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The loan will also support research and development for new products
PHNOM PENH--The Asian Development Bank (ADB) has approved a $70 million loan to improve the capacity of agribusinesses in key agricultural products such as cassava, cashews, mangoes, vegetables and native chickens in six provinces.
According to an ADB press release on Nov. 27, the "Agricultural Value Chain Competitiveness and Safety Enhancement" project will help about 230 agricultural cooperatives and 50 agribusinesses in the provinces of Kampong Cham, Kampong Thom, Oddar Meanchey, Preah Vihear, Siem Reap, and Tboung Khmum.
The project will facilitate access to credit for agriculture and agribusinesses, which only attract about 10 percent of the total formal financing, and implement financial schemes including credit lines and credit guarantees, ADB said.
“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,” said Takeshi Ueda, the ADB principal natural resources and agriculture economist.
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, he said.
The project will support initiatives to strengthen food safety and quality across the value chains for cassava, cashews, mangoes, vegetables and native chickens, and help agricultural cooperatives adopt good agricultural practices and upgrade food-safety testing laboratories to gain international accreditation, the ADB press release said.
The project will also support 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.
Moreover, 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 the Agence Française de Développement (French development agency) and a $3 million grant from the Japan Fund for Poverty Reduction, ADB said.
In addition, the project will help improve 110 kilometers of rural roads and help connect farms to markets in the project areas, ADB added.
With 76 percent of Cambodia’s population living in rural areas, agriculture accounted for 20.7 percent of the gross domestic product (GDP) and 31.2 percent of total employment in 2019, the ADB said. The industry grew an average of 1.7 percent annually from 2010 to 2019, but processed agro-based goods now account for just 4.0 percent of the GDP due to a lack of diverse, value-added products.