Cambodia Agricultural Machinery Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023 - 2028)

The Cambodia agricultural machinery market is projected to register a CAGR of 4.1% during the forecast period.

Key Highlights

• The Ministry of Agriculture, Forestry and Fisheries (MAFF) has been working with the private sector and development partners to integrate the use of agricultural machinery into middle-class farming communities to respond to the current and future decline in the agricultural workforce. The government aims to make Cambodia a high middle-income country by 2030 and a high-income country by 2050. At the same time, it has an ambition to modernise Cambodia’s agricultural sector to be more competitive, environmentally resilient, and sustainable in order to increase the income of farmers’ families, expand prosperity and improve the wellbeing of the Cambodian people.
• The policies of the Ministry of Agriculture is promoting the use of machinery in large- and small-scale farms in order to increase the productivity of the crop. This step was taken to address a growing labor shortage within the region and increasing costs of manual labor which are impacting the growth of agricultural machinery in the region. Farm mechanization helps to produce higher quality agricultural harvests and even boosts the production of the market in the coming years.
• Over the medium term, the agricultural machinery market in Cambodia is expected to witness steady growth. The key factors include the increasing focus of farmers on sustainable agricultural mechanization, rising public-private partnerships in Cambodia, and improvement in financial access to services, which are driving the market growth during the forecast period.

Cambodia Agricultural Machinery Market Trends

Decline in Agriculture Labor Drives the market

The shortage of agricultural labor is one of the prime driving factors of the agriculture machinery market 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 International Labour Organization, the number of people employed in the agriculture sector is 31.5% in 2020 which has slightly increased compared to the previous year due to a lack of skilled persons for operating the agri farm operations machinery therefore, the government and private organizations are supporting the farmer by organizing the village programs and awareness camps in the rural areas. However, the growth tends to be minimal.

The agriculture ministry is pushing to modernize the agricultural sector with a focus on managing and preventing potential labor-related issues as the share of the labor force employed in agriculture dips to 35 percent and is expected to decline further down which will boost the market to growth in coming years. The workforce in agriculture will not be as large, but the workforce that remains will become more skilled at doing things like controlling drones and using other modern technology to perform the labor-intensive tasks involved with agriculture. The modern agricultural sector will be growing day by day, and its technology and methods will replace much of the labour force. This will anticipated to grow the market during the forecast period.

Thus, a significant reduction in the number of employees in the agriculture sector is giving way to 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 machineries in agriculture, as they aid in saving time, resources, decrease the costs, and enhance the productivity.

Tractors Dominate the Market

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 made many agriculture operations easy. Due to the significant increase in row crops and horticultural crops, there is an increasing usage of tractors. 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 makes the purchase of tractors, which is increasing over the years.

In 2022, RMA Cambodia has 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.

According to General Department of Agriculture, Cambodia currently has 32,094 tractors and 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 mechanisation to replace human labour.

Therefore, the tractors segment is the most dominant segment among all the agricultural machinery in Cambodia. A continuous rise in the number of tractor units sold has been observed in Cambodia.

Cambodia Agricultural Machinery Industry Overview

The cambodia agricultural machinery market is a consolidated market owing to the presence of few prominent players, accounting for more than half of the market. The key players in the market include Deere and Company, Escorts Limited, Kubota Corporation, Mahindra and Mahindra Ltd, and Yanmar Holdings Co., Ltd. The main strategy adopted by the key players has been to invest in R&D to encourage innovation and maintain a strong market base. The advent of advanced technologies like Artificial Intelligence, Robotics, Google Earth, and growing number of government initiatives have driven the demand for agricultural machinery to rise.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
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