Dr. Zainizam bin Zakariya zainizam@fpe.upsi.edu.my 015-48117727 Block 10, p12, level 3 KSAS
TOPIC
Overview of Agriculture Sector Government Policy on Agriculture Contribution and significant of the sector Problems and Challenges Summary and Conclusion
Food Subsector
Crop
Industrial Commodities
Palm Oil Rubber Cocoa Wood & Timber Pepper
Livestock Fisheries
DEPARTMENT OF AGRICULTURE
MALAYSIAN AGRI. RESEARCH & DEVELOPMENT INSTITUTE (MARDI) FEDERAL AGRI. MARKETING AUTHORITY (FAMA)
DEPARTMENT OF FISHERIES
After mid 1980s, mfc has been the major contribution to economic growth After 1998, agriculture sector has been significantly reemphasised to
increase food SS for domestic consumption assist a large segment of the rural Malaysian population supply labour and raw materials to non-agriculture sector overcome BOP deficits in food crops
Stage 2
1960s-1970s Oil palm and land development
Stage 3
1980s-1990s - Food security, productivity and sustainability
Stage 4
2000s-2010s biotechnology and new agriculture
Due to problems with slow growth of agriculture sector, the sector could not sustain the growth Need to diversify the agriculture sector
Stage 2 (1960s-1970s)
Main focused on land development to boost the agriculture sector and alleviating poverty in rural area Many land authorities have been established
FELDA The Federal Land Development Authority RISDA Rural Industry and Smallholders Development Authority FELCRA Federal Land Consolidation and Rehabilitation Authority
NAP1 (National Agriculture Policy 1) was launched in 1984 for a period of 1984-1991 due to inability of NEP to reduce poverty in rural. Aims
Maximizing income from agriculture activities Raising productivity, expanding production of traditional export crops Development and promotion of potential export crops At least 80% self-sufficiency in dom foods production
Opening new land schemes, expansion of in-situ project,
Was introduced in 1984 to modernized & revitalized the agriculture sector, to lesson poverty & raise efficiency Focus on expansionary policy on export crop i.e. oil palm & cocoa
Objectives: The maximization of income through optimal utilization of resources in the sector Increase the food production for local market such as paddy, vegetables, fruits & poultry
Main strategies involved (land development, In-situ development, support services) Strategies: Government invested heavily on institutional building new land developments for oil palm & cocoa (by Felda, Risda, Felcra) in-situ development to resolve uneconomic farm size & low productivity among small holders (aimed to improve productivity in existing agricultural areas by providing infrastructure and other services)
NAP2 (1992-1998) was launched in 1992 to fulfil the strategies underlined in the NAP1 with obj
balance of development bet agr and non-agr Attainment of sustainable development
Was introduced in 1992 It was undertaken as Malaysias Vision 2020 which introduced in 1990 This policy encouraged alternatives use of agricultural land for higher value added activities It was market oriented, commercialized, efficient, competitive & dynamic
Objectives: The maximization of income through optimal utilization of resources in the sector Increase the food production for local market such as paddy, vegetables, fruits & poultry
Strategies:
1.
