Co-written by Seungheon Han (G9), Wanyu Shu (Amy) (G8)
Proofread by Asian Development Bank’s Cambodia Resident Mission Team
Cambodia, located in the heart of South East Asia, is well on its way to move beyond its status as a least developed country (LDC) by 2029 (“Consultation Workshop: “Cambodia’s LDC Graduation: Policy Mapping and Sectoral Impact Assessment”). However, progress comes with many challenges. As the country strives to modernize farming and rural areas—boosting exports, increasing efficiency, and reducing poverty—local communities face shifting weather patterns, soil degradation, unstable water resources, and unforeseen issues, all of which threaten their livelihoods. Following the “ADB in Cambodia: Climate Change and Beyond” podcast interview with Country Director Ms. Jyotsana Varma, which outlined these challenges and potential solutions, members of the Grapevine Team were invited by the ADB (Asian Development Bank) Cambodia Resident Mission Team to join its officials on a trip to Kampong Thom. This was an opportunity we could not miss, as we would see for ourselves how the challenges of modernization are being addressed, in one of the nation’s key agricultural provinces.
In Kampong Thom, organizations like the ADB and the Farmers Livelihood Improvement Association (FLIA) are working to help farmers adapt to the impact of climate change. Through projects like the Cambodia Tonle Sap Poverty Reduction and Smallholder Development Project (TSSD), they have introduced sustainable solutions to ensure long-term financial growth. The following article will outline key information we recorded from our visit, specifically on the topics of FLIA’s revolving funds, and the support provided to poor people (those that hold the ID-poor cards issued by IDPoor program (Identification of Poor Households Program).
Context:
Before getting into specific topics, it is important to know the broader context of agriculture in Cambodia and the challenges farmers face in the first place. With farmers making up 70% of the country’s workforce, agriculture plays one of the most important roles in Cambodia’s economy. When a large percentage of a country’s workers are part of one community, many challenges arise. First of all, financial difficulties are prominent, with a limited access to loans, and the high cost of farming, especially with the cost of seeds and fertilizers and the water-intensive nature of the business/endeavour/work. ADB has supported farmers in rural areas, including the province that we traveled to, Kampong Thom. Rice, as the main crop grown in Cambodian agriculture, has faced many challenges. For example, frequent recurrences of droughts and floods, as a result of weather variabilities , impact harvests which are the main sources of farmers’ income. ADB’s commitment is displayed in their rural development and poverty reduction programs, the most prominent achievement being the establishment of Farmer Livelihood Improvement Association (FLIA), which can look after farming communities after the project ends.
Cambodia’s goal of reaching 1 million tons of milled rice exports by 2015 was indeed ambitious and ultimately not achieved by the target year. In response to this setback, ADB and NCDDS found a more sustainable approach in development that could boost sustainable production as well as address malnutrition and poverty reduction. This led to the creation of FLIA as a full farmers led organization to optimize farming, and create pathways to the poor farmers to escape poverty. FLIA aims to support farmers in rural and underdeveloped areas in Cambodia. According to Senior Project Officer at ADB Cambodia Resident Mission and the Team Leader Mr. Hem Chanthou , “FLIA has recruited 53 community development professionals to solve farmers’s problems and he took additional efforts in helping these processional to be effective in their works.” He emphasizes that the focus is on, “production, market development, building businesses, and eventually [moving onto] exports.” FLIA aims to help Cambodian farmers increase their income as well as increase the sustainability of their practices, and has launched key initiatives to support this objective. FLIA branches out, including smaller groups, for example, the Livelihood Improvement Groups (LIGs), which consists of farmers who receive loans to incorporate into their work, improving their sense of business.
In recent years, Cambodia has made significant strides. According to Mr. Chanthou, as of March 2025, Cambodia exported over 1.5 million tonnes of milled rice and wet paddy within the first two months of the year (“Rice Exports Hit 1.5M”). FLIA’s initiatives, such as the establishment of Livelihood Improvement Groups (LIGs), have played a key role in this.
