Market Trends of Cambodia Agricultural Machinery Industry
Decline in Agriculture Labor Drives the Demand for Tractors
The shortage of agricultural labor is one of the prime driving factors for the demand for combined harvesters in Cambodia. Urbanization and Industrialisation have caused the movement of rural agriculture employees to urban areas causing inadequate labor availability, especially during key agriculture operations such as sowing and harvesting. According to the World Bank, the number of people employed in the agriculture sector was 40% in 2019 which has decreased by 37% in 2022. Thus, a significant reduction in the number of employees in the agriculture sector is giving way to a rise in wage rates, thereby allowing the farmers to adopt farm mechanization. With the availability of advanced technology, coupled with the declining availability of farm labor, the farmers are shifting towards the use of machinery in agriculture, as they aid in saving time, and resources, decrease the costs, and enhance productivity.
Besides, the tractor is one of the basic and necessary farm machinery used by small, marginal, and large landholding farmers. Tractors are used for multiple field operations and make many agriculture operations easy. Due to the significant increase production in of row crops and horticultural crops, there is an increasing usage of tractors. For instance, according to FAOSTAT, cereals production in Cambodia was 11.8 million metric tons in 2020 which increased and reached 12.8 million metric tons in 2022. The growth observed in the sales of tractors is an important indicator of the advent of farm mechanization. Tractors tend to act as a source of power whereby various agricultural machines can just be attached to them. This co-dependency means the purchase of tractors, which has increased over the years.
In 2022, RMA Cambodia company inaugurated a new sales branch in the Steung Sen district of Kampong Thom province to expand the market and improve the quality of service to customers. RMA Cambodia is currently supplying tractors of John Deere brand in Cambodia from 36 hp to 370 hp. The most up-to-date product is the AutoTrac cabin tractor with 55hp to 75hp, which enables hands-free steering of the tractor by using GPS coordinates to control the tractor. The U.S. government has been working with Cambodian farmers and entrepreneurs to improve farming across all climates, increase crop yields, and create new markets.
Rice Combine Harvesters is the Significant Segment by Product Type
Rice is Cambodia’s major crop and is the most important export commodity. Rice is grown on most of the country’s total cultivated land area and also makes up half of Cambodia's agricultural GDP. Still, the per-hectare rice yield in Cambodia is among the lowest in Asia. The mechanization including rice combine harvesters can directly and indirectly bridge the yield gap, by reducing the harvest and post-harvest losses. Besides, the cultivated area, the harvested area, and the production of rice for the last 10 years have been gradually increasing. For instance, according to FAOSTAT, the production of rice was 10.9 million metric tons in 2020 which increased to 11.6 million metric tons in 2022. Therefore, the rising rice crop production drives the demand for combine harvesters in the country.
Additionally, the use of combined harvesters based on a custom hiring basis has also increased in Cambodia. To maximize the use of this machine, some service providers move their harvesters around to other areas where harvesting is required for both rainy and wet season rice. Therefore, with rising market demand and increased usage of rice combine harvesters by farmers in the country, the sale of them is anticipated to show growth further during the forecast period. Although regarded as one of the poorest countries in Asia, Cambodia has experienced a surge in farm mechanization in recent years. The use of combined harvesters in Cambodian rice farming is majorly driven by the increased wage rates and labor shortages in rural Cambodia. Prey Veng, Takoe, Battambang, and Banteay Meanchey are some of the major provinces for Rice harvesters' sales in the country. For instance, according to the General Department of Agriculture, Cambodia currently has 6,796 rice harvesting machines that have been actively working on the preparation of fields, plantations and rice harvests, and machinery for horticulture and aiming to further increase the productivity of the sector by focusing on a shift to mechanization to replace human labor.
