Land Reclaimation in Malaysia (AARDO Paper)

I and Dato Sofian in front of EICA Training Center at Cairo, Egypt. 

This is my paper for AARDO Training Course at EICA, Cairo, Egypt in 2005.
LAND RECLAIMATION AND RURAL DEVELOPMENT :
Policies, Strategies and Practices in Malaysia


I. INTRODUCTION

1.1 Malaysia is a tropical country consists of two land masses with a total area of 330,434 square kilometers. Malaysia geographically is the Peninsular Malaysia (West Malaysia) and East Malaysia (Sabah & Sarawak) which separated by South China Sea. Local time is 8 hours ahead GMT and it enjoys a perpetual summer with high humidity throughout the years. This paper discussed the Malaysian experience on the issues on development of unproductive land for food production and explains about policies, strategies and practices carried out for rural development.

1.2 Malaysia, a middle-income country is transformed itself from 1971 through the late 1990s from a producer of raw materials into an emerging multi-sector economy. Growth was almost exclusively driven by exports in which particularly of electronics. As a result Malaysia was hard hit by the global economic downturn and the slump in the information technology (IT) sector in 2001 and 2002. GDP in 2004 estimated about 6.1%. The Malaysian ringgit is pegged to the dollar.


II. AGRICULTURE IN MALAYSIA
2.1 Malaysia has one of the highest standards of living in South East Asia beside Singapore and largely earned by its expanding manufacturing sector. However income distribution is very uneven, particularly in rural areas where their income generated from agriculture sector. Despite government efforts, wealth is distributed in agriculture sector primarily along ethnic lines. In terms of agricultural employment, Chinese and Indians tend to manage estates, while most native Malays/Ibans/Kadazans cultivate oil palm, rubber and small quantities of cash crops, such as pineapples, cocoa and tobacco. There are small number of native people and “Orang Asli” still practicing subsistence farming.

2.2 Rice is the staple food in Malaysia and commonly grown in the flat irrigated areas in the state of Kedah, Perlis, Kelantan, Selangor and Perak. Rice production in Malaysia is about 60 – 70% self sufficiency. Malaysia imports rice from Thailand, Vietnam, India, Myanmar and other neighbouring country to fulfill the domestic needs. In term of a poultry and eggs production, Malaysia produce more than domestic needs and exported to neighbouring country especially to Singapore. The production of fresh beef, mutton milk is inadequate supply. India, New Zealand and Australia are the main supplier of fresh beef to Malaysia traditionally. Livestock integration with industrial crops such as oil palm will continuously promote under suitable land.
2.3 Although the contribution of agriculture within the economy has been declining for some years, it continues to be a strong sector. The existing Prime Minister Datuk Abdullah Ahmad Badawi has encouraged agriculture sector to become third engine of economic growth. This is of great credit to Malaysian farmers to increase income by modernizing agriculture sector. Government through its Ministry of Agriculture and Agro base Industry and their agencies will implement progressive approach under Ninth Malaysian Master Plan – RM 9 (From Year : 2006 - 2010).

2.4 Palm oil has been one of the biggest success stories in Malaysia in estate plantations of selected fertile soils. Underutilized land and problem area are grown with oil palm after improvement of basic infrastructure. Palm Oil was introduced by colonial era in estates plantation in the Peninsula Malaysia and now expanded to East Malaysia especially in the State of Sabah. Production of oil palm is more than ten million tones of oil per year and it was over half of the world's supply. Other neighbouring country such as Indonesia and Thailand are now following the trend. In the last thirty years palm oil has grown to be the second biggest vegetable oil behind soybean.

2.5 The productivity of the Malaysian oil palm industry has been steadily improved at all levels, including the quality of planting material, cultural practices, processing methods and marketing strategies. Estates plantation can now yield up to 5 tones of oil per hectare every year, which is more than double the yield of any other oil crop under intensive cultivation. FELDA is the largest smallholder plantation in this country involves oil palm production. (Left photo at Pyramid with Dato Soffian)

2.6 Malaysia is also the world's leading supplier of natural rubber whereby about 80% of which is produced by smallholders on medium fertile soils. Prices and export volume for rubber have both fallen in recent years owing to huge stocks in the region and slower demand from consumers. Hence government support for the smallholder sector with grants for planting materials, fertilizers and pesticides through its agency, RISDA. Smallholders have been able to use their grant to replant with more rewarding crops.

