Transcript No Slide Title

THIRD COUNTRY TRAINING ON AGRICULTURAL
FINANCE
15-28 February 2004, Hanoi, Vietnam
CURRENT SITUATION OF
AGRICULTURE IN MALAYSIA
Prepared by:
Ng Tak Wa
Bank Pertanian Malaysia
February 2004
Contents
1.
2.
3.
4.
5.
6.
Importance of the Agricultural Sector
History of Agricultural Development
National Agricultural Policies
Agricultural Commodities
Agricultural Institutions
Poverty Eradication
PART I
IMPORTANCE OF
THE AGRICULTURAL SECTOR
Overall Statistics
• Population (2003): 25.32 million
• Land area: 330,252 square kilometers
• Employment (‘000):
Labor force
Employment
Unemployed
Unemployment rate
2002
9886.2
9542.6
343.5
3.5%
2003
10337.6
9986.6
351.0
3.4%
Importance of Agricultural Sector
Main contributor to the national economy in
1960’s to 1980’s.
This sector laid the foundation & was the
driving force behind the economic growth of
the country which progressively led to the
transformation of the economy towards
industrialization.
Strategically important as a provider of food.
Vital source of raw materials for the agro &
resource-based industrial development.
GDP Growth By Sectors (%)
Item
GDP
Agriculture
Mining & Quarrying
Manufacturing
Contruction
Services
2000
8.3
2.0
1.9
19.1
1.0
5.7
2001
0.4
1.8
1.6
-6.2
2.3
5.7
2002
4.1
3.0
3.7
4.0
2.3
4.1
2003P
4.5
2.3
4.5
6.5
2.5
4.2
Share of Agriculture to GDP,
1985 - 2003
Year
1985
Value-Added Share of Agriculture
RM million
to GDP (% )
11,851
21.0
1990
1995
14,828
16,231
19.0
14.0
2000
2003P
17,840
18,869
13.0
8.2
GDP Contribution By Sectors,
2001 - 2003
Item
2001
2002
2003 *
RM million % RM million % RM million %
Agriculture, Livestock, Forestry and Fishing
18,269
8
18,438
8
18,869
8
Mining and Quarrying
15,892
7
15,826
7
16,545
7
63,536
7,159
118,763
28
3
53
65,908
7,275
124,939
28
3
54
70,225
7,461
130,187
29
3
54
Manufacturing
Construction
Services
Total
223,619 100
232,386 100
243,287 100
Employment in Agriculture
Year
Employment
('000)
% of Total
Employment
1980
1985
1,800
1,796
37.2
31.3
1990
1995
1,738
1,524
26.0
19.0
2000
1,407
15.0
2001
1,406
14.7
2002
1,406
14.3
2003
2005
2010
1,403
1,200
980
13.8
11.9
8.8
Share of Agricultural Exports
Item
1985
1990
1995
2002
Total Values of
Agricultural Exports (RM mil) 13,937.7 22,283.7 35,427.4 43,488.9
% of Total Exports
36.7
28.0
19.2
12.3
PART II
HISTORY OF
AGRICULTURAL DEVELOPMENT
IN MALAYSIA
Agricultural Development in Malaysia
1960’s & 1970’s
Agriculture was the main pillar of the
Malaysian economy in the 1960’s.
Average growth rate of 8.5% per annum.
Rubber, palm oil, saw logs & pepper accounted
for 42.0% of agriculture sector production.
Expansionary policies on paddy and export
crops (rubber, oil palm & cocoa).
 Development of new lands and in situ
development.
Agricultural Development in Malaysia
1980’s
Average growth rate recorded during this
period was 1.3 per cent per annum.
Growth came mostly from the increase in
outputs of palm oil, cocoa & sawlogs.
Malaysia experienced rapid expansion in
the manufacturing sector and this altered
the relative importance of the agricultural
sector.
Agricultural Development in Malaysia
1980’s (continue)
During this period, Malaysia continued to
focus on new land development &
consolidation of uneconomic farm size
through in-situ development.
