Map of Malaysia

SABAH PENINSULAR

SARAWAK

Scenario of Malaysian Agriculture

Total land area - 33 million ha. Agricultural area - 6.6 million ha (20% of total area) Industrial crops - oil palm, rubber, cocoa, tobacco and pepper occupy about 77% of total agricultural land

Other crops

- paddy, fruits, vegetables & coconut cover 16% of total agricultural land

Agriculture sector in Malaysia is divided into :-

(i) Estate sub-sector

holdings more than 100 acres (40.5 ha) highly commercialized and efficiently managed owned by private companies, public-listed corporate entities or public land development agencies totally involved in the production of industrial crops such as oil palm, rubber, cocoa and pineapples

Agriculture sector in Malaysia is divided into :-

(ii) Smallholders sub-sector

average farm size is about 1.45 ha and owned by individual farmers collective acreage of land operated by 1,033,065 farmers amounting to 75% of the total area under agriculture less commercialized and less efficiently managed main contributors to food crop production as well as industrial crop production

Farmers Profile
Total Number of Farmers : approximately 1 million *

Paddy
Horticultural crop (Fruits, vegetables, floriculture) Industrial Crops (Rubber, oil palm) Other Crops

: + 400,000
: + 200,000

: + 750,000 : + 50,000

* Some farmers are involved in more than 1 crop

LABOR FORCE IN AGRICULTURE (1998-2004)

INDUSTRY PADI PLANTERS FARMERS LIVESTOCK FARMERS FISHERMEN AQUACULTURE SMALL HOLDINGS TOTAL 1998 302,852 311,979 43,222 115,901 8,966 387,982 1,170,902 2000 314,158 301,035 41,263 125,353 9,134 353,828 1,144,771 2001 320,587 284,637 36,790 136,610 8,528 290,146 1,077,298 2002 297,227 239,517 35,870 104,309 3,346 304,990 985,259 2003 268,542 245,976 34,005 102,933 4,067 337,792 993,315 2004 320,022 248,260 79,665 132,712 9,694 442,486 1,232,839

Farmers Profile
< 45 years old : 30%
25 % 45%

45-55 years old : > 55 years old :

SCENARIO OF THE NATIONAL AGRICULTURAL SECTOR

After Independent: Malaysian an agricultural nation Economic activity over dependant on agriculture & mining Contribution to GDP, 1957: agricultural sector = 46% Total work force, 1966: agricultural sector = 80.3% New Millennium Era Malaysian well known as producer of manufacturing products Contribution to GDP, 2003: agricultural sector = 8.45% Total work force, 2003: agricultural sector = 14.3%

CONTRIBUTION TO GDP
PLANTATION SECTOR (%) FOOD SECTOR (%)

YEAR

1995

9.6

3.6

2003
2004

5.2
6.1

3.3
2.9

 GDP
National= USD 133.8 million Agriculture= USD 11.6 million (8.7%)

Trade
Export
National Agriculture million (7.5%) Agro-food milion (4.1%)

Import

USD 144.3 millon USD 117.3 million USD 16.3 million (11%) USD 8.8
USD 2.7 million (1.9%) USD 4.8

Labor Force
National = 10.5 million person Agriculture = 1.5 million (14.6%)

MINISTRY OF AGRICULTURE & AGROBASED INDUSTRY

MINISTRY OF PRIMARY INDUSTRY & COMMODITIES

Food Subsector
Crop

Industrial Commodities
Palm Oil Rubber Cocoa Wood & Timber Pepper

Livestock Fisheries

MINISTRY OF AGRICULTURE AND AGRO-BASED INDUSTRY

DEPARTMENT OF AGRICULTURE

MALAYSIA AGRICULTURE BANK (BPM)

MALAYSIAN AGRI. RESEARCH & DEVELOPMENT INSTITUTE (MARDI) FEDERAL AGRI. MARKETING AUTHORITY (FAMA)

DEPARTMENT OF VETERINARY SERVICES

FARMERS ORGANIZATION AUTHORITY (FOA)

DEPARTMENT OF FISHERIES

MALAYSIAN FISHERY DEVELOPMENT BOARD (LKIM)

MUDA AGRI. DEVELOPMENT AUTHORITY (MADA)

MALAYSIAN PINEAPPLE INDUSTRY DEVELOPMENT BOARD (MPIB)

KEMUBU AGRI. DEVELOPMENT AUTHORITY (KADA)

NATIONAL AGRICUL TURE POLICY

National Agricultural Policy (Background)

Since 1984, three National Agricultural Policy (NAP) were formulated to develop the agricultural sector: Emphasis on NAP1 (1984-1991):- To develop the export oriented sector Current situation :

abundant labor force

expansionary economic policy adequate land resources commodity/ plantation (palm oil/ cocoa) infrastructure