Revolving Funds:
One of the key financial tools supporting Cambodia’s farmers is the group Revolving Fund system, a microfinance strategy that ensures sustainable financial support for farming communities, especially in rural areas.
Revolving funds work as a system in which a set amount of money is continuously cycled through borrowers. In FLIA’s context, farmers receive small loans for crucial agricultural needs such as seeds, fertilizers, and equipment. Once they generate income and profits from their harvest or other business activities, they can repay the loans, allowing the funds to then be reloaned to the same or new group members. This cycle, in essence, repeats continuously, ensuring that there is continuous financial availability without the need for external funding, and that the users have a sustainable way of gaining access to additional money in times of struggle.
This system is especially relevant to those in rural farming communities, as farming at a large scale requires much investment, and hence usually requires the borrowing of money. However, large banks tend to be unwilling to give loans to farmers in rural areas due to transaction costs and the high risk involved, pushing farmers to seek high-interest loans from private money lenders. With revolving funds being more accessible and sustainable, reliance on these potentially-dangerous loans can be significantly reduced.
Based on our findings in Kampong Thom, farmers in LIGs (Livelihood Improvement Groups) initially receive low-interest loans of around USD $240 each, per cycle, which could be used for buying crops, fertilizers, and equipment. However, FLIA board director Mrs. Morn Leakhena stated this value has been increased to USD $440 due to the increased capital in each group as a result from retention of the earning from interest. These larger loans have offset the inflation.
“Before, with 240 dollars, you could buy a motorcycle, but now, you can’t,” His Excellency Ny Kimsan, the Deputy Head of NCDDS (The National Committee for Sub-National Democratic Development), stresses.
FLIA’s Process In Detail:
Apart from revolving funds on an individual level, LIGs (Livelihood Improvement Groups) are also provided with additional community-level loans that can be used collectively. For better management of both group and individual funds, FLIA offers training on how to develop business plans and make profitable financial decisions. LIG funds are typically overseen by a three committee: group chief, vice chief and a casher. These leaders must check the business plans of the borrowers before approving the loans. After this, the Chief is permitted to receive the funds from the bank and distribute to the members. To lower risks of misuse of funds, FLIA conducts regular audits in LIGs. Weaker groups are reviewed once per month, while stronger-performing groups are reviewed once per two months. These audits focus on, according to FLIA director Mrs. Leakhena, “the accuracy of financial records, updating team member data, and tracking the implementation of business plans.”
IDPoor:
To have a successful poverty reduction under the TSSD, spent efforts identifying the communities with many poor households and prioritising certain communities for intervention to optimize the impact. This led to the use of the IDPoor system (Identification of Poor Households) to properly target the beneficiaries.
Climate Resilient Agriculture:
In areas like Kampong Thom, where floodings and unpredictable weather conditions are present, over the past few years, the over-cultivation of rice has led to serious soil degradation. As Mr. Chanthou explains, “rice cultivation requires significant water resources. Excessive land preparation over a year can strip away the topsoil, leading to reduced soil fertility. As a result, the rice fields become increasingly hard and less productive.” Over time, this causes the land to be more difficult to use, as seen by how “before, farmers used cattle to plow the fields, but later switched to handy tractors, and now mostly tractors are being used”. In many locations, soils are harder to plow and only tractors now can do the job. To address land degradation issues, crop rotation (crops other than rice planted in the same fields/area multiple times in the same year) is a solution. By rotating rice with other crops, farmers are able to replenish nutrients in the soil, lower the risk of erosion, and reduce the speed of land degradation
Climate resilient seeds have become a crucial aspect of rice production and FLIA is trying to ensure that their members have access to these kinds of seeds. This is because in areas suffering from significant effects of climate change, such as unpredictable rainfall, adapted and engineered seeds allow farms to maintain a stable production of crops and improve food security.
