oddar Meanchey, Preah Vihear, Siem Reap, and Tboung Khmum.

“Agriculture can contribute to Cambodia’s economic growth and diversification if local small and medium-sized agribusinesses can improve their ability to process high-value agricultural products and market them domestically and overseas,” said ADB Principal Natural Resources and Agriculture Economist Takeshi Ueda. “Private investment in agriculture, along with better access to credit and high-quality raw agricultural products, will help Cambodian agribusinesses unleash their growth potential, create jobs, and improve rural livelihoods.”

With 76% of Cambodia’s population living in rural areas, agriculture accounted for 20.7% of gross domestic product (GDP) and 31.2% of total employment in 2019. The industry grew an average of 1.7% annually from 2010 to 2019. Processed agro-based goods now account for just 4.0% of GDP, due to a lack of diverse, value-added products. The coronavirus disease (COVID-19) pandemic has disrupted agricultural supply chains and reduced incomes and market opportunities for farmers and agribusinesses.

The project will facilitate access to credit for agriculture and agribusinesses, which attract only about 10% of total formal financing. The project will implement mutually reinforcing financial schemes, including credit lines and credit guarantees.

The project will support initiatives to strengthen food safety and quality across the value chains for cassava, cashews, mangoes, vegetables, and native chickens. It will help agricultural cooperatives adopt good agricultural practices and upgrade food-safety testing laboratories to gain international accreditation. The project will also support the research and development of crop seed varieties and poultry breeds by helping agricultural cooperatives access high-yield, drought-resilient, disease-resistant crop seeds and other planting materials. In addition, the project will help improve 110 kilometers of rural roads and help connect farms to markets in the project areas. 

The project will pilot a green financing mechanism, supported by a $5 million loan from the Association of Southeast Asian Nations (ASEAN) Infrastructure Fund. ADB will also manage a $25 million loan from Agence Française de Développement and a $3 million grant from the Japan Fund for Poverty Reduction.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.