1st National Agriculture Policy (1984-1991)

Focus on expansionary policy on export crop i.e. oil palm & cocoa Government invested heavily on infrastructure institutional building new land developments for oil palm & cocoa in-situ development to resolve uneconomic farm size & low productivity among small holders

Abundant land & adequate manpower

National Agricultural Policy (Background)

Emphasis of NAP 2 (1992-1997): Increasing productivity, efficiency & competitiveness Increasing land areas for palm oil (plantation crop) Development of agro-based industry

2nd National Agriculture Policy (1992-1998)

Greater focus on issues of productivity, efficiency & competitiveness

Shifted from new area development to in-situ development

Addressing the linkages with other economy sector

STRUCTURAL CHANGES (1992 1998)

ECONOMY Acute labor shortage Increasing costs Competition for land & water resources Economic & financial crisis Inflation

GLOBALISATION & LIBERALISATION Implementation of WTO, APEC, AFTA High import costs of food items

National Agricultural Policy (Background)

Emphasis of NAP 3 (19982010):
Increasing the competitiveness of the agricultural sector Maximizing income through : Optimum utilization of

resources Increasing agriculture contribution to national GDP Increasing income of producers

3rd National Agriculture Policy (1998-2010)

Further development of agrofood sub-sector as well as agro-based industries

1997 Asian Financial Crisis : Need to find alternative to manufacturing sector Agro-food sub-sector to be engine of growth

SPECIFIC OBJECTIVE OF NAP 3

Enhancing food security Increasing productivity & competitiveness of the sector Deepen linkages with other sectors Create new sources of growth Adopting sustainable development, utilization and management of natural resources

To Increased Value Added

Increased Production

9th MP (20062010) TARGETS

Increase SelfSufficiency Level
To Contain Import Bill

Improving the service delivery system

Increasing agricultural production including new sources of growth with greater private sector participation
POLICY THRUST
Expanding agro-based processing activities & product diversification

Enhancing incomes of smallholders, farmers and fishermen

Strengthening marketing and global networking

DEVELOPMENT OF NATIONAL AGRICULTURAL SECTOR (ISSUES & CHALLENGES)

ISSUES
INDUSTRY RESOURCE Small & uneconomic land holdings
* 65% paddy planters work on holding < 1 ha

FARMERS Ageing farmers : 39% age >55 years old Under employment
* Paddy planters: 27 days/season Coconut smallholders: 16 days/ month Perception of youngsters generation engaging in agriculture sector is not attractive

Competition for land resources

* 6.36 million land; 83 % for estate

Imported planting materials/ input

* Vegetables: 95% seeds imported * Fruits: 40% seeds imported * Fish try: 25%imported

Inadequate labor force: 19,343 foreign workers brought in for period 2001-2003 OVERSEAS Trade liberalization: WTO, APEC & AFTA
* Need to enhance competitiveness of agricultural products

PRIVATE SECTOR Agricultural is perceived as a poor mans sector & profile not comparable with other sectors Low productivity of the sector
60% lesser than productivity in the manufacturing sector Need to enhance productivity

Asian financial crisis 1997 & devaluation of values of Malaysian Ringgit (RM)
* Increasing cost imported agricultural inputs * Increasing of food import bills

CHALLENGES
Transforming small scale agro-industry into commercial ventures Ensuring adequate, quality, safe and nutritious food at a reasonable price

Reducing full dependency on labor force in the

agricultural sector Ensuring sustainable development of the agricultural sector Increasing competitiveness of the national

CHALLENGES
To make Agricultural sector as the 3rd engine of national economic growth (new source) New scope includes agro-based industry Development of the sector covers the total aspect of production and supply chain management

TRANSFORMING THE AGRI-FOOD SECTOR IN NEW ERA

Transformation of agriculture and agrobased industry as a sector which is : Modern, Dynamic, and Competitive

Scope of Transformation
Current situation
Farm size: - small - uneconomic

After transformation
Large scale, commercial & economic

Labor force: - limited - ageing

Mechanization, automation & technology Less labor intensive activities

Farm management: Professional, agriculture is business, - traditional - satisfactory - enough - manual

Application of ICT, Commercial management/ collective/economic of scale, Business Plan

Scope of Transformation
Current situation After transformation

Less/ not competitive: - Low product quality - non-standard quality - product dumping - price factor

Standard, certification & export quality

Return on Investment - Low - time consuming

Diversified returns: mixed farming, intercropping value-added

TRANSFORMATION

Transformation of Traditional Farmers

- Land/farm size cluster - Application of technology - Mechanization - Productivity Agricultural - Supply-demand matching - Marketing - Farmer Cooperation - Diversity of economic activity - Modernization

