In theory, economic land concessions are meant to increase agricultural productivity and spark economic growth, however this scheme has not proven to be effective in either respect. A large portion of the land that was granted remains either unused or underutilized. And, as the UN’s OHCHR wrote in 2007, “instead of promoting rural development and poverty reduction, economic land concessions have compromised the rights and livelihoods of rural communities in Cambodia.”
The primary concern for many communities when it comes to economic land concessions is encroachment on local agricultural and grazing land, which leads to loss of livelihoods. This issue is prevalent in almost all active concessions. Moreover, ELCs have also played a significant role in deforestation and loss of access to forest and non-timber forest products for rural communities, concerning displacement in which local people have been disadvantaged of the right to own land through the grant of economic land concessions.
An academic paper published in 2021 found that ELCs across the country can be directly linked to up to 40% of the country’s deforestation since 1998.
These ELCs, which require large-scale acquisition of land, frequently lack transparency and fail to involve adequate consultation processes. This type of investment is often marked by unequal access to information and a failure to effectively implement the legal framework that is in place, despite the fact that the domestic legal system is well-developed on paper. This has resulted in widespread conflicts over land ownership and use, and leads to the marginalization of communities that are affected by these investments.
And the economic benefit of these schemes has not been shown to offset the harms created. Even the former agriculture minister reported in 2022 that the ELC’s revenues were only $2M. The question for the whole scheme is what will happen to this land now that it is well-understood that ELCs have not accomplished their state objectives. The government should repurpose the land through a reformed land concession scheme that prioritizes more productive small-holder land tenure.
Limit granted land concession size
Alternative options should be considered for ELCs which have not succeeded in demonstrating agricultural productivity and economic growth. To ensure equitable and sustainable use of land, a comprehensive land reform agenda should address and establish clear criteria for identifying, resizing and redistributing the land, including a process for periodically assessing land productivity, and incentivizing the cultivation of neglected areas.
The original scheme of granting such large swathes of land should be rethought. A reformed concession scheme would do well to grant smaller plots so that the smaller households can acquire and manage them. Unlike the 10,000 hectare limit set by Articles 59 & 61 of the Land Law, a reformed scheme should limit land granted to between a range of 10-20 hectares. First, a smaller-sized plot can benefit smallholder farmers or family-sized businesses who could use the land to expand their agricultural productivity. Smaller plot sizes also allows for diversified cropping and livestock farming, increasing income and livelihoods for smallholders.
Additionally, research has found that this size facilitates more efficient farming practices, allowing economies of scale. Moreover, it is an optimal size for negotiating with buyers and investors, enabling farmers to secure better prices and terms. Furthermore, a smaller-to-mid-scale farm enables farmers to focus on quality control and direct-to-market sales, potentially increasing profit margins.
Tradable concession contract
In the process of reforming and repurposing the land that had been designated as ELCs, it makes sense to take a tradable concession approach that allows the land to be tradable based on the contract scheme.
The scheme is different from having private land ownership. It’s about buying and selling the rights under these concession contracts. A tradable concession system would mean that if concessionaires cannot meet standards for productive land use according to their proposals, they can trade the concession rights to the new concessionaires. They are incentivized to either use the land efficiently or trade it to someone who will.
Moreover, taxation policy should play a crucial role here to ensure transparency and efficiency for ELCs. Taxes on underutilized or unused Economic Land Concessions should also be reassessed. A flat taxation on this land is an ideal option that would minimize the amount of land that remains unproductive due to speculation. A flat tax also simplifies the system by removing the need to define or evaluate what counts as “used” or “unused.” This saves time, reduces administrative costs, and prevents loopholes that can be exploited. It also ensures fairness that everyone contributes equally, and the revenue from these flat taxes can be reinvested into the community for things like infrastructure or irrigation systems.
By aligning taxation policies with the goals of efficiency and transparency, ELCs should better fulfill their intended purpose of national food security and economic growth.
Lesson from China’s land reform programs
In terms of a reformed ELC scheme, Cambodia can learn from the land reform in China initiated by Deng Xiaoping’s 1978 agricultural reform program which has a significant change in China’s agricultural strategy, particularly in the lower income segments of the smallholder farmers.
The “household responsibility system,” also known as the “contract responsibility system” shifted from a collective land-based approach to a more decentralized approach allowing smallholder farmers to rent the land from the government and manage their agricultural outputs. Overall agricultural efficiency increased as a result of the system’s adoption by about 94.2% of rural households. This reform became a key component of China’s larger economic transition. Cambodia can learn from this contract responsibility system to adopt a tradable concession contract scheme.
Another case from China is the market-oriented industrial land policy reform which improved land use efficiency. For the Chinese government, optimizing and enhancing industrial land use efficiency became crucial due to the country’s enormous population, and rising urbanization and industrialization. The government has implemented land policy reforms targeted at market-oriented reform of industrial land to solve this issue and guarantee the effective distribution of industrial land.
Before 2007, agreements that allowed local governments to control the price were used to distribute China’s industrial land. They offered low prices to the investment which resulted in inefficient utilization. Then, the government decided to mandate the law that the land should be sold through listing, auction, and bidding. This marked the transition to market-oriented policies in which land use efficiency grew and was greatly enhanced by these reforms.
Approach from a human rights perspective
ELC reform should also be targeted specifically to help those who have been most affected by the existing ELC model. For instance, reform should focus on assisting indigenous communities with securing their land tenure to avoid the conflict over the granting of land.
The persistent issue of land grabbing also demands urgent attention. This involves the coercive acquisition of land, often displacing vulnerable communities. From 2000 to 2013, approximately 777,000 Cambodians were affected by land conflicts and evictions, according to local human rights organization ADHOC.
It is important that any reformed version of the ELC system does not encroach on indigenous land. The proposed scheme to replace the current model of large-scale concessions with a limit on the land concession size can reduce the massive land grabs that disproportionately harm Indigenous communities.
Indigenous people in Cambodia are considered to be a particularly vulnerable group when it comes to land disputes. Strengthening their right to land ownership should be implemented and should be on the agenda for a multi-disciplinary approach to land reform. Indigenous groups must receive assistance and recognition in terms of identifying the boundaries of their customary lands so that they can be registered. In the meantime, as land is in the process of being registered this land should be recognized informally until official collective titles can be established.
Furthermore, to complement the rights of those affected by the ELCs, publicly available information-sharing should be prioritized. This means the location, size, use, and status of concessions, as well as adherence to the SubDecree on Economic Land Concessions’ standards, should all be information that the public can access. The public should also have access to data and details on concessionaires, such as directors, shareholders, and beneficiaries.
The bottom line
Cambodia’s land concession policy requires urgent reform to meet its intended goals of agricultural growth, socio-economic development, and rural livelihood protection. The current ELC model has disproportionately benefited a few while causing harm to many.
To address this imbalance, reforms should focus on reducing concession sizes, encouraging a tradable concession contract approach to land rights transfer, and prioritizing the rights of vulnerable communities. A balanced and transparent system would not only improve land use but also foster equitable development across Cambodia’s rural landscape.
Note: So Lyhong is a young research fellow at Future Forum, an independent think tank in Cambodia.