FOREIGN companies are trying to secure 70-year leasing rights to more than 300,000

hectares of Cambodian land for agricultural projects.

The companies are being charged a top rate of $10 a hectare per year for the best

land, down to $2 a hectare or less - even free -for more isolated blocks.

So far only two of the 37 applications have been approved by the government and both

are expected to begin soon after the election.

The projects are being put forward by Taiwanese, Malaysian and mainland Chinese businesses.

They want to grow cash crops such as coffee, cashew nuts, rubber, tea, fruit, rice

and cassava.

Deputy director of the Agriculture Ministry's department of planning and co-operation,

Kith Seng, said in addition to the officially approved projects there have been two

others operating illegally.

Their future is unclear.

He said the main problem with the projects was finding the massive amounts of land

being asked for.

He said with that in mind they have introduced a series of incentives for companies

to create their developments in isolated areas.

The leasing fees are initially dependant on the quality of the land.

There are four categories ranging from the most fertile to the least.

The fees can then be adjusted, with discounts for land in isolated provinces such

as Ratanakiri.

Further discounts are then offered if there is little surrounding infrastructure

and access.

Many NGOs are concerned at the prospect of substantial amounts of land being given

over to plantation farming.

The largest project to be approved so far is for a Chinese company from the Guangxi

Zhuang Autonomous Region.

Described by the Chinese news agency Xinhua as China's "biggest agricultural

project" outside the mainland, the Guangxi project team first asked to lease

23,330 hectares of land in Kampong Speu.

So far 18,000 hectares has been "secured" from the present landowners and

approved by the government. A further application has been made for the rest.

An official from the Ministry of Agriculture said that the company's original plan

would have involved leasing and clearing a section of Bokor National Park, a move

the government rejected.

The land will be planted primarily in eucalyptus and sugar cane.

However, one local commune chief has criticized the plan, saying the first he heard

of the project was when company signs started going up on commune land.

He said that his commune had not been consulted, nor had local people been paid for

their land.

A land rights expert said this was symptomatic of the problems of large scale plantations

in a country with an unworkable land law.

The land rights expert said until problems with titling and transfer of ownership

are solved the poor are going to lose their land to the rich and powerful.

Meanwhile there are also doubts over the viability of plantation farming. One NGO

report pointed out that palm oil plantations did not provide employment for those

dispossessed of their land, who in turn had no means to earn money or to grow food.

There is also concern that plants like eucalyptus deplete the soil, leaving it infertile.

Based on the experiences of similar plantation projects in Ratanakiri, one NGO worker

wondered whether companies seriously wanted to get involved in agriculture.

She said that there were indications it was simply a back-door way of securing land

that could later be sold or sub-leased for a substatial profit.

A Ministry of Agriculture official said that the companies will have to employ local

labor, although they may bring in their own experts.

He also said that any company breaching their agreement would have their concession

cancelled and would not be paid compensation.

Company officials have been reluctant to discuss details of the project, saying that

they would rather wait till the second application has been heard before going public.

A spokesman for the Chinese Embassy said he had little knowledge of the project but

said as a matter of policy "the Chinese government encouraged overseas investment".

This is not the first attempt by the Chinese to secure a large block of land in Cambodia.

In 1994 there was a proposal put forward for exactly the same quantity of land to

build an entire Chinese city.

The $1 billion proposal, which was eventually vetoed by Hun Sen, would have seen

a 20 square kilometer area of land next to Phnom Penh turned into a city for 200,000

mainland Chinese.

The proposal went through the Cambodian Developement Council who decided it was too

political, referring it instead to the Council of Ministers.

The proposal was rejected.

The CDC says that at this stage there are no plans to resurrect the city proposal,

though sources say the project is still "kicking around".

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