Transcript PRT 2008

PRT 2008
Lecture 14
Approaches to agricultural
development
Malaysian agricultural policy
• Producer (1960s)
• Producer and downstream activities
(1980s)
Agricultural development
• Lifestyle
• Source of income
• time
Lifestyle
• For subsistence
• Work in the morning
• Relax in the afternoon
Source of income
Emphasis on commercial value
Time
• 1960-1970. Bumiputra grew crops on < 5 ha of
•
land (rubber, oil palm, orchard). Land inherited
from their parents. Indian worked as labor in
rubber and oil palm plantations. Chinese worked
as middlemen. The English owned estates
1070-1980. More Bumiputra became
smallholders, in settlement schemes (FELDA).
Indians stilt worked as labor and in livestock.
Chinese started to open estates, rear chicken
and pig.
1980 to now
Introduction of Malaysia incorporated, buying
over estates (Golden Hope, Guthrie, Sime
Darby) from British owners. Agriculture
expanded. Industrial commodity became
important. Food still insufficient in the
country. Aquaculture and eco-tourism expand.
Cont.
Agriculture became one of the engines
of economic growth. GDP growth was
high (> 8 %). Manufacturing was the
catalyst. Malaysia is going towards
industrialization.
National Agricultural Policy
• NAP 1 (1984-1991)
• NAP 2 (1992-2010)
• NAP 3 (1998-2010)
NAP 1
• Opening of new schemes for rubber, oil
palm and cocoa continued to increase
export and job market, reduction of
poverty, support manufacturing.
• Improvement of smallholders (subsidy).
Use of modern technologies. Gave
training.
Cont.
• Increase incentive for manufacturing
sector. Late 1980s, manufacturing
expanded. Investment in agriculture
became less attractive. Contribution of
agriculture to GDP contracted from 23 %
(1980) to 8.7 % (2001) and 7.5 % (2005).
But absolute amount increased from RM
10.2 b (1980) to RM 17.9 b (2001). So
agriculture is still important.
NAP 2
• Towards sustainable agriculture
• Expansion of agro-based industries
• Less export of raw materials
• Increase the role of private sector in the
production (import then re-exported)
• Agro-forestry policy revised to maintain
biodiversity. Conservation genetic
resources
Cont.
• 1997 – Southeast Asia economic crisis
began. Structural changes in the economy.
• Trade liberalization and globalization lead
to establishment of WTO and AFTA
Cont.
• New issues and challenges
• Changing matrixes in the environmental
agricultural trade
Cont.
• Liberalization increases competition
• Trade without border
• Consumers emphasized on quality
• Biotechnology improved production
• ICT changed trade paradigm
Cont.
Malaysia was under threat due to competition
on production sources, consumer attitude,
slow rate of adopting new technologies,
competition from cheap import the problem
of sustainability
Cont.
In agriculture, industrial commodity subsector (oil palm) expanded, but food
commodity sub-sector not developed (a lot of
import). George Soros took the opportunity to
speculate currency.
Cont.
Loss of foreign exchange. Import bill
increased. Agriculture labor reduced. Took in
foreign labor (problem). Labor productivity
was down compared to manufacturing.
Rubber not tapped. Oil palm not harvested.
Cont.
Limited land area for agriculture. Low
productivity for smallholders. Abandoned land
increased (now > 400,000 ha). Peripheral
land changed status to residential and
industrial.
Cont.
WTO and AFTA were on. High
competition for Malaysian agriculture.
Cheap products from Thailand and
Indonesia. Investment risk was high.
Cont.
Increase in production cost. Food processing
industries imported 70 % of their required
raw materials. Downstream factories were not
operated with full capacity. Pressure from
GAP (hygienic)
Cont.
Gave negative pressure to buying
power, food security, input cost
and import cost of food.
Cont.
By 1997, it was realized that NAP 2 was not
capable of realizing the plan. Not competitive.
Without strategy. Could not improve
agriculture. Need to revise.
NAP 3
Agriculture as a big business
entity in response to market
demand, preference and potential
Strategic approaches
• Agro-forestry
• Product-based
Agro-forestry approach
• Increase agro-forestry activity
• Same land can produce agricultural and
forest products
• Encourage private sector to get involve on
commercial agro-forestry
Product-based approach
• Strengthen food security – reduce import.
Encourage private sector and state
government to produce food
commodities. Give incentive, support,
infrastructure.
• Improve marketing efficiency – pasar tani,
direct sale
• Contract farming
Cont.
• Increase productivity
• Focus on biotechnology
• Use all biomass
• Reduce labor
• Automation
• Increase value-added of products
• Maximize land resource
Cont.
• Encourage private sector
• Establish agro-technology park
• Establish incubation center
• Establish land bank
• Encourage foreign investment
Cont.
• Strengthen agricultural export
• Halal food hub
• Bilateral agreement (palm oil credit)
• Barter trading
• Regional distribution center
• Promotion of Malaysian products
Cont.
• Human development
• Trained labor
• K-workers (biotechnology, mechanization,
automation, ISO)
Development institutions
• Education
• Research
• Extension
Education
• IPTA
• Colleges (RISDA)
• Training centers (FELDA)
• Agricultural Institute (DOA)
• Incorporated Society of Planters (Cadet
Planters)
• Scientific and professional
societies (MSSS, AIM, MAPPS)
Research
• Public – MARDI, MRB, MPOB, MCB, FRIM,
FELDA (Sg TEKAM), VRI
• Private sectors – Golden Hope (OPRS), UP
(Teluk Intan), Nestle (coffee, Kedah),
Applied Agricultural Research (Sg. Buloh),
Guthrie Research Chemara
Extension (TOT)
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DOA
MARDI
RISDA
MRB
MPOB
KESEDAR
KETENGAH
FAMA
Laws and Standard
• DOA – GAP (crop and livestock),
integrated pest management, zero
burning, certification integrated pollution
control, organic farming certification
scheme
• Ministry of Health – Food Act 1983, GMO
policy, Labor Health and Safe Act,
guideline for medical crops