CHAPTER 8

AGRICULTURE & MALAYSIAN ECONOMY

1) Policies

 National Agricultural Policy 1nn

 National Agricultural Policy 2nn

 National Agricultural Policy 3nn

 National Agrofood Policynn

2) Good Agriculture Practices

Methods of farming that follow the standards/regulations

which result to safe & quality food and non-food

agricultural products.

3) Organic farming

conventional

a) apply chemical fertilizer to promote plant growth

organic

a) apply natural fertilize such as manure compost to need soil and plant

conventional

b) soray synthetic insenticides to reduce pests snd desease

organic

b)spray posticides from natural source.use benefiticial insectd and birdss.

mating disruption traps to reduce pests and disease.

conventional

c) use synthetic horbicious to manage weeds

organic

c) use environmantlly generated plant killing cmpounds,rotate crops till hands wood or much to manage weeds.

 Organic farming

4) New agricultural sectors:

 Fisheries involving deep sea fishing activitiesnn

have commenced, with new fishing harbours in

Penang and Sarawak opened.

 Aquaculture activities in inland water bodiesnn

have increased with cultivation of commercial

species. Mariculture has also expanded in

islands such as Langkawi. Recreational fisheries

and aquariums are new business ventures.

Agriculture is part of the primary sector in the Malaysian economy which contributes to the gross domestic product (GDP) over time.
 The relative importance of the primary sector to the GDP has decreased since 1965 from 31% to 9% of GDP.







Agriculture in Malaysia is characterized by a dualistic system where the plantation sector exists side by side with the smallholder sector.
Plantation or estate agriculture is normally single crop cultivation in a land area of more than 40 ha
.
Crops such as:

·         Rubber

·         Oil Palm

·         Coconuts

·         Cocoa

·         Pineapples

·         Tea

The plantation management is more systematic, using modern technology and hired labour.
The smallholders cultivate small areas between 0.4 - 4 ha. Consequently, production capacity is low due to the limited technology and disorganized farm management practices.
There are two types of smallholders:
(1) The subsistence farmers who cultivate their land for own consumption and sell the products in the marketplace or to the middleman.
      - These farmers usually practise mixed cropping systems where vegetables and fruit trees are the main crops being cutivated.
      - Others have mixed cropping and livestock farming systems whereby the farmers grow cash crops and fruit trees at the same time raising chicken, goats or cows on their farm.
(2) Those that practice monocropping type of subsistence farming.
      - These farmers cultivate their land with commodity crops such as rubber, cocoa or oil palm similar to those planted by the plantations.
Agriculture has expanded into secondary downstream for value added products. Malaysia's agricultural development is guided by the National Agricultural Policy (NAP). The development programmes are aimed at expanding food production to improve the food trade balance, increasing export of primary commodities and ensuring supply of raw materials for local downstream industries.
Agricultural Growth

·         In the 7th Malaysia Plan (1995-2000), the agricultural sector grew at 1.2% per annum, lower than the targeted 1.9%.

·         The 8th Malaysia Plan (2001-2005) targets the sector to grow at 3.0% annually.

·         However, the agriculture sector grew only at 1.5% per annum.

·         Among commodities, from 1995 to 2005, the value of rubber and forestry products has decreased while that of palm oil, livestock and fisheries has increased.

·         In 2005, industrial crop production accounted for 60% of the total value in agriculture with the remaining 40% taken by the food sector, with livestock and fisheries accounted for significant increases.

Commodity	1990	1995	2000	2005	2010
Oil Palm	1,518	1,943	1,674	2,261	2,877
Forestry &Logging	661	536	873	862	789
Rubber	584	499	534	647	730
Cocoa	351	234	71	24	39
Fisherie	438	571	712	683	1,107
Livestock	173	239	434	597	709
Rice	171	190	169	181	282
Other agriculture*	340	475	865	914	1,329

Other agriculture: Include coconut, vegetables, fruits, tobacco and pepper Arshad et al. (2008)
Table 1     Agricultural value of major commmodities (USD million)


Food Commodities

·         The implementation of the third National Agricultural Policy (NAP3) to meet the national food requirements as well as broaden the export capicity of the agriculture sector have positive impacts on food production. 

·         The self-sufficientcy levels (SSL) for food commodities except rice have improved (Table 2).