Emphasis of NAP 2 To further strengthen and enable agriculture sector to contribute substantially to the economic growth of the nation Increasing productivity, efficiency & competitiveness Increasing land areas for palm oil (plantation crop) Development of agro-based industry Acceleration the transformation of the sector into a dynamic and commercialized sector
Optimization of resource utilization was encourage to diversify out of export crop cultivation into other activities 2. Acceleration of Agro-based industrial development which generate more off-farm opportunities for smallholder to earn additional income 3. Enhancement of R&D are needed to overcome the production process, labor and other constraint in the agriculture 4. Greater participation of private sector were needed in order to transform the agriculture sector into a competitive and efficient sector 5. Human resource development is a key strategies to achieve increased productivity and output of both labor and land
Emphasis of NAP 2 (1992-1997): Increasing productivity, efficiency & competitiveness Increasing land areas for palm oil (plantation crop) Development of agro-based industry
2 major strategies
Emphasis of NAP 3 (1998-2010): Increasing the competitiveness of the agricultural sector Maximizing income through : Optimum utilization of resources Increasing agriculture contribution to national GDP Increasing income of producers
Productbased Approach
The AgroForestry Approach Aimed to tackle the problem of resource constraints(land & labour) and focuses on sustainable agricultural development Agriculture and forestry are viewed as mutually compatible and complementary Aimed to create a large production base for both sector
Is adopted to reinforce and complement the cluster-based agro-industrial development Identified in the 2nd Industrial Plan (19962005) i.e. processed (halal) food from livestock industry, juices and cocktails from fruits or salad dressing from oil palm
Stage 4 (2005-present)
Biotechnology National Policy (BNP) was launched in 2005
main focus - to capitalizing on the potential resource endowment in the country biotechnology to improve income and productivity of the sector
Increased Production
Increasing agricultural production including new sources of growth with greater private sector participation
POLICY THRUST
Expanding agro-based processing activities & product diversification
Increased self-sufficiency
Poverty eradication
Development of rural areas By promoting the agricultural sector, we are bringing development to rural areas thus reducing imbalance in urban-rural development especially in the less developed states. Land for agriculture use Increased food production
Agricultural area - 6.6 million ha (20% of total area in Malaysia in 2010, MOA, 2010)
The sector contributed not only as a supplier of raw materials to the resource-based industries, but also in term of food production (refer Figure 3) Malaysia aims to be centre/hub for halal food production
Increased self-sufficiency
- In the past, the country relied on other countries to meet a significant proportion of our food needs. - Lately, countries which have traditionally supplied us with food experienced growing population and are rapidly industrializing (eg Thailand, Vietnam, Indonesia). They may not be able to supply us food as much as before. - Furthermore, currently Malaysia is only self-sufficient in the production of eggs, poultry and fruits. - For food security reasons, we must try to increase selfsufficiency in other foods especially meet, rice and milk.
Employment
Export
Employment Agriculture was a major source of employment, providing over 50% in 1960s, declined to 11% in 2010
In 1960 60% 0f the total GDP. The share decreased to 22.9% in 1980, 18.7% in 1990, 8.4% in 2000 and decreased further to 7.6% in 2010
However, labour productivity improved reflected by the increase in value added per worker
From RM13,120 in 2000 to RM21,299 in 2010
due to the increased use of labour-saving technologies, thus causing labour shortage as local labour force moved into economic sector for higher wages; the beginning of mechanization in the sector and improved farm management
Export
Agricultural is an important foreign exchange earner.
From rubber products to oil palm products
Export earnings increased from RM 13.9b in 1985 to RM 35.4b in 1995 and RM134b in 2011 (DOS,2012). The major export earning comes from palm oil exports;
palm oil, palm kernel oil, palm kernel cake, oleo chemicals and finished products exceeded RM 6.3 billion in 1993 to RM 26b in 2010
23% of the total export in 2010 (9th MP)
Scale issue
Foreign workers
Due to lack of mechanization & automation to substitute for the out migration Leads to a massive inflow of foreign workers 2010 25% of total employment were foreigners Problem
25% were in agriculture sector 35% in mfc
unskilled workers unable to drive productivity increments Reduce the pressure of farmers to upgrade their technologies
Food security
A major concern of the government especially after 1997 financial crisis Def access by all people at any time to the food needed for a healthy safe (FAO, 1983) 3 main important reasons
The dependency of food imports could be reduced In 2010, the country needed to import
Beef (72%), Mutton (90%), Milk (95%), rice (10%)
Availability of safe & nutritionally adequate food both at the nat/household level Stability in the SS of foods at any time Everybody has accessed to sufficient food to met its needs
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
Due to changes in government policy, contribution of the sector have been decreasing in terms of GDP, employment and export This is however not due to the decreasing of total output but mainly due to a lower growth rate recorded
Despite the decline of agricultural contribution to GDP and employment, its continues to receive high priority in national development planning. Why?
Due to hard-core poverty in this sector remains significant. Poverty eradication encompasses an important issue in national development progress. The agricultural sector is seen to be necessary or very important in reducing the urban-rural disparity gap