Overview of Agriculture Sector in Malaysia 1230823436347415 1

SARAWAK

SABAH

PENINSULAR

Map of MalaysiaMap of Malaysia

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

Scenario of Malaysian Scenario of Malaysian Agriculture Agriculture

Agriculture sector in Malaysia is Agriculture sector in Malaysia is divided into :-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

(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

Agriculture sector in Malaysia is Agriculture sector in Malaysia is divided into :-divided into :-

Farmers’ ProfileFarmers’ ProfileTotal Number of Farmers : approximately 1 million *

Paddy : + 400,000

Horticultural crop : + 200,000 (Fruits, vegetables, floriculture)

Industrial Crops : + 750,000 (Rubber, oil palm)

Other Crops : + 50,000

* Some farmers are involved in more than 1 crop

LABOR FORCE IN AGRICULTURE (1998-2004)

INDUSTRY 1998 2000 2001 2002 2003 2004

PADI PLANTERS

302,852

314,158

320,587

297,227

268,542

320,022

FARMERS 311,979

301,035

284,637

239,517

245,976

248,260

LIVESTOCK FARMERS

43,222

41,263

36,790

35,870

34,005

79,665

FISHERMEN

115,901

125,353

136,610

104,309

102,933

132,712

AQUACULTURE

8,966 9,134 8,528 3,346

4,067 9,694

SMALL HOLDINGS

387,982

353,828

290,146

304,990

337,792

442,486

TOTAL 1,170,902

1,144,771

1,077,298

985,259

993,315

1,232,839

Farmers’ ProfileFarmers’ Profile

< 45 years old< 45 years old :: 30%30%

45-55 years old :45-55 years old : 25 %25 %

> 55 years old> 55 years old :: 45%45%

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

YEAR

PLANTATION SECTOR

(%)

FOOD SECTOR

(%)

1995

9.6 3.6

2003

5.2 3.3

2004

6.1 2.9

• GDPGDPNational= USD 133.8 million National= USD 133.8 million Agriculture= USD 11.6 million Agriculture= USD 11.6 million (8.7%)(8.7%)

• TradeTradeExportExport ImportImport

NationalNational USD 144.3 millonUSD 144.3 millon USD USD 117.3 million117.3 millionAgricultureAgriculture USD 16.3 million (11%)USD 16.3 million (11%) USD 8.8 USD 8.8 million (7.5%)million (7.5%)Agro-foodAgro-food USD 2.7 million (1.9%)USD 2.7 million (1.9%) USD 4.8 USD 4.8 milion (4.1%)milion (4.1%)

• Labor ForceLabor ForceNational = 10.5 million personNational = 10.5 million personAgriculture = 1.5 million (14.6%)Agriculture = 1.5 million (14.6%)

Food Subsector

• Crop• Livestock• Fisheries

Industrial Commodities

• Palm Oil• Rubber• Cocoa

• Wood & Timber• Pepper

MINISTRY OF AGRICULTURE MINISTRY OF AGRICULTURE & AGRO-BASED INDUSTRY& AGRO-BASED INDUSTRY

MINISTRY OF PRIMARY MINISTRY OF PRIMARY INDUSTRY & COMMODITIESINDUSTRY & COMMODITIES

MINISTRY OF AGRICULTURE AND AGRO-BASED INDUSTRY

DEPARTMENT OF AGRICULTURE

MALAYSIAN AGRI. MALAYSIAN AGRI. RESEARCH & RESEARCH &

DEVELOPMENT DEVELOPMENT INSTITUTEINSTITUTE(MARDI)(MARDI)

FEDERAL AGRI. FEDERAL AGRI. MARKETING MARKETING AUTHORITY AUTHORITY

(FAMA)(FAMA)

MUDA AGRI. MUDA AGRI. DEVELOPMENT DEVELOPMENT

AUTHORITY (MADA)AUTHORITY (MADA)

KEMUBU AGRI. KEMUBU AGRI. DEVELOPMENT DEVELOPMENT

AUTHORITY (KADA)AUTHORITY (KADA)

DEPARTMENT OF DEPARTMENT OF VETERINARYVETERINARY

SERVICESSERVICES

DEPARTMENT DEPARTMENT OF FISHERIESOF FISHERIES

MALAYSIA MALAYSIA AGRICULTURE AGRICULTURE BANK (BPM) BANK (BPM)

FARMERS’ FARMERS’ ORGANIZATION ORGANIZATION

AUTHORITY (FOA)AUTHORITY (FOA)

MALAYSIAN FISHERY MALAYSIAN FISHERY DEVELOPMENT DEVELOPMENT BOARD (LKIM)BOARD (LKIM)