Agricultural Development in Malaysia
1990’s
Average growth rate between 1990-1995 of
1.40 per cent per annum.
Palm oil sub-sector accounted for over
40.0% of overall value-added.
Rubber, cocoa & saw logs experienced
negative growth.
Greater emphasis was given to address
productivity, efficiency & competitiveness
issues facing the agricultural sector.
PART III
NATIONAL
AGRICULTURAL
POLICIES
National Agricultural Policy (NAP)
Agricultural development since
independence has been guided by the
National Agricultural Policies (NAP).
 NAP 1 (1984 – 1991)
 NAP 2 (1992 – 2010)
 NAP 3 (1998 – 2010)
NAP 1 (1984 – 1991)
Aimed at maximizing income from agriculture
through effective and efficient utilization of
resources and the revitalization of the sector’s
contribution to the national economy.
 Pursued expansionary policies on export
crops, in particular oil palm and cocoa.
 In–situ development to resolve the problems of
uneconomic farm size, non-remunerative crops
and low productivity especially among
smallholders.

NAP 1 (1984 – 1991)
• In-situ development involves replanting,
rehabilitating and consolidating activities on
existing agricultural areas that are faced with
problems of poverty and low productivity.
• Land consolidation is aimed at consolidating
and enlarging fragmented and uneconomic
holdings.
NAP 2 (1992 – 2010)
 The
policy outlines strategies for
expanding food production, greater
role of the private sector, marketing
reform and accelerated agro-based
industrial development.
NAP 3 (1998 – 2010)
Address the new developments during the
1992 – 97 period that posed new issues &
challenges :Establishment of WTO and rapid liberation
of agricultural trade.
 Financial crisis.
 High imports of food.
 Growing concerns for sustainable
development & environmental protection.

NAP 3 (1998 – 2010)
Objectives : To increase food production and
stabilize food prices.
 To maximize income through the
optimum use of resources.
 To increase productivity &
competitiveness of the agricultural
sector.
 To reduce trade deficit in food.
NAP 3 (1998 – 2010)
Strategies :1. To enhance competitiveness.
2. To add value to the whole value chain.
3. To mechanize and commercialize
agriculture.
4. To promote Malaysia as the Halal Food
Center.
5. To upgrade business environment.
6. To encourage private sector
participation.
NAP 3 (1998 – 2010)
Strategies :To encourage innovations and R & D.
7. To draw foreign investment to help local
business to upgrade their technology.
8. To enhance vocational skills and training.
9. To upgrade business environment.
10. To adopt an integrated approach in
agricultural development.
6.
PART IV
AGRICULTURAL COMMODITIES
OF MALAYSIA
Main Agricultural Commodities
Food Products
 Industrial Crops
 Forestry and Timber- based
products
 Others Economic Crops
(Coconut, Pepper, Tobacco &
Miscellaneous Crops)

Food Products
Food Crops
 Paddy
 Fruits and Vegetables
o Livestock
o Fisheries
Industrial Crops
o
o
o
Oil Palm
Rubber
Cocoa
SUMMARY
• Increase in the production of oil palm.
• Decline in the production of rubber, sawlogs and
cocoa.
• Oil palm is the main contributor to the GDP from
agriculture (35% in 2003).
• Self sufficiency in fruits, poultry and eggs.
• Not self sufficiency in rice, vegetables, beef, mutton,
pork, milk and food fish.
• Target to increase food production and to be net
exporter of food.
• Continued dependence on the import of rice.