Sectoral Transformation
- Development based on zoning/ - Private sector investment - Investment incentives - Implementation of Good Practices Program (GAP)

Horizontal/Vertical Transformation
- Food processing - Value added activities - supply chain activities - by products

Transformation of Traditional Farmers

Land/farm size : Development of collective agricultural projects (ingroup) Amalgamation of farms towards creating commercial farm size (sizeable estates) Introducing systematic & modern farming practices Practicing standard manual(technology package, business plan & centralized management)

Transformation of Traditional Farmers

Application of technology : Research & Development based on current needs Commercialization & transfer of technology (TOT) Extension programs on technology & training On-site training

Transformation of Traditional Farmers

Reducing labor force in agriculture through : Reduction on labor intensive industries Promoting cultivation of new crops Promoting the production of environmentally controlled systems using mechanization and automation Accelerating R&D in creating new technology that reduces dependency on use of manpower/labor

Transformation of Traditional Farmers

Transforming of Farmers Association
Changing mindset of traditional farmers through capacity building and motivational programmers Creating model projects involving paddy, fruits, vegetables and livestock Contract farming & integrated farms Processing, marketing, value added, supply linkages activities Mixed cropping, inter-cropping and integration

Transformation of Traditional Farmers

Transforming of National Fishermans Association
Fund for Fishermen Program Use of fishing boats/ vessel and modern fishing equipments Skills enhancement through training and motivational program Branding & collection centre New market opportunities fish mart, fish kiosk, fish on wheel & in petrol kiosk Inviting giant companies to establish grand seafood restaurant with all modern facilities-as a model

Transformation of Traditional Farmers

QUALITY AND FOOD SAFETY

Accreditation and certification program : Producing safe and high quality food Producing food conforms to international standards Promoting sustainable agricultural development

Farm Accreditation Scheme (Skim Amalan Ladang Baik Malaysia or SALM)

Aqua Farm Certification Scheme (Skim Pensijilan Ladang Akuakultur Malaysia SPLAM)

Farm Accreditation Scheme Malaysia (SALM) Concept of SALM : Inspection and verification of farm by independent auditors Audit for conformance to accepted and defined protocols,

national guidelines, standards, legislation and policies.

Corrective and preventive actions by farm Benchmarking on specific farm based on EUREGAP, CODEX, others

Farm Accreditation Scheme Malaysia (SALM) Program to recognize farms that adopt : Good agricultural practices

Operates sustainable and environment friendly

Safe and quality produce for consumption

LIVE ST OC

ACC REDIT AT RM IO FA

DEPARTMENT OF VETERINARY SERVICES, MALAYSIA

FA
RM PRAC

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EST. NO. : ....

ME HE SC

Livestock Accreditation Scheme (Skim Amalan Ladang Ternakan or SALT)

BE

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(Veterinary Health Mark or VHM) Processed products

LOGO VETERINARY HEALTH MARK (VHM)

Transformation of Traditional Farmers Marketing Packaging, labeling and branding Conformance to Food Act 1974

Conformance to food safety and sanitation

Standard and quality

Quality Control System (MARDI QAS)

Seal of Quality

Promotion of Malaysian agricultural products through branding

Transformation of Traditional Farmers Diversification of economic activity

Integration of cattle in palm oil plantation Intercropping Mixed farming

Processing activities

Transformation of Traditional Farmers

Major Programs for Farmers Group Farming Project Permanent Food Production Park Project Transformation of Farmers Association Transformation of coconut Smallholders 10 Tan Paddy Project Malaysian Farm Accreditation Scheme Contract Farming Farm Mechanization Program Major Livestock Programs Cattle Integration in Palm Oil Plantation Closed System for Chicken Rearing Cattle feedlot system Malaysian Livestock Accreditation Scheme Major Programs for Fishermen Contract Farming Fund for Fishermen Transformation of National Fishermans Association Malaysian Aqua Farm Certification Scheme Contract Farming

Sectoral Transformation
Development based on zoning/cluster : Increasing productivity Enhancing efficiency Promoting down stream activities Promoting integrated development AQUACULTURE INDUSTRIAL ZONE CROP ZONING PRODUCTION ZONES FOR LIVESTOCK TARGET AREA CONCENTRATION

ZON MZ 1 (Mango Zone 1) Sub Zon MZ 1 (a) Mangga Tembikai Sub Zon MZ 1 (b) Mangga, Nanas, Jambu Batu Muar