MALAYSIAN MALAYSIAN PINEAPPLE PINEAPPLE INDUSTRY INDUSTRY

DEVELOPMENT DEVELOPMENT BOARD (MPIB)BOARD (MPIB)

NATIONANATIONAL L

AGRICULAGRICULTURE TURE

POLICYPOLICY

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

Abundant land & adequate manpower

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

• Emphasis of NAP 2 (1992-1997): ♦ Increasing productivity, efficiency

& competitiveness♦ Increasing land areas for palm oil

(plantation crop)♦Development of agro-based

industry


Greater focus on issues of productivity, efficiency & competitiveness

Addressing the linkages with other economy sector

2nd National Agriculture Policy (1992-1998)

Shifted from new area development to in-situ development

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

•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


Further development of agro-food 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

3rd National Agriculture Policy (1998-2010)

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

99thth MP MP(2006-(2006-2010)2010)

TARGETSTARGETS

To Increased To Increased Value AddedValue Added

Increased Increased ProductionProduction

To Contain To Contain Import BillImport Bill

Increase Self- Increase Self- Sufficiency Sufficiency

LevelLevel

Increasing agricultural Increasing agricultural production including production including

new sources of growth new sources of growth with greater private with greater private sector participationsector participation

Improving the Improving the service delivery service delivery

systemsystem POLICY POLICY THRUSTTHRUST

Expanding agro-Expanding agro-based processing based processing

activities & product activities & product diversificationdiversification

Strengthening Strengthening marketing and global marketing and global

networkingnetworking

Enhancing incomes Enhancing incomes of smallholders, of smallholders,

farmers and farmers and fishermenfishermen

DEVELOPMENT OF NATIONAL AGRICULTURAL SECTOR

(ISSUES & CHALLENGES)

ISSUES

INDUSTRY RESOURCE

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

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

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

Inadequate labor force: 19,343 foreign workers brought in for period 2001-2003

PRIVATE SECTOR

Agricultural is perceived as a poor man’s sector & profile not comparable with other sectors

Low productivity of the sector• 60% lesser than productivity in the

manufacturing sector• Need to enhance productivity

OVERSEAS

Trade liberalization: WTO, APEC & AFTA* Need to enhance competitiveness of

agricultural products

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 agricultural sector

Strengthening the development of industry in agriculture and

of industry in agriculture and to encourage private sector

investment

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 TRANSFORMING THE AGRI-FOOD SECTOR IN NEW ERASECTOR IN NEW ERA

Transformation of agriculture and agro-based industry as a sector which is :

Modern,

Dynamic, and

Competitive

Scope of Transformation

Current situation After transformation

Farm size: - small Large scale, commercial & economic - uneconomic

Labor force: - limited Mechanization, automation & technology - ageing Less labor intensive activities

Farm management:Professional, agriculture is business, - traditional Application of ICT, - “satisfactory” Commercial management/ - “enough” collective/economic of scale, - manual Business Plan

Scope of Transformation

Current situation After transformation

Less/ not competitive:- Low product quality Standard, certification & - non-standard quality export quality

- product dumping - price factor

Return on Investment - Low Diversified returns: - time consuming mixed farming, intercropping

value-added

TRANSFORMATION

Transformation of Traditional Farmers Sectoral Transformation

- Land/farm size - Development based on zoning/ cluster- Application of technology - Private sector investment- Mechanization - Investment incentives- Productivity - Implementation of Good Agricultural - Supply-demand matching Practices Program (GAP)- Marketing- Farmer Cooperation- Diversity of economic activity- Modernization

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 (in-group)

• Amalgamation of farms towards creating commercial farm size (sizeable estates)

• Introducing systematic & modern farming practices

• Practicing standard manual- (technology package, business plan & centralized management)


Application of technology :• Research & Development

based on current needs• Commercialization &

transfer of technology (TOT)

• Extension programs on technology & training

• On-site training


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


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


Transforming of National Fisherman’s

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


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

C

DEPARTMENT OF VETERINARYSERVICES, MALAYSIA

EST. NO. : …....