2.7 The fishing industry is also hugely important in employment either directly or in processing plants and the number is up to 100,000 people. Fishing industry provide roughly half the country's animal protein consumption, and bringing in foreign exchange, particularly to rural communities. Fishing of the inshore waters - up to 30 nautical miles from the coast - accounts for 80% of production and of human labors in the industry, with the bulk of the catch taken by trawlers, and the rest by tens of thousands of smaller operators. Fish stocks along the coasts have been severely depleted, such that the government has stopped issuing new licenses for fishing craft and created a series of zones within the inshore waters to control the types of vessels and equipment used. Reducing the number of inshore fishers is a priority, and they are being encouraged to move to aquaculture, fish processing, or deep-sea fishing in offshore waters. .

2.8 Aquaculture on mudflats (for cockle farming), and fresh and brackish water, ponds (for carp, tilapia), currently provides about 10% of domestic fish consumption, but the sector is being aggressively promoted, and is expected to be a significant supplier of Malaysia's growing demand for fish in the future. Underutilized acidic soils at coastal area are suitable for aquaculture project for fish and prawn production. 

2.9 About 80% of Malaysia's population and the majority of its industry are concentrated in one third of its land area located at West Malaysia. In Eastern Malaysia the population is 75% rural which an indigenous tribes form a much larger part - 15% in Sabah, and 40% in Sarawak. Some still practice shifting, slash-and-burn cultivation in the forest areas, but state authorities are keen to reduce this, and to exploit the agricultural potential through large scale land development for commercial farming. This has involved consolidating fragmented farm holdings, particularly in 'Native Customary Lands', to form mini-estates. In this way, bodies like the Sarawak Land Development Board have developed 'under-utilized' land for oil palm, rubber, cocoa and tea. Smallholders in Sarawak also produce roughly 20,000 tones of pepper per year, most of which is exported.

Group photo of EICAA participants from 16 countries at Giza City, Cairo.

2.10 Malaysia is the major world exporter of tropical wood, with more than 80% coming from Sarawak and Sabah. In 1999 it was estimated that out of the previous 305,000 sq km of tropical forests, only 157,000 sq km were left. To control the exploitation of Malaysia's forest resources, the government has designated 69% of the remaining forest area as Permanent Forest Estate. Within this there are strict rules governing how many trees can be cut per hectare, and the size of trees that may be felled. In addition, 12% of the forests are designated as Totally Protected Areas; these form the country's national parks and forest reserves and permit no felling or harvesting of forest products. The remaining areas are open to greater commercial exploitation. However, in order to maintain revenues while reducing the number of trees being cut, the government has encouraged greater downstream processing of logs, for example into sawn timber and furniture. Plantations have also been established to reduce the demands on natural forests, for example teak plantations in the north of the peninsula, and fast growing exotics in the Peninsula and Sarawak.


III. AGRICULTURAL LAND USE

3.1 Land use in Malaysia in 2003 reported about 5.48% are arable land and 17.61% planted with permanent crops or developed with agricultural area. About 93% (5.93 million hectare) of developed agricultural area are grown with industrial crop that is Oil Palm, rubber, cocoa, coffee, paddy, tea, tobacco, coconut and sugarcane. Total area of paddy production area about 481,024 hectare and mostly are flat irrigated area located Peninsula Malaysia in the State of Kedah, Perak, Kelantan and Selangor. Hill paddy is grown by natives in Sarawak and Sabah about less than 2,000 hectares.

3.2 Fruit crops are grown traditionally around the Malay Village and only late 1970’s some commercial fruit farm established. Durian, Watermelon, Banana, Papaya, Pineapple, Local Citrus, Guava, Mango, Star fruit are some selected tropical fruit grown in commercial scale. Processing activity for seasonal tropical fruit enhance farmer’s income. Rehabilitation programs for old trees with new varieties where conducted by government and subsidy amounting RM 1,200.00 /hectare was given as an incentive. Please refer to Table 1 the break down of land use by crop category.


