Agricultural Project in Cambodia

Why Agriculture?

Why Cambodia?

Legalities and Economics of an agri project in

Cambodia.

Why Agriculture?

Recent Deelopments in the !orld hae led to

lesser emphasis on !hat is perhaps the most
important resource re"uired # $ood

%his has lead to immense scarcity of food and

!ater &een in the most deeloped countries
of the !orld.

%his is the right time to inest in agriculture as

demand of food is high and so are the prices'
ensuring higher profit and self'sustainance.

Why Cambodia?

Chiefly an agricultural country !ith abundance

of natural resources &!ater and optimal
temperature.

(hortage of capital among the goernment

and people

%his has lead to use of primitie methods of

agriculture and less usage of aailable
technology

Despite these shortcomings cambodia is one

of the !orlds highest e)porter of rice &and is all
set to become one of the biggest e)porter of
cassaa as !ell.

Why Cambodia? *contd+

(trategic lin, from the !est to the east # if

deeloped &cambodia can act as a high!ay
bet!een countries li,e
China&-apan&.ietnam&%hailand and the
countries of the !est li,e /(A and european
countries

People are ery friendly &innoatie and hard

!or,ing # only the capital is missing

0mmense potential due to its long coastline #

many centres can be deeloped for trade

Legalities

Cambodia &li,e its south'east asian

counterparts has no la! to ensure full
o!nership of land by a foreign national.

1o!eer & there is an option of forming a

company !ith atleast 234 cambodian holding
and then o!ning of land by the company.

Another option is the goernment lease !hich

if applied has a fi)ed rent of /(D 35 per
hectare per year. Een Priate lease is an
option.

Economics of doing agri projects in
Cambodia

%here are 6 methods of doing agri projects7

8ethod 9ne
Priate lease of 355 hectares of land for :5
years at a rent of ma)imum 355 /(D per
hectare per year
8ethod %!o
9!nership of :5 hectares of land by
formation of a company

$or all the costs mentioned henceforth & they

are the !orst case scenarios !herein the yield
ta,en is minimum and the /(D buying rate is
0;R <5 and selling rate is 0;R 2<

Economics *contd+

8ethod 9ne7
355 hectares = 6>? acres of land
3:5 acres cassaa
355 acres sugarcane
3? acres pig farm and cultiation for pig
fodder and a house

Economics*contd+

E)penses for method one for @ear 3 *costs in

/(D+7
Rent7 /(D 355 A 355 hectares per year
= /(D 35&555 per year
Cost of planting (ugarcane7 /(D 3555 B ha
= /(D >3&?55 for 355 1a
Cost of planting Cassaa7 /(D <55Bha
=/(D :6&255 for 3:5 1a
Cost of pigs 7 /(D 655 per pig
=/(D 35&555 for 25 pigs

Economics *contd+
(etting up a residence Bstoreyard
/(D 65&555
$ood and $odder for pigs7 /(D 35&555 per
year
8iscellaneous e)penses7 /(D 2555

%otal Cost of set up for @ear one including

labour&trael&land leelling&seeds&fertiliCers
etc 7
/(D 3&>2&655
0;R *3 /(D= <5 0;R+ 7 DD Lacs

Economics*contd+
E)pected sale in method one for @ear one7
@ield of sugarcane per hectare 7 Ag ?5
tonnes !orst case
$9E price of sugarcane7 F>5 per tonne
(ale price of sugarcane in 3 hectare7 F6D55
(ale Price of sugarcane in 3 acre7 F33<<
%otal (ale price= F33<< A 355 = F3&3<&<55


Economics*contd+
E)pected sale in method one for @ear one7
@ield of cassaa per hectare 7 Ag :5 tonnes
!orst case
$9E price of cassaa7 FDG per tonne
(ale Price of cassaa in 3 hectare7 F6<?5
(ale Price of cassaa in 3 acre7 F3336.2
%otal (ale price= F3336.2 A 3:5 = F3&>>&<62


Economics Contd
%otal (ale Price in @ear one !ithout Piggery7
/(D 6&<5&<62 = 0;R 3&>2&G2&555
%otal Profit Earned = 0;R <:&>5&255

Piggery

We thin, it !ill ta,e 3D months to start selling

pigs &and by that time&the 25 procured pigs
!ould hae gro!n to around 255 *!orst case+

We then can sell around 625 pigs eery <

months.

Each lie pig about 355 ,g = F655*!orst case+

%otal income in 3D
th
8onth7 F655 A 625 =
F25&555 = 0;R 6D&55&555

Economics of @ear 6

As !e sell pigs&!e enter into the 6

nd
@ear
!herein no big inestment is re"uired as land
is leelled and sugarcane does not re"uire
further seeding .%he only cost is the rent7
Cost of rent = F35&555
8iscellaneous e)penses *transport&seeding
cassaa&fodder for pigs&buying ne! ones if
necessary+ = F 65&555

%otal e)pense= F:5&555 for year 6 = 0;R 3D

Lacs

Economics of @ear 6

As !e sell pigs&!e enter into the 6

nd
@ear
!herein no big inestment is re"uired as land
is leelled and sugarcane does not re"uire
further seeding .%he only cost is the rent7
Cost of rent = F35&555
8iscellaneous e)penses *transport&seeding
cassaa&fodder for pigs&buying ne! ones if
necessary+ = F 65&555