Agriculture Land Use
(‘000 hectares)
Item
Rubber
Oil Palm
Cocoa
Paddy
Coconut
Pepper
Vegetables
Fruits
Tobacco
Others
1985
1,948.7
1,482.4
303.9
655.0
334.1
5.4
31.8
150.1
16.2
94.3
1990
1,836.7
2,029.5
419.1
680.6
315.6
11.5
35.2
204.6
10.2
94.8
1995
1,690.0
2,540.0
190.0
670.0
250.0
10.0
42.0
260.0
11.0
106.0
2000
1,600.1
3,430.5
77.9
535.1
158.5
13.9
40.3
314.9
16.9
125.8
Total
5,021.9
5,637.8
5,769.0
6,313.9
Agricultural Value-Added, 1985 - 2000
Item
Industrial Crops
Rubber
Oil Palm
Sawlogs
Cocoa
Food Commodities
Paddy
Fruits
Vegetables
Fisheries
Livestock
Miscellaneous
Total
Share of Agriculture
to GDP
1985
RM million
%
1990
RM million
%
1995
RM million
%
2000
RM million
%
8,545
2,279
3,604
2,104
558
2,857
583
299
378
1,201
396
72
19
30
18
5
24
5
3
3
10
3
10,900
2,043
5,312
2,315
1,230
3,564
622
406
427
1,505
604
74
14
36
16
8
24
4
3
3
10
4
11,629
1,692
6,842
2,255
840
4,340
672
476
503
1,823
866
72
10
42
14
5
27
4
3
3
11
5
11,991
1,371
8,412
1,444
764
5,246
702
576
635
2,221
1,112
67
8
47
8
4
29
4
3
4
12
6
449
4
364
3
262
2
603
3
11,851
100
14,828
100
16,231
100
17,840
100
21
19
14
13
Value Added of Major Commodities,
2001 – 2003 (RM million)
Item
Other Agriculture
Crude Palm Oil
Forestry & Logging
Fishing
Rubber
Total
2001
2002
2003
5,556
6,381
2,440
2,390
1,129
5,690
6,389
2,562
2,569
1,228
5,767
6,572
2,618
2,641
1,271
17,896
18,438
18,869
Value Added of Major Commodities,
2001 – 2003 (RM million)
Growth
(% )
Item
2001
Agriculture, Forestry
and Fishing
2002
Share to
Agriculture (% )
2003
2001
2002
2003
1.8
3.0
2.3
100
100
100
Oil Palm
8.9
0.1
2.9
34.9
34.7
34.8
Forestry & Logging
0.6
5.0
2.2
16.8
13.9
13.9
Fishing
(10.0)
7.5
2.8
12.1
13.9
14.0
Rubber
(10.9)
8.8
3.5
6.1
6.7
6.7
3.2
2.4
1.3
30.1
30.8
30.9
Other Agriculture *
* Including livestock, cocoa,fruits,copra, vegetables,tobacco,tea, flower, pepper and pineapple.
Self sufficiency Level of
Major Food Commodities (%)
Item
1985
1990
1995
2000
2005 *
CROPS
Rice
Fruits
Vegetables
73.6
101.8
80.8
79.4
110.4
75.2
76.3
98.8
71.6
73.0
99.3
75.0
70.7
109
79.5
LIVESTOCK
Beef
Mutton
Poultry
Pork
Eggs
Milk
43.0
9.4
108.6
103.3
103.3
4.0
23.8
10.5
113.9
106.3
109.4
4.3
19.2
6
110.7
104
110.3
3.5
20.8
6.4
126.6
80.0
113.0
4.0
22.5
7.1
125.6
87.5
112.2
4.5
94.9
91.1
94.5
89.0
89.7
FOOD FISH
Forecast of Value-Added For The Food Sector
Item
Paddy
Livestock
Fisheries
Vegetables
Fruits
Total
Share to
Agriculture GDP
1995
2000
RM million % RM million
672 15.5
702
866
20
1,112
1,823
42
2,221
503 11.6
635
476
11
576
4,340
100.0
26.7
5,246
2005
% RM million
13.4
742
21.2 1,217
42.3 2,563
12.1
826
11
775
%
12.1
19.9
41.9
13.5
12.7
100.0
100.0
29.4
6,123
30.9
2010
RM million
788
1,394
2,900
1132
1042
7,256
%
10.9
19.2
40
15.6
14.4
100.0
32.5
Forecast of Production of Major Food
Commodities(‘000 tonnes)
Item
1995
2000
2005
2010
CROPS
Rice
Fruits
Vegetables
3,110.6
1,372.6
1,019.9
