This paper analyzes how Cambodian farmers and the government can respond to the rise of rice price. The study estimates rice production response in Cambodia using the Cambodia Socio-Economic Surveys (CSES) conducted in 2004 and 2007. The results indicate that agricultural productivity is far from its potential and can be increased substantially by using modern technology and inputs such as fertilizers and irrigation. Our findings also suggest that the Cambodian government needs to design its investment strategy to relax constraints in rural infrastructure such as transportation and electricity in order to increase its agricultural production and productivity and boost farmers’ income.