Table 1: Crop hectarage by Crop Category 2003

No. Crop Category Hectare
1 Industrial Crop (Oil Palm, Rubber, etc) 5,936,324
2 Fruits (Seasonal/Non seasonal) 304,989
3 Vegetables (Highland/Lowland) 39,793
4 Cash Crops/Short Term Crops 16,018
5 Spices 18,058
6 Other Crops 65,773
TOTAL 6,381,157
Source: Department of Agriculture, 2003 Crop Statistic Report
3.3 Soils in Malaysia are mostly are very fertile and only small percentage are categorized as problem soil; That include Peat Soil, tin tailing soil, Bris Soil and Steep area (Highland). Other categories are Marine-clay soil and Riverine-clay soils or mixed both Marine-Riverine clay. About 2 million hectare of OCM (Organic clay muck) or Peat soil is found mostly in Sarawak and some state of Johore, Selangor and Perak. Previously OCM soil is grown with cash crops, pineapple but the recent trend the farmers tend to convert the vegetation to oil palm.

3.4 There is 168,135 hectare of bris soil in Malaysia. Bris soil is sandy coastal soil and not fertile due to lack of organic and found at the state of Terengganu, Kelantan, Pahang and East Johore. Only vegetable, tobacco, cashew nut, vegetable and short term crop grown with proper system for this area. Most of bris soil is left idle.

3.5 Tin Tailing soils are found in the state of Perak and Selangor and normally used as fruit or vegetable production area. Soil enrichment programs and water management system from the lakes or river is important factor for farmers to irrigate the area. Manggo and star fruit are widely grown in tin mining area. Steep land development program follows regulation to ensure sustainability. Only Cameroon Highland, Kundasang, Borneo Peak and Lojing are developed mostly for highland vegetable and cut-flowers.

3.6 There is reported about more than 10,000 hectare of idle land throughout the country. For the State of Johore alone reported about 3,580 hectare categorized as idle land. Idle land is define as land belongs to farmers and left idle or not planted with any crops for the period of three continuous years and for paddy farm is left for 6 planting seasons. Reasons for idle land are due to uneconomic size, degraded soils, acidic soils, lack of infrastructure (swampy area/ no access road) , lack of owners interest, lack of capital, high cost for initial development (scattered area), low soil fertility and uncertainty return of investment. Cost of development of idle area about RM 5,000 – RM 10,000 per hectare depending on the location and crop selection. For the state of Melaka and Negeri Sembilan the farmers convert their ex-idle paddy land with oil palm, vegetable, food crop, fish ponds, tropical fruits and many others. Since the average Malaysian farmers are 60 years old and less youngsters turn to agriculture sector, it will contribute more idle land in future. Land consolidation programme is an alternative way to develop idle underutilized area for food production.


IV. RURAL DEVELOPMENT

4.1 Malaysian government provides an adequate programs for rural developments. Ministries involves in this programs are Ministry of Agriculture and Agro based Industry, Ministry of Prime Commodities, Ministry of Rural and Regional Development, Ministry of Natural Resources and some others. For oil palm plantation industry, the government through its agency such as FELDA, FELCRA, SALCRA and many others together with private sectors seriously develop the oil palm plantation from the beginning of growing palm oil in the farm, processing up to the export activities.

4.2 Ministry of Agriculture and Agro based industry through its 14 Department and Agency consists more than 14,000 manpower provide adequate rural development programs as mentioned in Third Agriculture Malaysian Master Plan (DPN 3). Allocation has been doubled in 2005 to boost agriculture sector to be the third engine of growth for a total about RM 1.3 billion. Both rural and private sector has to play its role to achieve government target in the Balance of Trade (BOT) programs to reduce Malaysian Food Import Bill (Refer Table 2). There is about RM 13 billion of food import bill last year and the government plan to reduce it by Ninth Malaysian Plan (2006 - 2010).4.3 Ministry of Agriculture plan to increase food for export from RM 790 million in 2000 to RM 2,673 million in 2010 (Refer Table 3). Commodity like rice and vegetable has their own limitation in the production due to limited land for paddy production and the importance of imported vegetable for domestic consumption. The fruit and coconut production contribute more in the export activity by implementing more production activities and processed product. Selected tropical fruit has been identified for export as fresh (Pineapples, papaya, watermelon, manggo, starfruit etc) and processed (Durian, Jackfruit, Pineapple etc).

