National Agriculture Policy

Content

Agriculture Sector Background Current Scenario Challenges and Issues New Agricultures

Roles of Agriculture Sector in Malaysia

National food supplier Contribution of socio economic development for rural sectors Foreign exchange Supplier of raw material for agrobased industries

Land Usage in Agriculture Sector

24% of land usage is for agriculture (7.9 million hectare)

Rubber (1.8 million hectare) Oil Palm (4.2 million hectare) Coconut (0.2 million hectare) Paddy (0.6 million hectare) Fruit Orchard (0.2 million hectare)

22.87% is arable land (1,8 million hectare)

In 2005, Agriculture Sector

Contributed 8.3% to GDP (RM21.6 b)

37.2% from food sectors (RM8.0 b) (horticulture, fisheries and livestock) 62.8% from non-food sectors (RM13.6 b) (rubber, oil palm & forestry)

Employment/Labour Force (2005)

816,813 labour force is representative of 8% of the total labour force in Malaysia Entrepreneur - 431,067 (52.8%) Family Labour Force - 81,883 (10.0%) Labour Force - 303,813 (37.2%)

National Agriculture Sector Background

Since 1984, 3 consecutive National Agriculture Policy is adopted to develop and promote agriculture sectors. Focus on NAP 1 (1984-1991): To develop agriculture based on export oriented, such as rubber and oil palm. Focus:
Sufficient labour force Sustainable economic development Sufficient land resource for agriculture Primary commodities (rubber/ oil palm/ cocoa) Improve infrastructure

National Agriculture Sector Background

Focus on NAP 2 (1991 1997):
To increase productivity: efficiency & competitiveness To increase plantation acreage of oil palm (estate plantation) Development of agro-based industries

Structure Change (1992 1998)

Economy Shortage of labour forces Increase of labour cost Utilization of resources usage (land, water, capital and labour) Financial and economic crisis Inflation Globalization & Liberalization Implementation of WTO, APEC, AFTA (rules and regulation) High import bills

National Agriculture Policy 3 (NAP3) 1996-2010

Focus:
To increase competitiveness of agriculture sectors (in terms of cost & quality) Optimization usage of resources in agricultural sector (land, labour, capital and machine)

Specific Objective of NAP3

Food security program Increase of productivity & competitiveness in agriculture sector Establish synergy with the other sectors (services & industrial) New era of development in agriculture sectors Sustainable of environment

Challenges and Issues

1. Arable Land & Seed Resource

Uneconomic size of farm 65% paddy farmers own less than 1 hectare farm Competitiveness of land usage with other sectors 6.36m of land usage: 83% is under estate categories Imported seed (2005) Vegetables (RM 4.3 m) Fruits (RM 3 m) Fries (RM 453,600) Livestock (RM 21.4 m)

2. Labour Force
Aging Farmers
Above >55 years old (59.8% / 192,791 people)

Not full-time farmers

Paddy farmers: 27 days/season Cash-crop: 15 days/month

Shortage of labour force

88,952 Foreign workers

Less involvement of young generation in agricultural sectors

Farmers <39 years old (16.1%/69,000 people

Unskilled labour

3. Less involvement from private sectors.

Public perception on agricultural sector is less profitable venture. Low productivity of agricultural sectors High risk Difficulty of getting loan facility

4. Globalization/ liberalization in trade (WTO, APEC & AFTA)

To increase productivity & competitiveness in agricultural products. Sustainability use of resources.

5. Balance of Trade

High price for imported agricultural inputs Increase deficit balance of trade (food item)

6. Food Safety

Standardization of quality. Certification of quality Certification of safety Traceability GAP, GMP, GDP, HACCP,GFSI National Branding

7. Collaboration

Local collaboration (players farmers, transporter, traders, manufacturer, exporter, retailer, consumer, R&D institutions, government and private sector) International collaboration (EU Market, middle East, Japan, China, Australia, US Authority and International Trade Bodies.

Balance of Trade (RM billion)

Food Trade
Import 11.4 12.2 12.4 12.7 16.6 17.8 9.5 27.4

Year Export 2000 6.4 2001 6.5 2002 7.4 2003 8.3 2004 9.9 2005 10.6 2006(Jun) 5.4 2010 14.9

Balance -5.0 -5.7 -5.0 -4.4 -6.7 -7.2 -4.1 -12.4

Import Export of Food Item 2005

Commodity Group Livestock Meat Dairy and eggs Fish, crustacean, mollusk Export (RM Import (RM Balance (RM million) million) million) 416.4 86.5 622.5 2,248.9 156.6 1,048.3 1,729.5 1,902.2 259.8 961.8 1,107.0 346.7

Cereal
Vegetable Fruits Sugar and honey Cocoa, coffee, tea, spices Feed Others Total

912.6
504.5 467.3 467.0 2,449.3 543.0 1,926.3 10.6 b

2,255.9
1,654.6 708.8 1,339.6 2,307.8 2,887.1 1,802.5 17.8 b

1,343.3
1,150.1 241.5 872.6 141.5 2,344.1 123.8 7.2 b

National Agriculture Agenda

Agriculture sector as a third engine of growth in 9th plan. (the 1st and 2nd engines are services and manufacturing)

MOA Inc. Approaches

Coordinated approaches from all departments and agencies under Ministry of Agriculture.
Pro-business Professional Customer driven

Effective and efficiency of delivering system.