%otal e)pense= F:5&555 for year 6 = 0;R 3D

Lacs

Economics of year 6

(ale in year 6
Assuming same output as in year one &!e
get %otal (ale price of cassaa H sugarcane =
0;R 3&>2&G2&555
Piggery 7 %!ice selling 625 pigs7 0;R
2<&55&555
%otal (ale7 6&53&G2&555 *%!o Crore 3 lac G2
thousand+
Profit Earned7 3&D:&G2&555*9ne Crore D: lac
G2 thousand+

8ethod 6' 9!ning :5 hectares of
land

Cambodia is going through a sea change in

terms of increase in foreign tourists and
foreign inestment.

%ourism has risen by 624 in last > years and

,orean and chinese companies continue to
build large scale projects there

%his means in about 2 more years&the land

and property prices are going to increase
manifold&ensuring that any inestment made
no! on a fi)ed asset such as land is going to
yield great margins.

8ethod 6' 9!ning :5 hectares of
land

Cambodia is going through a sea change in

terms of increase in foreign tourists and
foreign inestment.

%ourism has risen by 624 in last > years and

,orean and chinese companies continue to
build large scale projects there

%his means in about 2 more years&the land

and property prices are going to increase
manifold&ensuring that any inestment made
no! on a fi)ed asset such as land is going to
yield great margins.

9ur proposal

9!ning :5 hectares of land & !hich is ery

near to an ongoing large scale dam and
irrigation project.

%he price is e)pected to be in the range of

:555 /(D B hectare.

(o cost of :5 hectares of land is about 7 :5 A

:555 /(D = /(D G5&555 *0;R 2> lac+

9ut of the :5 hectares 7 3? hectares shall be

dedicated to cassaa&36 ha to sugarcane and
3 ha for pig farming.

Economics
Fixed Assets investment :

Land7 /(D G5&555 *0;R 2> Lacs+

1ouse&storage @ard and (table for pig7 /(D

62&555 *0;R 32 Lacs+
Operational expenses

Cost of Plantation of sugarcane7 /(D 3:&555

*/(D 3555 per ha+

Cost of Plantation of cassaa7 /(D 35&655

*/(D <55 per ha+

Economics

Euying of 25 pigs = /(D ?255

9erall cost to!ards labor&doctor&feeding etc =

/(D :<&555

%rael and other miscellaneous e)penses7

/(D 32&555

%otal cost for setting up the pig farm=/(D

>:&255*shed included aboe +
%otal 9perational e)penses = 0;R <3 Lacs
%otal $i)ed asset e)penses = 0;R <G Lacs

%otal 8argins

%otal sale of products = 0;R >:.2 Lacs

;o margin in the form of moneyBli"uidity

gained this year

Eut %he price of land&!hich is strategically !ell

important and highly prone to deelopment
due to irrigation project is bound to rise in the
first year&so a gain in the fi)ed asset
inestment is certain.

Economics
@ear 3 Economics

%otal (ale price of sugarcane =

/(D >5 A ?5 tonsBha A 36 ha = /(D ::&<55
*0;R 3D Lacs+

%otal (ale price of cassaa =

/(D DG A :5 tonsBha A 3? ha = /(D >2&:G5
*0;R 62.2 Lacs+

Piggery is not considered in year one as

before

Economics

Year 2 expenses

;o rent this time& only pig fodder for remaining

< months*3D months e)penses for pig !ritten
earlier+ # 36&555 /(D

8isc E)penses H seeding for cassaa /(D

D555

%otal E)penses for @ear 6 = 62&555 /(D *0;R

32 Lacs+

Economics
Year 2 Sale:

(ale of sugarcane 7 same as year 3 7 /(D

::&<55 *0;R 3D Lacs+

(ale of cassaa7 /(D >2&>55 *0;R 62.2 Lacs+

(ale of pigs 7 /(D G5&555 *0;R 25.> Lacs+

%otal (ale = 0;R G:.G Lacs

%otal 8argin @ear 6 !ith 32 lacs e)penses =

0;R ?D.G Lacs

Piggery

%here is a reason !hy !e hae specifically

chosen pig farming

%he main reason is that it is the most

consumed meat in the globe # statistics say
around >54 of the meat eating !orld
consumes por,

(econdly&it is consumed almost in any house

hold in cambodia # but they import many of
the pigs' so in this !ay&!e !ill hae a better
local mar,et reach

Lastly&it ta,es just D months for a pig to

become D5 Ig&!hich means &selling them is
easier

(ummary

As said there are many reasons as to !hy

inest in agriculture and specifically cambodia.

%here are 6 attractie options 7 Leasing either

priate or goernment land & or o!ning :5
hectares of land

Leasing seems to gie the better returns in

terms of li"uidity and cash.

Eut 9!ning land means lesser ris, factor and

less dependency on purely agricultural yields
and higher gain in terms of fi)ed asset
inestment.

%han,s

%han,s for going through these slides

patiently.

We !elcome any suggestions regarding the

land share of crops or introduction of a ne!
cash crop or improing the "uality of
inestment in general

%han,s once againJJJ