V. APPLICATION OF MODERN TECHNOLOGIES

5.1 Malaysia with 25 million population are capable to become one of the worlds food production center in years to come due to excellent infrastructure facilities such as Modern Highways, Latest Modern Airport, Sophisticated Port, Railroad and ICT facilities. Various scheme for food production activities and incentives are available from financial assistance up to production and marketing.5.2 Oil palm and rubber technology are advanced in Malaysia from plantation activities to a finished product due to long research activities by Malaysian Palm Oil Board (MPOB) and Malaysian Rubber Board (LGM). For food crops technology, potential are at the on-going stage and not many research has been done in this sector. Government through its research agency (MARDI) and private sector must commit to do research and boost food production technology in Malaysia.

5.3 Problem soil such as Bris Soil, Tin tailing soil, Peat Soil, Acidic soils and Steep soil are the potential area for future food production with new technology adoption. Introduction of processed organic fertilizers and good irrigation system will ensure the problem soil can be grown for food crop.

5.4 Marketing system through supply chain management (SCM) are improved tremendously in Malaysia. For domestic marketing system the existing local wet market, Pasar Borong, Pasar Tani, Pasar Malam are the traditional outlet that is available. There is huge marketing channel through international giant marketers such GIANT, MAKRO, TESCO, CARREFFOUR through out the nation. With guaranteed quality safe product and labeled with SALM or ‘Malaysia’s Best’, Malaysia are capable in the new concept as “Worlds Kitchen’ as our neighbors did.

VI. POLICIES, STRATEGIES AND PRACTICES

6.1 Development in agriculture sector in Malaysia was planned with three National Agriculture Master Plan (DPN1, DPN 2 and DPN 3). DPN 1 (1984 – 1991) and DPN 2 (1992 -2010) strategies more on farm productivities, efficiency and involvement of private sector. The plan is to ensure that the agriculture sector contributes to the national economic and its global competitiveness remains strong in the future. Under Third Agriculture Malaysian Plan (DPN3 from 1998 – 2010), the government intends to increase farmer’s income through domestic contribution and export of agriculture product. The objectives of NAP3 are as follows:

i) To enhance food security;
ii) To increase productivity and competitiveness of the sector;
iii) To deepen linkages with other sector;
iv) To create new sources of growth for the sector; and
v) To conserve and utilize natural resources on a sustainable basis;

6.2 Malaysia with 25 million populations has thousands hectare of land for future Agriculture Project development especially in Sarawak. Land reclamation in this country mainly located to urban area for urban needs such as for commercial zone, housing and industrial needs and not for agriculture use. Only 4 states manage to complete coastal land reclamation Project that is Melaka (For Commercial zones), Pulau Pinang (For Airport), Sabah (For Commercial zones and airport) and Negri Sembilan (For Commercial and Tourism).6.3 Tin mining activities in Perak and Selangor active during colonial era and just after independent day but now mostly slowdown their activity. Nowadays tin tailing soil is developed for agriculture area or for tourism purposes. Cost of development range between RM 3,500 – RM 5,000 per hectare for fruit and vegetable project. The cost mainly for irrigation system include water pumps, HDPE piping, drip/sprinkler systems, farm roads, land preparation and initial operational costs. The largest ex-tin mining area developed for tourism located at Sri Kembangan, Selangor. It was developed by Malaysian Mining Corporation Berhad (MMC) located only 15 kilometers from Kuala Lumpur City. The lake (estimated 7 km square) is identified as source of fresh water fish (Tilapia, Catfish, Toman) and others. (Photo 3 of us at Night Market in Cairo...) 
6.4 Highland area is located in the state of Pahang, Perak, Kelantan, Sabah and Sarawak is the main producer of Highland Fruit/vegetable and flowers. Cameroon Highland in Pahang is the largest vegetable producers in the country for domestic and export. Land developments in the highland are strictly managed by the local government. With proper technology and enforcement by the government will ensure the development is environmental friendly. Kundasang in Sabah are other highland agricultural productive area located just below South East Asia highest mountain that is Mt Kinabalu (4,101 m).