718.1
3,599.1
1,456.8
1,234.9
907.4
4,353.1
1,512.9
1,660.4
1,179.8
5,457.8
1,608.8
2,232.5
1,616.5
LIVESTOCK
Beef
Mutton
Poultry
Pork
Eggs
Milk *
1,400.1
16.9
0.7
687.4
283.4
374.9
36.8
1,706.3
25.5
0.9
1,040.0
150.0
440.4
49.5
1,979.5
38.7
1.2
1,166.1
210.0
498.7
64.8
2,266.8
58.6
1.6
1,340.5
220.0
560.0
86.1
764.5
631.8
132.7
1,012.0
756.8
255.2
1,228.2
825.0
403.2
1,500.4
899.0
601.4
5,275.2
6,317.4
7,560.8
9,225.0
FOOD FISH
Marine
Aquaculture
TOTAL
Trade Balance of Foodstuff
2002 (RM million)
Item
Livestock
Fisheries
Crops
Others
Total
Exports Imports Balance
898
2,303
(1,405)
1,293
1,217
76
3,901
7,816
(3,915)
1,330
1,100
230
7,422
12,436
Target : To be a net food exporter by year 2010
(5,014)
Trade Balance of Foodstuff
2010 (RM million)
Item
Livestock
Fisheries
Crops
Others
Total
Exports Imports Balance
3,882
2,922
960
4,925
841
4,084
6,084 10,982
(4,896)
2,471
865
1,606
17,362
15,610
1,752
Production and Hectarage
of Industrial Crops
1985
Item
1990
1995
2000
Production Hectarage Production Hectarage Production Hectarage Production Hectarage
('000 tonnes) ('000) ('000 tonnes) ('000) ('000 tonnes) ('000) ('000 tonnes) ('000)
Oil Palm
4,133.4 1,482.4
6,095.0 2,029.5
7,726.0 2,540.0
10,842.0 3,430.5
Rubber
1,469.5 1,948.7
1,292.0 1,836.7
1,074.0 1,690.0
615.0 1,600.1
Cocoa
108.0
303.9
247.0
419.1
132.0
190.0
70.0
77.9
Exports of Industrial Crops, (RM billion)
Item
1985
1990
1995
2000
Palm Oil
4.0
4.4
10.1
11.0
Rubber
2.9
3.0
4.0
2.6
Cocoa Beans
0.4
0.5
0.2
0.2
Total
7.3
7.9
14.3
13.8
PART V
AGRICULTURAL
INSTITUTIONS
Agriculture Institutions
Agricultural development in Malaysia is
entrusted under the following 4
ministries : Ministry of Agriculture
 Ministry of Primary Industries
 Ministry of Rural Development
 Ministry of Land and Cooperative
Development.
Ministry of Agriculture
Roles & Functions
Responsible for improving the incomes
of farmers, livestock breeders and
fishermen by efficient utilization of the
nation’s resources, manages food
production for domestic consumption
and exports.
Ministry of Agriculture
Departments under the Ministry :



Department of Agriculture
Department of Fisheries
Department of Irrigation & Drainage
Department of Veterinary Services
Ministry of Agriculture
Agencies under the Ministry :o
o
o
o
Agricultural Bank of Malaysia
Malaysian Agriculture Research &
Development (MARDI)
Farmers’ Organization Authority
Federal Agricultural Marketing
Authority
Ministry of Agriculture
o
o
o
o
Fisheries Development Authority of
Malaysia
Kemubu Agricultural Development
Authority (KADA)
Muda Agricultural Development
Authority (MADA)
Pepper Marketing Board
Ministry of Primary Industries
Roles & Functions:
Oversees the development of the
primary commodities covering R & D,
production, processing and marketing
in respect of timber, palm oil, rubber,
cocoa, pepper, tin, copper and other
minerals.