Coordination in expertise, effort and resources for improvement in delivering system.

The New Agriculture

The 9th Malaysian Plan ( RMK9 ) ( 2006-2010 )

National Mission
First Thrust
To move up the economy of value chain. To strengthen Agriculture and Agro based industry.

Agriculture and Agro based Industry

Increase Agriculture Production (New Development areas/commodities) and increase in involvement of private sectors. Expand Agro based industry activities Strengthen Marketing and Global Networking. Increase income of farmers and fisherman. Improvement of Services Delivery System.

Transformation Agriculture Sector

Modern, dynamic and competitiveness. Agriculture is Business.

The New Agriculture

9th Malaysian Plan

Focus Commercialization driven

Merging of the small estate New land development Integrated land development Zone industry of aquaculture Agriculture zone National Feedlot Centre

9th Malaysian Plan

New Agriculture

Focus

More Advance Technology Mechanization and automation of estate. Water resource Good agriculture practices Automation and mechanization for fisheries industries

th 9

Malaysian Plan
New Agriculture

Focus
High quality and value added along the supply chain management,

Herbal industry Tuna industry Halal products Landscape and nurseries Processed products, branding, packaging, labeling, advertising and promotion.

9th Malaysian Plan

New Agriculture

Focus Biotechnology Good seed, fry and livestock. Good agriculture practices Fustigation

9th Malaysian Plan

New Agriculture

Focus Skilled Labour Capacity building in agriculture

9th Malaysian Plan

New Agriculture

Focus Usage of ICT and market intelligence

Improve accessibility of market information for the target group Market information system

9th Malaysian Plan

New Agriculture

Focus Involvement of Entrepreneurs

Increase in agriculture entrepreneurs Extension on agro based industries Credit facilities and technical assistance

Paddy industries

Water drainage development Development of paddy estate (10 ton) Paddy Agro based industries High quality paddy seeds Good farm infrastructure (paddy area)

Fisheries Industries

Improvement of fish landing port Research on fisheries development Improvement on the marketing of fish agro based products

Crop Industries

Development of TKPM (Tanaman Kekal Pertanian Makanan) Development of Contract Farming and Contract Marketing Improve distribution of market information to the target group (SDVI) High quality seed Market driven approach Crop protection Enhance agro based industries

Livestock Industries

National Feedlot Centre (NFC) Modern and commercial driven Explore local and overseas market Import substitution (dairy, meat) Enhance the upstream and downstream activities Improve R&D in production Disease control

Agro based Industries

Creating 10,000 new entrepreneurs Market driven GAP, GMP, GDP, HACCP, GFSI (Quality standard requirement) Enhance packaging and branding Enhance Advertising and Promotion Improve entrepreneurship and financial management Global players

1. Production
Sector Agro Food Paddy Fisheries Livestock Meat 28.5 45.0 10.2 9.6 Value(000 ton) 2005 9,258 2,400 1,575 2010 12,807 3,202 2,071 Annual Growth(%) RMK8 4.9 2.3 1.6 RMK9 6.8 5.9 5.6

Mutton
Pork Bird Eggs Dairy Flower Fruit Vegetable

1.5
209.0 980.1 443 41.1 126.4 1586.9 771.3

2.3
241.0 1,295 600 68.4 147.3 2555.7 1133.3

10.8
5.5 6.5 2.1 6.9 1.0 9.8 13.8

8.9
2.9 5.7 6.3 10.7 3.1 10.0 8.0

2. Self Sufficiency
Commodities Paddy Fruit 2000 70 94 2005 72 117 2010 90 138

Vegetable
Fish Meat Mutton Bird

95
86 15 6 113

74
91 23 8 121

108
104 28 10 122

Pork
Eggs Dairy

100
116 3

107
113 5

132
115 5

3. Import & Export

Sector Import Livestock & Meat Dairy Vegetable Fruit Cereal & Sugar Fish Feed Others Total 1,204.9 1,729.5 1,654.6 708.8 3,595.5 1,902.2 2,887.1 4,110.3 17,792.1 2005 (RM Million) Export 502.9 622.5 504.5 467.3 1,379.6 2,246.9 543.0 4,375.6 10,644.3 BOT (702.0) (1,107.0) (1,150.1) (241.5) (2,215.9) 346.7 (2,344.1) 285.3 (7,148.6) 2010 (RM Million) Import 1,389.0 1,533.0 670.0 812.0 2,680.8 841.0 4303.0 2,048.0 Export 3,362.0 520.0 614.0 2,153.2 1,051.1 4,624.7 531.0 2,645.0 BOT 1,973.0 (1,013) (56.0) 1,341.1 (1,629) 3,783.7 (3,772) 597.0

14,276.9 15,501.0 1,224.1

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