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Monday, July 13, 2020

AGRICULTURE IN MALAYSIA - STATUS

Agriculture remains an important sector of Malaysia's economy, contributing 12 percent to the national GDP and providing employment for 16 percent of the population. However, the overall production of rice does not satisfy the country's needs, and Malaysia imports rice from neighboring Thailand and Vietnam. Before the 1970s, agriculture was the basis of Malaysia’s economic growth. While it remains an important sector. In Malaysia, there are two types of agriculture that was plantation and food production. On the plantation side, we are doing very well. In fact, the value of our palm oil exports is about RM70 billion a year. The food production side Malaysia are way behind our neighbouring countries. For example, Malaysia only produce 71% of the rice we need to be self-sufficient. We also lack fruit (66%), vegetables (40%) and ruminants (29%). There are many reasons food security has become a problem in Malaysia. The main one is that food crops are a lot harder to plant and maintain compared with oil palm. The lifespan of an oil palm tree is 25 years while that of most food crops is a few months to a few years. Growing food requires a lot of manpower as the turnover rate is high. Farmers need to use a lot of fertilisers and pesticides. As most of these products are imported, they are getting increasingly expensive due to the weak ringgit. Currently, there are five million hectares of land in Malaysia being cultivated for palm oil, compared with just one million hectares for food crops. A typical plantation company would have thousands of acres of land to cultivate oil palm. Food crop farmers, on the other hand, only have about five acres each to work on.

Farmers income is not big enough to attract more people to agriculture. Only 28% of the country’s population is involved in agriculture and they are, on average, 60 years old. Over the last decade, a lot of farmers have started to realise that plantations are a lot easier to maintain than food crops and palm oil prices are relatively stable. So, they quit planting food crops and start planting oil palm (Hevea brazilliensis) . Some of them even sold their agricultural land. It is sad to see the paddy fields in Kedah being converted into housing and industrial areas.  Pests and diseases are common and persistent problems that hinder food production.  Most local farmers have to deal with blast disease (rice), moko disease (banana) and fusarium disease (tomato), among others. At one time, dragon fruit was all the rage among farmers as Malaysia’s tropical climate, rainfall, intensity of sunlight and soil types proved to be very suitable for this exotic fruit. A few years later, the buzz died down after the plants were wiped out by certain fungal diseases. In fact later farmers stopped growing them entirely. 

These are some of the issues reducing our food production and making it difficult for us to meet the demand of the population. Of course, the growing population is also one of the factors. In 2003, Malaysia population was only 23 million. Now the population counted at 31 million. The government is doing its best to maintain the percentage of production, but it is harder 70% back then is not the same as 70% today. While the agriculture sector currently faces many problems, there are also opportunities. The export demand for local fruit has risen over the years, especially durians and coconuts,  For instance, the Chinese prefer Malaysian durians to those of other countries because their flesh is softer and more aromatic. Coconuts (Cocos nucifera) became popular when those in the West realised that coconut oil had more health benefits than other oils. Currently he demand is very high. Department of Agriculture did their calculations where the Matag Coconut Variety can produce 30,000 to 32,000 nuts per hectare a year. If multiplied by the net farm price of about RM2 per nut, farmers can generate about RM60,000 per year or RM5,000 a month in which is higher than what they can generate with oil palm (about RM3,000 per month).

Malaysia is also known for its mangoes (Mangifera indica), especially the Harumanis and Chok Anan varieties. Although mango farms are tougher to maintain than durian and coconut farms, as the fruit can be easily attacked by pests, it is still a good market with large demand. One programs by government such as Agropreneur Incubation every year aims to get 20% of its graduates to join the programme each year, but it is open to graduates of all fields. Previous participants included those with engineering, social science and education degrees. There are many loans available to those interested in becoming farmers, especially from Agrobank and the National Entrepreneurial Group Economic Fund (Tekun Nasional). However, it is not just a matter of knocking on their doors and asking for money. They need to see that the applicants have what it takes. The applicants should have already started planting something before applying. 

Unlike its neighbouring countries, Malaysia has an imbalance of upstream (raw materials for production) and downstream (end products to be distributed) products. That is why the country needs more agropreneurs. Countries like Thailand and Taiwan have so many downstream products, such as dried and canned food. Most of our downstream products are imported. Department of Agriculture and the Federal Agricultural Marketing Authority have done a lot to help increase the number of downstream products. Malaysians are perhaps not keen to explore agriculture due to the problem of limited land space. So, there needs to be a push for systematic planting techniques that do not require a lot of space such as vertical farming. However, as the initial cost of such projects is quite high, private-sector investors are needed. The end goal for us is to promote to people living in high-rise buildings to plant food crops, a bit here and there, for their everyday use. In the UK, this is very common. Almost every kitchen has a small herb garden. If every household does this, we will no longer have to import a lot of vegetables. Most local vegetables are easy to plant because most of them grow very fast. It takes less than a month to plant and harvest bayam (spinach) and kangkung (water spinach). 

According to the Department of Ststistic Malaysia (DOSM), Malaysia's natural rubber production increased 1.6 per cent in November 2019 to 53,019 tonnes as compared to the same month in the previous year. Comparison month on month also showed an increase of 9.3 per cent from 48,528 tonnes, which is recorded in October 2019. The agriculture sector contributed 7.3 per cent (RM99.5 billion) to the Gross Domestic Product (GDP) in 2018. Oil palm was the major contributor to the GDP of agriculture sector in 2018 at 37.9 per cent followed by other agriculture (25.1%), livestock (14.9%), fishing (12.5%), forestry & logging (6.9%) and rubber (2.8%).Selected agricultural commodities are divided into three categories namely crops (fruits and vegetables), livestock and fisheries. In 2018, a total of 36 agricultural commodities were covered and 22 of them recorded self-sufficiency ratio (SSR) more than 100 per cent.. Gross output of agriculture sector in 2017 was RM91.2 billion, an increase of 11.1 per cent per year compared to RM73.9 billion in 2015. Value added for this sector also increased to RM54.9 billion and value of intermediate input also increased by 6.0 per cent per year from RM32.4 billion to RM36.3 billion within the same period. In 2015, number of establishments involved in the fisheries sub-sector was 1,229 establishments. Gross output value was RM2,226.0 million or 3.0 per cent from total gross output of the agriculture sector with value added of RM747.6 million. This sub-sector also provides job opportunities to 15,690 people with salaries & wages paid amounting RM315.0 million. The econnomic reprots in 2015, number of establishments involved in the crops sub-sector was 8,029 establishments. Gross output value was RM50,763.3 million or 68.7 per cent from total gross output of the agriculture sector with value added of RM34,309.5 million. This sub-sector also provides job opportunities to 368,002 people with salaries & wages paid amounting RM6,125.8 million. Thanks.

By,
M Anem,
Senior Agronoomist,
Preciint 11, Putrajaya,
Malaysia.

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