Ministry of Primary Industries
Departments and agencies under the Ministry : Forestry Department
 Malaysian Rubber Board (MRB)
 Rubber Industry Small Holders
Development Authority (RISDA)
 Malaysian Palm Oil Board (MPOB)
 Forest Research Institute of
Malaysia (FRIM)
 Malaysian Timber Industry Board
Ministry of Primary Industries
 National Tobacco Board
 Malaysian Cocoa Board
 Tin Industry Board
(Research & Development)
Ministry of Land & Cooperative
Development
Agencies involved in agricultural development : Federal Land development Authority
(Felda)
Land Development Under FELDA
(As at 31-12-2002)
Crop
Oil Palm
Acreage
(Hectare)
314,265
69.3
Rubber
132,981
29.3
Sugarcane
4,663
1.0
Cocoa
1,567
0.3
Others
282
0.1
453,758
100
Total
%
Ministry of Rural Development
Agencies involved in agricultural
development : Federal Land Consolidation and
Rehabilitation Authority (FELCRA)
FUNCTIONS OF FELCRA
• The rehabilitation of unsuccessful state managed
schemes.
• The consolidation of unused government land
fringing villages for the purpose of providing
additional land to small farmers so as to enable them
to possess economic size land holdings.
• Youth land development program to develop unused
marginal government land to provide land to
unemployed rural youths.
• In situ development project.
PART VI
POVERTY ERADICATION
IN THE AGRICULTURAL/RURAL SECTOR
Incidence of Poverty
• The incidence of poverty in Malaysia is
based on the poverty line income (PLI).
• The PLI is defined as an income sufficient
to purchase a minimum basket of food to
maintain household members in good
nutritional health & other basic needs such
as clothing and footwear, rent, fuel and
power, transport and communications,
health care, education and recreation.
Poverty in Malaysia
Year
Sector
Incidence of
Poverty
No. of Poor
Households
1990
Urban
7.1
n.a
Rural
21.1
n.a
Total
16.5
n.a
Urban
3.6
83.8
Rural
14.9
281.8
Total
8.7
365.6
Urban
3.4
86.8
Rural
12.4
264.3
Total
7.5
351.1
1995
1999
Strategies For Poverty Reduction In
Agricultural/Rural Sector
Providing employment opportunities in
higher-paying jobs, while welfare
handouts were reserved for the aged and
disabled who could not find employment.
Since the poor were largely engaged in
agriculture, there were encouraged to be
involved in modern farming and non-farm
or off-farm activities.
Programs For Poverty Reduction
In Agricultural/Rural Sector (1)
• Resettle the landless and those with
uneconomic holdings in new land
development schemes;
• Undertaking in-situ development of
existing agricultural land through
rehabilitation and consolidation of the
land, replanting of old commercial crops
with new higher-yielding clones and
better planting techniques;
Programs For Poverty Reduction
In Agricultural/Rural Sector (2)
• Integrating agricultural and rural
development with downstream processing
of farm products and encouraging village
industries and rural entrepreneurship to
generate additional sources of income;
• Introducing double-cropping or off-season
cropping for paddy, inter-cropping and
mixed farming on the same plots of land to
supplement the income derived from main
crops;
Programs For Poverty Reduction
In Agricultural/Rural Sector (3)
• Establishing farmers’ markets in urban
centers so that farm produce can be sold
directly and fetch better prices;
• Providing training and education on topics
pertaining to farming as well as work
attitudes and values to motivate
participants to become more productive
farmers;
Programs For Poverty Reduction
In Agricultural/Rural Sector (4)
• Providing industrial and vocational
training for the rural manpower, coupled
with credit facilities and related support,
to enable them to be employed in nonfarm occupations or start their own
businesses in rural areas and urban
centers;
• Improving educational access as well as
providing text books and financial
assistance to children of poor
households;
Programs For Poverty Reduction
In Agricultural/Rural Sector (5)
• Providing infrastructure and social
amenities as part of a broader program to
improve the quality of life of all Malaysians.
For the rural population, they include the
provision of portable and piped water,
electricity, roads, medical and health
services and schools, including rural
hostels.
• Providing micro credit for the financing of
income generating projects.
Thank you