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Chapter 2:
Changing patterns in
plantations
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Introduction
• Government intervention in agriculture and in plantations is pervasive in most
countries.
• The rationale for such intervention rests primarily in climatic variability and
price uncertainty, two factors which prompt governments to compensate for
market inefficiency.
• These sweeping changes have affected plantation estates and commodity
markets in three major ways: in ownership of production units, in commodity
marketing institutions, and in forms of production.
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Definition of privatization
Privatization refers to the sale of state-owned enterprises to the
private sector.
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FELDA
• The winds of privatization are not sparing the rest of Asia.
Even in Malaysia the relatively successful Federal Land
Development Authority (FELDA), which has been instrumental
in providing jobs and social services in rural areas, is faced
with a possible private sector option.

• Low commodity prices and a shortage of new agricultural

land are forcing a reassessment of FELDA's role.

• Private plantation estates are to grow by some 470,000

hectares over the plan period, six times the growth projected
of public estates.
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Factors of privatization
a) Privatization procedure, in terms of the nature of privatization
b) degree of transparency

Finally, privatization does not call for less state involvement, but for a
different kind of intervention, less in production and more in the
accompanying legal environment, infrastructural investments and training
programmes which can make private enterprise successful.
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Changing forms of commodity

marketing
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Cont..
• A major focus of the structural reform package adopted in many countries has
been the agricultural commodity marketing system, particularly for export crops.

• Main Functions of marketing boards>>> to regulate international

price movements while paying a fixed price to producers.

• Additional functions>>>>> including input supply,

distribution of subsidies and credit, as well as extension and research services
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Cont..
• Privatization of marketing boards figures prominently on the
reform options:

• 1) In most cases subsidies on inputs have been eliminated,

2)input supply has been opened to the private sector,
• 3) credit functions have been handed over to the banking
system,
• 4) domestic marketing has been liberalized with private,
• 5) public and cooperative traders competing alongside each
other, while
• 6) governments have often retained producer price-setting
responsibility.
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Changing forms of
production
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Cont…
3 main headings in changing forms of production:
• cooperative forms of production,
• contract farming
• Internationalization or globalization of agricultural commodity production.
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Cont…
• Contract Farming
• Contractual arrangement between one or several farmers (small or large) and a firm, specifying
conditions of production and marketing of an agricultural commodity.

• Contract farming combines some of the features of smallholder production (flexibility, incentives
and equity) with those of the plantation system (close control of production and quality).

• specify the type of crop and the conditions under which it is to be grown, the quantities to be sold
at what period and at what price, and provision of technical inputs by the purchasing company.

• Combines 3 distinct characteristics:

a) futures market for a specified commodity
b) commitment to purchase against the delivery of some inputs and technical advice
c) sharing of the product and/or price risk according to the nature of the contract
PLANT BIOTECHNOLOGY
Benefits of Agricultural Biotechnology
• Increase production yields, thereby reducing pressures to force
more land, often marginal and highly erodible land, into
production.
• Using biotech greatly reduces on-farm energy consumption
and associated environmental impacts
• Concentrated animal agriculture operations via biotechnology-
improved feed products and biotech nutritional supplements
for livestock.
• It helps produce crops and raise animals without relying on
toxic chemical pesticides, synthetic fertilizer, genetically
modified seeds that degrade soil, water or other natural
resources.