The world has witnessed a growing global demand for starch. Used in a wide range of products including biofuel, food and industrial goods, new space has emerged for Cambodia to be a significant global starch producer. Over the past two decades, the country has produced between 10-14 million metric tons of cassava roots and has exported almost all of these to the rest of the world. In comparison to other cassava growing countries, Cambodia is ranked as the fourth largest producer in Asia and tenth largest in the world. The challenge now is to move up the value chain and switch from exporting raw cassava chips to producing processed starch.
Encouraging investment in the cassava sector through the introduction of the national policy is an important, and timely, move. A UNDP study in November 2019 found that total returns on public investment in cassava outstrip the initial investment costs by a factor of around 3 to 1. In nominal terms, the national economy can see a boost of over USD 940 million after a period of ten years. Compared to other sectors, returns on cassava outpace investments in livestock and food, and in the tourism sector. Notably, cassava delivers a similar result compared to investment in rice production. It also delivers a relatively favorable boost to government income, with tax revenues estimated to rise by USD 130 million over a ten-year period. This is similar to the rice, livestock, and food sectors, with only tourism outperforming cassava on tax receipts. Most importantly, investments in cassava do best in boosting employment and keeping people out of poverty through providing jobs that don’t require high skills – something that is essential now as Cambodia moves to recover from the pandemic’s economic shock.
Cassava planting areas have expanded rapidly across the Kingdom, turning cassava agriculture into a major livelihood of many smallholder farmers. The crop can survive in extreme conditions where other plants find it difficult to grow, provide high yields under sustainable agronomic practices, and require low production costs while maintaining high demand driven by the global market. That is an important advantage as Cambodia faces rising temperatures and erratic rainfall in the face of the climate crisis.
The Kingdom’s cassava sector now has an opportunity to move up the value chain and switch from exporting raw cassava chips to exporting starch, ethanol and finished products. In line with the Cambodia Industrial Development Policy 2015-2025, cassava is envisioned to be a strategic crop for the country, which can be transformed into multiple products. These can substitute for currently imported products in Cambodia’s domestic market and be exported to countries with trending demands for cassava-derived products. Cambodian cassava is of particularly high quality and suitable for edible starch, the more valuable starch product.
Global demand for starch has never been stronger. The growing global middle class is fueling the demand as starch is an important component in many processed foods that are increasingly more affordable. The pandemic may have set back this transformation, but the underlying growth of the middle-class consumer is unstoppable. Nowhere is the middle class growing faster than here in Asia. The Brookings Institute estimates that today’s Asian middle class of 2 billion will be 3.5 billion by 2030. Investing now in the products they will demand is the right industrial development policy choice.
The National Cassava Policy embodies this vision. It prioritizes research and development to encourage investment in sustainable production and the development of niche products, including organics. These enabling factors will help to stimulate local production, supporting farmers across the country to increase their productivity and product quality.
Nick Beresford, Resident Representative, UNDP Cambodia
Reathmana Leang, National Management Specialist, UNDP Cambodia