Livestock Accreditation Scheme(Skim Amalan Ladang Ternakan or SALT)

LOGOVETERINARY HEALTH MARK

(VHM)

(Veterinary Health Mark or VHM) – Processed products


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


Diversification of economic activity• Integration of cattle in palm

oil plantation

• Intercropping

• Mixed farming

• Processing activities


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• Contract FarmingMajor Programs for Fishermen•Fund for Fishermen•Transformation of National

Fisherman’s 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 MFZ 1

(Mixed Fruit Zone 1)

Sub Zon

MFZ 1

(a)

Sub Zon

MFZ 1

(b)

Sub Zon

MFZ 1

(c)

Belimbing

Limau

Roselle

Tembikai

Belimbing

Mangga

Nangka

Limau

Nangka,

Mangga,

Jambu

Batu

Kota

Tinggi,

Johor

Bahru,

Kluang, Mersing,

Rompin

Segamat

Tampin

Jempol

Bera

Temerloh

Maran

K. Lipis

Bentong

Raub

Jerantut

ZON MFZ 2


Sub Zon

MFZ 2

(a)

Sub Zon

MFZ 2

(b)

Sub Zon

MFZ 2

(c)

Betik

Limau

Mangga

Betik,

Jambu

Batu,

Roselle

Mangga

Belimbing,

Nanas,

Jambu

Batu

Kuala

Kangsar,

Larut Matang,

Hulu Perak

Batang Padang,

Kinta,

Perak

Tengah,

Manjung,

Hilir Perak

Hulu

Selangor,

Gombak,

H. Langat,

Petaling,

Klang,

WP,

Seremban

ZON MFZ 3


Sub Zon

MFZ 3 (a)

Sub Zon

MFZ 3 (b)

Sub Zon

MFZ 3 (c)

Limau Tembikai

Roselle

Nanas

Limau

Tembikai

Kemaman

Dungun,

Hulu

Terengganu

Marang,

Kuala

Terengganu, Setiu,

Besut,

Pasir Putih, Bachok, Kota Banru, Tumpat

Pasir Mas,

Tanah Merah,

Macang,

Jeli, Kuala

Kerai, Gua

Musang

ZON MZ 1

(Mango Zone 1)

Sub Zon

MZ 1

(a)

Sub Zon

MZ 1

(b)

Mangga

Tembikai

Mangga,

Nanas,

Jambu

Batu

Alor Gajah, Jasin, Melaka

Tengah,

Rembau

Muar

ZON MZ 2

(Mango Zone 2)

Sub Zon

MZ 2 (a)

Sub Zon

MZ 2 (b)

Mangga

Tembikai

Limau

Nangka

Mangga,

Nanas,

Jambu

Batu

Perlis,

Langkawi,

Kbg Pasu,

Padang

Terap, Pokok Sena, Kota Setar,

Pendang

K. Muda,

Sik, Baling,

Kulim,

Bandar Baru,

SPU,SPTSPS,

T/Laut,

B/Daya

ZON PZ 1

(Pineapple Zone 1)

Sub Zon

PZ 1 (a)

Sub Zon

PZ 1 (b)

Nanas Nanas, Pisang

Pontian Batu Pahat

ZON PZ 2

(Pineapple Zone 2)

Sub Zon PZ 2 (a) - Peat

Sub Zon PZ 2 (b) - BRIS

Nanas Nanas, Roselle

Kuantan, Pekan

Kuantan, Pekan

CROP ZONING CROP ZONING

• PAPAYAPAPAYA• STAR FRUITSTAR FRUIT• PINEAPPLEPINEAPPLE• MELONMELON• GUAVAGUAVA

• JACKFRUITJACKFRUIT• BANANABANANA• CITRUSCITRUS• MANGOMANGO

Potential Fruit CropsPotential Fruit Crops

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

MALAYSIA’S SUCCESS IN FRUIT TRADEMALAYSIA’S SUCCESS IN FRUIT TRADE


Zoning/Cluster based development supported with activities, such as :• Good Agricultural Practice

Certification, Accreditation Schemes & Malaysia’s Best standardisation, commercialisation & transfer of technology

• Skilled training• Supply – demand matching• Sustainable agricultural

development• Pest/disease control


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


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 TransformationSupply 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

ConsumersConsumersDistributorsDistributorsFarmersFarmers Dist/collection

centreDist/collection

centre

Supermarket/Hypermarket/Retailers

Supermarket/Hypermarket/Retailers

ProcessorsProcessors

Processed products

S u

p p

l y

C h

a i n

Man

agem

ent

(SC

M)

Fresh produce

PPLPPL

BDC FAMAX/AgricX

Receiving orders FAMA

Receiving orders FAMA Input

procurementInput

procurement Farm management

Farm management Collection &

post harvestCollection & post harvestScheduled

plantingScheduled

planting DeliveryDelivery

• TESCO• Giant• Lifestyle• Carrefour• Billion• PizzaHut• Makro

INTEGRATED SUPPLY CHAIN

(DC)•Chui Chak•Selayang•Puchong•Tangkak•Bkt. Mertajam •Melaka•Johor Bahru

DC

www.agribazaar.com.mywww.agribazaar.com.my

Thankyou

Documents

Overview of Agriculture Sector in Malaysia 1230823436347415 1