6.5 The only area for rural development with regard to land rehabilitation programs is conversion of idle land to other activities. Most idle paddy land in Malaysia is an impact of urbanization process and modernization of Malaysian society. Abandoned paddy area in most states (Penang, Melaka, Negri Sembilan, Kedah, Kelantan etc) by the land owners begin tremendously in late seventies and early eighties. The conversion of paddy land to commercial area (Housing, Industrial factory and Infrastructure development – such as highways/roads) taking place drastically. Irrigation system in the area was disturbed and uncertainty of water supply caused paddy planting schedule cannot follow.

6.6 Some states developed the idle paddy area to fruit farm (Manggo – in the case of Malacca). About more than 3,500 hectare of paddy area in Malacca has been converted to Manggo plantation, oil palm and cash crops (manggo variety - Mas Delight). FELCRA are the federal agencies to develop idle area for oil palm development project. More than 0.5 million hectare of idle or under-utilized land has been developed with oil palm by FELCRA. This approach is a successful program for rural development program in Malaysia.

6.7 Ministry of Agriculture through Department of Agriculture, Farmers Organization Authority introduced Idle Land Rehabilitation Project belongs to smallholder through out the states. Government provide basic infrastructure (about RM 3,500 - RM 5,000/ha) such as drainage, farm roads, irrigation systems/canals, marketing facilities to develop the idle for food production area. Land owner act as share holders or workers in the project site depend on management system (Centralized or Decentralized). Training to the extension agent and farmers are important in the development process.

6.8 Department of Agriculture introduces programs to increase farmer’s income through various project such as Food Crop production Project (TKPM, Paddy, Fruit, Vegetable), Group Farming, Food Processing, Regulatory Activities and Extension Programme. TKPM Project (Permanent Area for Food Production) is the most recent approach where the government provides land with complete infrastructure and selected farmers pay suitable amount of rent (RM 650.00/ha annually) to produce edible food. In 2004 about 802 hectare has been developed and up to October 2004 the production about 9.78 metric tons (Estimated RM 5.6 million – mostly new area). All farms are accredited with SALM and GAP certification program.

6.9 Group farming is a smallest production unit in the village organized by the department depends on crops or commodity. The department officers provide extension services and small amount of subsidy to the group to increase food production. Please refer table 5 the rate of government assistance to the group farming project. T&V System training and visit) are applied on project basis. A total of 4,540 projects with 155,672 farmers for an area of 199,625 hectare were recorded in 2003. Extension services by department follows MS ISO 9001:2000 systems to ensure the delivery of services. Each farmer targeted to earn more than RM 1,000 nett per month.6.10 Organic farming is very new in Malaysia. It was introduced in Malaysia in 1987 and until now about 131 hectare reported as organic farm. It will be the alternative project for underutilized land in future. The farm located in Cameroon Highland, Kundasang and Negri Sembilan with mostly on vegetable production. Organic Paddy growing in inland Bario of Sarawak is the largest production area. Department of Agriculture comply Sijil Organik Malaysia (SOM) to accredit organic farm. (Photo during site visit at Dina Farm about 60 km from Cairo...) 
6.11 There is 1,347 women group formed by the department with 33,000 participants to increase farm family’s income by implementing food processing activity. About 1,815 projects include traditional cake makings, foods and drinks, bakery, coconut product, composting, fruit processing and frozen food product and others with the value of RM 94.5 million annually. Department provide training and technology advancement for the group and introduce GMP (Good Manufacturing Practices) and HACCP Certification process. Training is conducted at PBU (Pusat Bimbingan Usahawan) at Serdang, Selangor that cater for the whole nation. There is many other smaller centres at state level for training of local participants.


VII. RURAL DEVELOPMENT WITH IADP CONCEPT

7.1 Ministry of Agriculture developed selected under utilized area with Integrated Agriculture Project (IADP) approached. This project focused on an area and basically on determined objectives. Most of the IADP’s project provide adequate infrastructure such as farm road, drainage, tidal gate, ban, river alignment, flood mitigation and others to improve soil in the selected area for agriculture development. About 14 IADP were implemented since 1970’s and 5 IADP’s completed by late 1980’s. Most paddy IADP’s area are still ongoing whereby non-paddy area mostly completed the project. Table 4.1 and 4.2 indicates the IADP’s project thought the country and their cost of developments under RM 8. Each IADP’s consist of Project Management Unit (PMU) and supported by technical department such as Department of Agriculture, Drainage and Irrigation Department, Veterinary Services Department, FAMA, MARDI, BPM, Farmers Organization Authority, FELCRA, RISDA, FELDA, Fisheries Department, LKIM and JPS (Drainage and Irrigation Dept.).