These efforts ultimately center around one key principle, which, as Mr. Chanthou puts it, is: “Don’t maximize the use of land for short-term benefits; rather, try to optimize for long-term sustainability.” This doesn’t directly mean “producing less”—but rather producing smarter. Instead of overworking the land to push for short-term gains, farmers must focus on nature-friendly practices that protect soil health and ensure reliable harvests in the future. This shift in mindset has not only helped improve crop yields and surplus, but also ensure sustainability. According to Mr. Chanthou, three decades ago, average rice yield in Cambodia was approximately less than two tons per hectare due to poor access to quality seeds and inputs, poor agricultural techniques and poor irrigation systems, but with improved access to quality seeds, agricultural inputs, farming techniques, and improved irrigation systems, the current average rice yield has reached 3.4 tons per hectare (as of 2024). Moreover, based on a farmer from the LIG we visited, crop diversification and additional strategies have allowed for their community “to have healthier food now.”
Rural Infrastructure Development:
While farming techniques suitable for times of climate change are essential, they must be supported by strong infrastructure for effective rural development. In Kampong Thom, which has long been a key transit point between Phnom Penh and Siem Reap, road development has been especially influential. Newly constructed roads and support from ADB have significantly lowered travel time and improved access to markets in the region. “Three decades ago, it took 2 to 3 days of travel from Siem Reap to Phnom Penh. Now, with new roads, it only takes 5-6 hours, and women can spend more time working and less time commuting,” says Mr. Chanthou.
Aside from transportation, the roads have also improved overall public safety. According to His Excellency Ny Kimsan, the roads (that are part of the project) were designed to be flood-proof, allowing them to serve as a safe evacuation route during heavy flooding. “It also helps protect the animals and livestock during flooding time,” he adds.
In recent years, with constructive feedback from FLIA’s support programs, farmers in the area have also strived to build separate housing for their animals, keeping livestock and their waste off the streets, contributing to a cleaner environment.
We found that the water supply in the area we visited was inadequate. With rainfall becoming less predictable, ADB projects improve irrigation schemes and help farmers to manage water more efficiently.
Digital Finance:
A major issue in managing community finances has been the vulnerability and lack of transparency in cash-based systems. According to Mr. Chanthou, when money was withdrawn from the bank on behalf of the LIG, there were instances where the funds went missing or stolen—lowering trust and halting smooth progress. To address this, FLIA plans to transition to digital finance in the near future. According to Mrs. Leakhena, Microsoft Banking can be used to track transactions and increase the confidence of the LIG members.
Cultural/Social Barriers and Finance:
Additionally, ADB members come across challenges with the farmers on cultural and social aspects. For example, a wide majority of farming households in rural areas have traditionally passed down the Buddhist ideology, leading to a strong belief in Karma. In this context, some believe that poverty is caused by wrongdoings in past lives. This can lead to people just accepting their “fate” and to not even try to escape poverty. To address this issue, ADB encourages members of LIGs to shift their thinking from thinking that their life is set for them due to past lives, to working hard now to have a better life in the future. Mr. Chanthou says, “every livelihood option for FLIA members is carefully chosen to ensure it is market-oriented and viable. This approach boosts farmers’ confidence in their ability to overcome poverty.” So far, the team has found this method to be quite effective, with one farmer (member of the LIG we visited) saying that she “used to believe, one-hundred-percent,” that Karma was set unchangeable, but now after input from FLIA and ADB, “only fifty-percent [of her] still believes it”. She says that now, she has a stronger belief that although Karma does exist, if she works hard, she will get “distracted [from] the thought of it and it might go away”.
TSSD has developed training programs for farmers on financial literacy, and although more focused on training commune leaders, everyone has the opportunity to learn and improve their financial literacy, allowing them to maintain steady income and develop successful business plans.
Another major challenge faced by many households is the inability to pay back individual household loans from the revolving fund. This often places immense pressure on families, especially in cases when the main breadwinner passes away, or becomes unable to work. Without repayment of debt, the group would be given less money to work with in the future cycles, creating a long-term financial issue for everyone in the household. Moreover, according to His Excellency Ny Kimsan, in many cases, “people worry that if debts are unpaid, the deceased would get bad Karma in their next life.” To address these concerns, FLIA has formed the LIGPF, short for “LIG Protection Fund,” which allows for each household to contribute $5 per year to the fund will be eligible for up to 2,000,000 riel (approximately $500) in support in times of unforeseen tragedies.