Commodity	2000	2005	2007	2010
Rice	70	72	72	86
Fruits	94	117	105	106
Vegetables	95	74	89	91
Fisheries	86	91	97	103
Beef	15	23	25	28
Mutton	6	8	9	10
Pooultry	113	121	121	122
Eggs	116	113	114	115
Pork	100	107	116	132

Table 2      Self-sufficiency level (%) of food commodities

·         The impressive growth in livestock production is mainly attributed to the improvement in animal husbandry and the shifting from traditional to commercial farming practices especially in the non-ruminant subsector. 

·         Increase in feedlot and expansion of integated beef cattle farming in rubber and oil palm plantations have contributed to the increase beef production.

·         However, Malaysia is still not self-sufficient in the production of beef amd mutton, with local production catering 28% and 10%, respectively.

·         Poultry production increase is due to the integrated poultry farming system introduced by fast-food chains such as Kentucky Fried Chicken.

·         Poultry is the most popular meat consumed due to pricing and religious acceptability.

·         The per capita consumption of fruits and vegetables has increased from 40 in 1985 to 65 kg and 42 to 64 kg in 2005, respectively. 

·         The production growth is due to governments effort in consolidating small orchards into larger organized farms and instituting group farming projects.

8.2       INTERNATIONAL TRADE IN AGRICULTURE
v  The agricultural sector contributes significantly to the country in earning foreign exchange through export.
v  Malaysian is still a food-deficit country. Food import have continuously far exceeded export.
v  Among the major import items included maize, sugar, wheat, rice, soybean, and various food preparation.
v  The major food items that have a large balance of trade deficit are livestock feed, cereals (mainly rice), vegetable and dairy products.
v  Raw rubber, palm oil and cocoa beans are imported, processed, and then re-exported as final products.
v  Balance of trade of agricultural products and commodities 2005 (RM million)
-          The total agricultural sector in export 62,596, in import 36,250, and the balance is 26,346
-          The total of food items in export 10,669, in import 17,733 and in become negative in balance which is -7,065.
8.3       AGRICULTURAL EMPLOYMENT
Ø  Currently the agriculture sector accounts for about 12% of total employment in the country from a high of 42% in the 1980, reflecting the transformation from an agricultural to an industrialized economy.
Ø  The number of people employed in the agriculture sector in 2010 is 1.51 million out of a total force of 11.3 million.
Ø  About 80% of the labour in agriculture is employed in crop production while only 9% are in livestock production and 6% are in fisheries.
Ø  The biggest number of farmers in Malaysia is rice growers (239,000 in 2005).
Ø  The total number of smallholders in 2005 was 414,000.BlogThis!Share to TwitterShare to FaSustainable Agriculture. 6.3 Concept of Sustainable Agriculture
Sustainable systems share a vision of farming with nature, an agro-ecology that :

·         Promotes biodiversity

·         Recycles plant nutrients

·         Protect soil from erosion

·         Conserves and protects water

·         Uses minimum tillage

·         Integrates crop and livestock 

However, no agriculture is sustainable if it is not also profitable, able to provide a healthy family income and a good quality of life.  Therefore, sustainable practices lend themselves to smaller and family-scale farms.  These farms, in turn, tend to find their best niches in local markets, within local food systems, often selling directly to consumers.
Sustainable agriculture  (Farming Sustainably) : Means growing crops and livestock in ways that
                                                                              requires a whole-system approach whose overall
                                                                              goals is the continuing health of the land and people.
Three objectives which a farm or rural community practicing sustainability has to fulfill  :
1)  Economic Development
2)  Environmental Conservation
3)  Socio-political Benefits.
1) Economic Development
- Economic profit has to be made through proper production procedures, processing and marketing which requires selecting profitable enterprises, sound financial planning, proactive marketing, risk control and good overall management.
- Mixed cropping could offer another economic advantage compared with single cropping.
- Integrating plant and animal production can distribute overhead cost and risk among several enterprises.
- Other enterprises which could be explored are contract farming of seeds of vegetables, rice, or specialty crops which involves only small hectareage and organic farming.
- There must be a comprehensive financial planning in an enterprise.
- Market research is essential for big enterprises to understand the market by analysing competition, consumer trends and prices.
- Specialty and direct markets such as organic, GMO-free, and other "green" markets may yield more income but require more marketing by the producer.
Characteristics that involved in economic development are:
A) Net financial worth of the family increase consistently through savings.
B) Family debt decreases.
C) Less reliance on government subsidies.
D) Farm enterprise reaps profits year after year.
E) External purchase of feed and fertilizer decreases.