IADP’s Project State Development Concept Status 1. East Neg. Sembilan N. SEMBILAN Idle paddy/native land Completed
2. MIADP (Melaka) MELAKA Dev. Idle paddy area Completed
3. West Johor JOHORE Dev. of peat soil/Drainage Completed
4. Lembah Kedah KEDAH Dev. of underutilized land Completed
5. West Pahang PAHANG Dev. of underutilized land Completed

7.2 IADP West Johore for example is implementation project to develop more than 250,000 hectare of peat area with improvement of drainage system and construction significant amount of farm road. The area previously submerged under water during monsoon season in December. After project completion about 150,000 farmers utilized their farm with oil palm, coconut, vegetable, cocoa, banana and many other food crops. Other relevant activities such as food processing, poultry farming, fresh water fish project determine farmer’s income reach more than RM 1,000 a month. 

7.3 Rice production area such as in KADA, MADA and few other IADP’s such as IADP Krian-Sg Manik, IADP Seberang Perak, IADP Barat Laut Selangor, IADP Pulau Pinang and IADP Besut is maintained by government to ensure 60% nation’s rice self sufficiency. Even though national average rice production about 4.5 – 6.0 m.t. per hectare, technology has been developed to produce 10 m.t. per hectare as achieved by farmers in Selangor and Perak. Department of agriculture introduce ‘RICE CHECK’ package to ensure paddy farmers follows the technology for optimum yield. Other related programs are land leveling, water control system, IPM (Integrated Pest Management) and introduction of new varieties (MR 299). 

7.4 Development cost for ‘area development’ vary from IADP’s due to soil type, commodity, project location , year of implementation, land status, type of infrastructure, management system and other factors. Peat area required the most cost due to the soil condition. Since most peat soil located to the coastal area, construction of tidal gate is a compulsory to control water level and salinity problem. Development cost for commodities depend on the crop selected by the farmers to grow. Table 5 showing an estimate government assistance rate for food crop project in Malaysia. 


VIII. CONCLUSION 

Malaysian government is very serious in agriculture development programme to ensure it will contribute as third engine of growth for National Gross Domestic Product. Government introduces adequate policies and strategies for maximizing land utilization especially for food production for domestic and export. Rural area plays an important role in which about 75% of the farmers are involved directly for development. Reclaimed area and under utilized area is developed through intensive programs to increase farmer’s income. Food production together with industrial crop such as oil palm, rubber and timber product should go along in the export contribution. Private sector, government agencies and rural society should work together to ensure the agriculture sector in Malaysia plays an important role in future. 


THANK YOU.... 
******************************************************** 
Mohd. Anim bin Hosnan
Tel : +6019-7145433 (HP)
+603-88703409 (Office)
Email : anim@doa.gov.my


VIII.   REFERENCES :1. Malaysia 2001. Crop Statistic. Department of Agriculture, Kuala Lumpur.
2. Chamburi Siwar & Rospidah Ghazali. Agriculture Transformation. National Seminar on Agriculture Multification Function and Natural resources : Prospective san Challenge. The Mines Serdang, Kuala Lumpur; Oct 2004.
3. Malaysia 2004. Land Use Report (Unpublished). Soil Management Branch, Air Hitam, Johore. Soil map.
4. Malaysia 2001. Third National Agriculture Master Plan (DPN3). Ministry of Agriculture and Agro based Industries, Kuala Lumpur.
5. Ismail Ibrahim. Focus of the Department of Agriculture (Unpublished). DOA Agriculture Officers Seminar, Johor Bahru July,2004.
6. Mohd. Anim Hosnan. Idle land development programs Segamat District, Johore.(Unpublished). Johor (2003).
7. Buku Ringkasan Panduan Pertanian. Jabatan Pertanian Kuala Lumpur (2003).