Moreover, gender equality has long been an issue in employment, especially due to the more traditional beliefs of many individuals in rural areas. Women in areas such as Kampong Thom face a struggle to find employment and to access funds. To combat this, ADB and FLIA have launched gender focused initiatives to support the female farmers in the community. By making a requirement in groups and communes that gender equality in the workplace must be balanced, 59% of the LIGs (Livelihood Improvement Groups) members are women.
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ADB and its partners have left a significant impact on the economy of rural Cambodia, and are on track to continue to do so. Through FLIA and revolving funds, sustainable development can be made in agriculture, economy, but most importantly, in the livelihood of farmers. These initiatives promote equal opportunity to all members of the communes, while ensuring their safety by carefully managing their financial systems.
But as Cambodia faces intensifying climate challenges, development itself must evolve.
As Soleil, Associate Communications Officer on ADB’s Cambodia Resident Mission, puts it, “We need to change the way we do development,” by ensuring that long-term climate risks are considered in “every single development decision and are the basis of identifying investment opportunities across sectors and themes.”
Only then can we steer development in a truly resilient direction—one that builds opportunities without locking in future risks.
Note From the Grapevine Team:
We are incredibly grateful for the opportunity we were given to visit the ADB’s LIG project site in Kampong Thom, Cambodia. It was truly an eye opening and deeply educational experience, and we extend our deepest gratitude to all members of ADB in Cambodia, FLIA board members, and especially the LIG members who welcomed us and generously shared their stories.
To our readers, thank you for taking the time to read this article. We hope it has given you a deeper understanding on how climate resilience, financial inclusion, and infrastructure can come together to transform lives. We’re excited to share this in greater detail through a documentary (which will be released soon) highlighting our experience and interviews with the members taking part in this inspiring initiative for change. Stay tuned and follow us on instagram for updates!
And remember: this isn’t just a story about Cambodia—no, it’s a story about how hope, support, and strategy can act as the catalysts of lasting change—and how you can be a part of it. As Country Director Jyotsana Varma put it: “it takes all hands on deck!” 🚢✨
For further information on how IDPoor levels are determined, check out this questionnaire. (if it doesn’t open, please use this link) (“New IDPoor”).
Members of the Grapevine pictured with officials from the Asian Development Bank (ADB), the Farmer and Livelihood Improvement Association (FLIA), and local project staff.
Works Cited
“Consultation Workshop: ‘Cambodia’s LDC Graduation: Policy Mapping and Sectoral Impact Assessment’” UNDP, March 7, 2025. https://www.undp.org/cambodia/speeches/consultation-workshop-cambodias-ldc-graduation-policy-mapping-and-sectoral-impact-assessment.
Hem, Chanthou. Senior Project Officer, ADB Cambodia Resident Mission.
Interview. Conducted by Seungheon Han, 30 Apr. 2025. For a Grapevine Documentary Project.
Kimsan, Ny. Deputy Head, NCDDS (National Committee for Sub-National Democratic
Development).
Interview. Conducted by Seungheon Han, 30 Apr. 2025. For a Grapevine Documentary Project.
Leakhena, Morn. Director, FLIA.
Interview. Conducted by Seungheon Han, Wanyu Shu, 30 Apr. 2025. For a Grapevine Documentary Project.
“New IDPoor Questionnaire.” IDPoor, Ministry of Planning, General Directorate of Planning, Department for Identification of Poor Households, Sept. 2022, idpoor.gov.kh/wp-content/uploads/2022/10/IDPoor-Final-Master-Questionnaire-v3.pdf. Accessed 5 Apr. 2025.
“Rice Exports Hit 1.5M Tonnes in Two Months, Generating Nearly $420M Revenue.” Kiripost, 2024, kiripost.com/stories/rice-exports-hit-15m-tonnes-in-two-months-generating-nearly-420m-revenue. Accessed 29 Apr. 2025.