ZON MZ 2 (Mango Zone 2) Sub Zon MZ 2 (a) Mangga Tembikai Limau Nangka Perlis, Langkawi, Kbg Pasu, Padang Terap, Pokok Sena, Kota Setar, Pendang Sub Zon MZ 2 (b) Mangga, Nanas, Jambu Batu K. Muda, Sik, Baling, Kulim, Bandar Baru, SPU,SPTS PS, T/Laut, B/Daya

CROP ZONING
Limau

ZON MFZ 3 (Mixed Fruit Zone 3) Sub Zon MFZ 3 (a) Sub Zon MFZ 3 (b) Tembikai Roselle Nanas Marang, Kuala Terengga nu, Setiu, Besut, Pasir Putih, Bachok, Kota Banru, Tumpat Sub Zon MFZ 3 (c) Limau Tembikai

Alor Gajah, Jasin, Melaka Tengah, Rembau

Kemaman Dungun, Hulu Terengganu

Pasir Mas, Tanah Merah, Macang, Jeli, Kuala Kerai, Gua Musang

ZON MFZ 2 (Mixed Fruit Zone 2) Sub Zon MFZ 2 (a) Betik Limau Mangga Sub Zon MFZ 2 (b) Betik, Jambu Batu, Roselle Mangga Batang Padang, Kinta, Perak Tengah, Manjung, Hilir Perak Sub Zon MFZ 2 (c) Belimbing, Nanas, Jambu Batu

ZON MFZ 1 (Mixed Fruit Zone 1) Sub Zon MFZ 1 (a) Belimbing Limau Roselle Tembikai Kota Tinggi, Johor Bahru, Kluang, Mersing, Rompin Sub Zon MFZ 1 (b) Belimbing Mangga Nangka Limau Segamat Tampin Jempol Bera Sub Zon MFZ 1 (c) Nangka, Mangga, Jambu Batu Temerloh Maran K. Lipis Bentong Raub Jerantut

ZON PZ 1 (Pineapple Zone 1) Sub Zon PZ 1 (a) Nanas Pontian Sub Zon PZ 1 (b) Nanas, Pisang Batu Pahat

Kuala Kangsar, Larut Matang, Hulu Perak

Hulu Selangor, Gombak, H. Langat, Petaling, Klang, WP, Seremban

ZON PZ 2 (Pineapple Zone 2) Sub Zon PZ 2 (a) - Peat Nanas Kuantan, Pekan Sub Zon PZ 2 (b) - BRIS Nanas, Roselle Kuantan, Pekan

Potential Fruit Crops

PAPAYA JACKFRUIT
BANANA CITRUS MANGO

STAR FRUIT PINEAPPLE MELON GUAVA

MALAYSIAS SUCCESS IN FRUIT TRADE

No. 1 in EU No. 1 in Hong Kong No. 2 in the world No. 1 in Hong Kong & No. 12 in the world

No. 17 in the world No. 18 in the world

Sectoral Transformation
Zoning/Cluster based development supported with activities, such as : Good Agricultural Practice Certification, Accreditation Schemes & Malaysias Best standardisation, commercialisation & transfer of technology Skilled training Supply demand matching Sustainable agricultural development Pest/disease control

Sectoral Transformation
Agro-based industry clusters: Meat based industry Fish based industry Fruit based industry Vegetables based industry Rice based industry Herbs based industry Coconut based industry

Sectoral Transformation
Promoting private sector investment : Modern Farm Project Incubation centre Offering more attractive fiscal and non-fiscal incentive facilities Providing information as guidance to private sector investment Promoting large scale involvement of GLCs Offering more attractive financial schemes Centralized information centre by AGRI FOOD Business Development Centre (BDC)

Horizontal/Vertical Transformation
Food Processing/value-added activities : Winning Products Program 4 optional categories Sauce Snack Chilled Snack Drink & Beverages Package includes: Branding Quality Upgrading Design and Packaging Scheduled Production Aggressive promotion and advertisement

Brand names to promote SMI Products

Branding Based On Quality And Food Safety

Horizontal/Vertical Transformation
Supply chain activities: Infrastructure and marketing facilities Farm Collection Centre

ICT facilities and post harvest handling equipments (grading, curing, storage, transportation, packaging and labeling)
Information on market and extension Improvement to delivery process

INTEGRATED SUPPLY CHAIN

PPL
S u p p l y C ha i n Management (SCM) Farmers Dist/collection centre
Fresh produce

Distributors

Supermarket/ Hypermarket/ Retailers

Consumers

DC
(DC) Chui Chak Selayang Processors Puchong Tangkak Bkt. Mertajam Processed products Melaka Johor Bahru TESCO Giant Lifestyle Carrefour Billion PizzaHut Makro

BDC

FAMAX/AgricX

Receiving orders FAMA

Scheduled planting

Input procurement

Farm management

Collection & post harvest

Delivery

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