This week, we spoke with Eugene Kraamwinkel, Chairman of EuroCham’s AgriBusiness Committee and CEO of LN Agri Group, about some of the challenges and opportunities facing the agriculture sector in Cambodia. Mr. Kraamwinkel currently operates two farms — a rubber plantation and a cashew plantation — in Kratie. On 28 April, he will deliver a keynote presentation on new tech within the industry at EuroCham’s Cambodian AgriBusiness Perspectives event on 28 April.
EuroCham: How long have you been in Cambodia and how did you get involved with your current enterprise?
Eugene: April 9th this year marked six whole years for me in Cambodia, and I first came to this beautiful country due to an article written on research for my post-graduate degree in agroforestry. My research focused on increasing land productivity, by adopting a silvopastoral system on 2000ha of afforested land which resulted in almost doubling the productivity of land by increasing cattle numbers to 800 head and providing them with additional nutrients in the form of cover crops. The positive spin-offs were not just the production of beef. They reduced fire risk but replacing chemical fertilisers with natural fertilizers allows carbon to bind to the soil, improving its structure.
The quality of the land was improved without affecting the timber and forests. Allowing cattle to graze on natural vegetation and covercrops created sufficient nutrients to sustain the heard and the plantations whilst restoring and regenerating soils and soil capacity.
Duplicating this system in Cambodia came with a different set of challenges which I never faced in South Africa. These challenges came in the form of not marking or branding cattle, strange ways to treat cattle diseases and the inability to keep local community cattle out of the project. Then there was the absence of qualified veterinarians, cattle medicines and proper lick to enhance the quality of nutrients utilised by cattle. The last tricky bit was teaching staff how to identify good breeding stock from the myriad of long-legged cattle with heavy frames and no meat.
We managed to grow the heard in Kampong Speu to more that a 100 head without breaking the bank.
EuroCham: You’ll be talking about new tech and trends in the industry at the upcoming agribusiness perspectives breakfast talk. Could you give us a small preview of what your talk will entail?
Eugene: Sustainability is our biggest problem at the moment, with increased occurrences of deforestation to cultivate agricultural land. This is mainly due to the concept that increased agricultural land will supply enough food for the growing global food demand.
It’s however, not that simple, as the reduction in forests increases land temperature, which in turn increases the drying effect leading to a reduction in rain. By using more unsustainable farming methods, you’re also destroying the quality and structure of the soil. In Cambodia, it’s common to use a “slash and burn” technique where forests are cleared or to remove crop residues. This causes many nutrients to become volatile with the remaining ash being blown away. Very little of these nutrients ends up bound in the soil.
The pressure of agriculture against forests results in less rain, and we need forests for several reasons besides that — they have cooling effects and they’re good for soil quality. Destroying forests actually sets the agriculture sector back and we need to be careful with how we manage this sector. Currently Cambodia can sustain itself with its food supply, and it’s one of the few countries that can say that. In Indonesia, for example, they are trading timber for food. Indonesia protects its forests, but at the end of the day, forests don’t feed people, and this puts a lot of pressure on unsustainable agriculture.
According to the World Bank, 9 billion people will need to be fed by 2050, and a massive 70 percent increase in global agricultural production will be necessary to feed them. If we don’t get more involved in sustainable agriculture and agroforestry systems, we will not be able to provide for all the people on Earth.
Cambodia is ideally suited for some of these systems, because we have a lot of evergreen high forests (the height of the forest canopy causes a cooling effect and moisture buildup, leading to rain) and many farmers are starting to employ better practices, such as keeping high-value timber on their land and planting cashew trees in between the taller trees. Both keep on growing, and at the end of the day, this creates a positive outcome.
There are some good ideas pouring forth from Rajiv Pradhan at Swisscontact, Rick Overmars at SNV Cambodia working closely on sutainability, and Mark Eberle of Smart- Agro, focusing on soil restoration. We need to start looking at a system which benefits farmers employing sustainable practices, restoring soils and increasing productivity responsibly.
EuroCham: How can we maximise opportunity and effectively deal with challenges in the sector?
Eugene: The three main contributors to the Cambodian economy are services, manufacturing, and agriculture. Unlike the other two, agriculture doesn’t require too much input as the natural resources — soil, water, and natural fertilizer — could be employed sustainably regardless of what the world throws at you.
Currently, inflation on food driven by high transport and logistics costs are hampering our ability to export. If we can’t produce a low-cost, high-quality product, it becomes very difficult to export. Cambodia has relatively low food inflation – around 3.8 percent – because it produces so much with limited transport or logistics being involved. Vietnam on the other hand, suffers from high food inflation due to its imports of higher quality food.
Another issue is that as the country develops its labour force, the agriculture sector is facing an increased dilemma of reduced labor. The conditions are tough – working long hours under the sun – and people move on quickly, especially when better conditions can be found at factories. We need to be able to pay our workers enough so that they will stay, but it becomes realy difficult to make the sums balance if you do that.
Naturally, we’ve moved to automating some processes, including using drones to spray chemicals and fertilizers, and using satellite imagery to detect diseases and to count trees. This is more efficient and reduces safety hazards and workloads for workers, increasing productivity and accuracy.
EuroCham: How could we improve the export potential for agriculture produces?
Eugene: We need to promote best practices and get farmers on board in implementing them, and this is something we recently spoke to the ministry about. Traceability and quality of products are two requirements of export markets.
Next, we need small farmers to form cooperatives so they can work together and sell to a central market. Aside from finding better prices for the farmers by tapping into new markets, this cooperative could offer coaching on best practices as well. These topics will be touched on in our upcoming White Book 2023.
Getting away from selling to traders is a big opportunity. The problem with traders is that they pit suppliers against suppliers and buyers against buyers to get the lowest possible price. The worst affected from this process are the farmers and landowners, who do all the hard work but don’t get a fair price for the product. We need a system that can measure the quality and identify the sources of goods, which can lead to access to new markets and higher prices.
We also need to work with farmers to educate them on new methods for farming, sustainability, traceability, regenerative agriculture, and the perks of forming cooperatives, to help them see a new way of doing things.
EuroCham: How have you been able to stay ahead of the curve?
Eugene: Along with adopting some new technology, we keep on changing and adapting with the times, and have the attitude that we want to be leaders in the sector. With our current company, we went through a process of organizational change, to enhance the culture, increase efficiencies, employ new processes and develop an attitude of lifelong learning. This is paying off as we were recently ranked highest for compliance in Kratie Province.
The current project of the company is to change our management system and to become FSC compliant. The company will be the first FSC certified rubber company in Cambodia. If we instill this attitude of “I will not settle for third place, I want to be the best, I want to win,” then we will be able to change agriculture as a whole. The new minister Dith Tina wants to strengthen the sector and to do this we need to find the right legal markets to ensure a contribution to the GDP.
Dealing with bigger companies, they require traceability of goods. It is important that we start building a name for ourselves that when a supplier want to buy from you they will remember the name and the quality. We need to maintain the quality of the crops too to maximise the potential of the industry.
