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Ninth Malaysia Plan To Strengthen Agriculture And Agro-based IndustryThe agriculture sector registered favourable growth during the Eighth Malaysia Plan period. Export earnings of the sector expanded significantly due to the increase in export volume and better prices of agricultural industrial commodities. The sector continued to provide the raw materials required by the domestic agro-based industries and part of the nation's food demand. Prospects, 2006-2010 The agriculture sector is expected to grow at a higher average annual rate of 5.0 per cent. With the inclusion of the agro-based industry, the growth rate is expected to be 5.2 per cent. During the ninth Plan period, the overall policy thrusts of the agriculture sector will focus on its reorientation towards greater commercialisation and the creation of high-income farmers as well as promotion of greater private sector investment including foreign investment. In this regard, the policy thrusts will be as follows:
Increasing Agricultural Production During the Plan period, efforts will be undertaken to increase agricultural production through new land development, replanting, land consolidation and rehabilitation. The private sector and the government-linked companies (GLCs) will be further encouraged to increase agricultural investments through better incentives and support measures. The production of palm oil is expected to increase at an average rate of 5.5 per cent per annum with the expansion in planted area and higher oil extraction rate (OER). The development of the rubber sub-sector will be focused on accelerating efforts to consolidate and rehabilitate rubber smallholdings to increase productivity. In this regard, an optimum area of 800,000 hectares will be maintained as rubber zone by 2020 to meet the requirement of the domestic rubber processing industries. The production of sawlogs will continue to be based on sustainable forest management. In this regard, the allowable cut rate (ACR) will be set at 266,940 hectares per annum. In addition, R&D on agronomic practices and product development as well as the commercialisation of products from biomass and new products from biotechnology will be accelerated further. Measures will also be undertaken to further promote the nursery and landscape industry. Financial institutions will be encouraged to provide adequate funds for investments in agricultural production, processing, agro-based and other related agricultural activities. Measures will be undertaken by Bank Negara Malaysia (Central Bank) to ensure easier access to credit. Bank Pertanian Malaysia (Agricultural Bank) will be restructured to strengthen its capacity and capability in providing loans. The replanting programme for rubber and oil palm involving 383,010 hectares will be implemented mainly by the Rubber Industry Smallholders Development Authority (RISDA) and Federal Land Development Authority (FELDA). In this regard, high yielding clones will be promoted. Replanting of rubber using latex timber clones for rubberwood will be intensified. To reduce the extraction of timber from natural forests, the implementation of forest plantations, including rubber forest, will be expedited. Efforts will be undertaken to achieve an annual target of 25,000 hectares of forest plantations through the planting of fast growing and high value timber species. Expanding Agro-Based Processing and Product Diversification During the Plan period, agro-based development will focus on increasing utilisation of agricultural produce in the production of high value-added products as well as processing activities. Efforts will be enhanced to increase private sector investment in agro-based processing activities including from agriculture related GLCs, subsidiary companies of the agricultural agencies as well as relevant associations and cooperatives. Focus will also be given to increasing participation of individual farmers and fishermen in agro-based processing activities. The processing of end-products from agricultural industrial commodities is expected to increase further. During the Plan period, the palm oil industry is expected to benefit from greater downstream product diversification. Commercialisation of oil palm biomass products and biofuel will be expedited through greater private sector participation. Research on palm oil will focus on the utilisation of advanced oleochemical technology and biotechnology including nutraceutical and pharmaceutical products. Furniture and furniture components manufacturers will be encouraged to focus on innovative product design and quality and expand their product range to include high-end niche products while improving existing activities. Measures will be undertaken to aggressively promote exports of high quality products in compliance with ecolabelling requirements to sustain market share as well as diversify into new markets. In line with the National Biotechnology Policy, the application of biotechnology to agriculture will be further promoted and intensified to harness the potentials of the agriculture sector in creating new wealth. To accelerate R&D activities in biotechnology, research institutions including institutions of higher education will be equipped with the requisite facilities and equipment. In addition, public researchers will be trained in the field of advanced biotechnology including biodiversity through attachment programmes and greater collaboration with the private sector. Strengthening Marketing and Global Networking During the Plan period, focus will be given to improving the efficiency of marketing delivery services and strengthening the global network through strategic alliances. Towards this end, efforts will be undertaken to strengthen traditional markets and diversify into new markets. The marketing of agricultural industrial commodities, particularly palm oil will be focused on creating and strengthening niche markets by establishing a chain of production processes in strategic locations around specific regions and relocating manufacturing sub-processes to consuming countries as part of the efforts in market penetration. The Malaysian Criteria and Indicators for Forest Management Certification (MC&I), which is recognised as a tool for sustainable forest management, will be expanded to meet the requirements of importing countries, particularly Europe, the United States of America and Japan. Enhancing Income More effective measures will be undertaken to increase incomes of smallholders, farmers and fishermen through productivity improvements within the agricultural subsectors. Ageing smallholders and farers will be encouraged to participate in exit schemes through land consolidation and rehabilitation as well as group replanting programmes. Incomes of rubber and oil palm smallholders will be enhanced through replanting programmes using high yielding clones based on the mini-estate and group farming concepts as well as mixed farming including integration of livestock in plantations, aquaculture and off-farm economic activities. In addition, sustainable income-generating activities will be promoted and training provided to improve the quality of life of subsistence farmers and the forest dependent communities. Strengthening the Service Delivery System The restructuring of agricultural agencies will be undertaken to improve the delivery of services and facilitate the achievement of the growth target of the sector. Various agricultural activities will be managed and monitored on an integrated basis to eliminate duplication of functions and target groups as well as optimise utilisation of resources. The integrated approach will also facilitate the development of value-added activities along the value chain including agrobased processing. To accelerate the development of kenaf and herbal industries, the Ministry of Agriculture (MOA) will be given the responsibility to oversee the development of these industries. Professionals from the private sector will be appointed on a pilot basis to manage agricultural projects in selected areas. Institutional Support And Allocation The transformation of the agriculture sector into a modern, viable and dynamic venture will be led by the MOA, the Ministry of Plantation Industries and Commodities (MPIC) and the Ministry of Rural and Regional Development (MRRD). The MOA will be responsible for the modernisation of the food subsector focusing on programmes such as training, marketing, credit, skills development and dissemination of knowledge on modern agriculture to farmers, fishermen and livestock rearers as well as programmes to develop entrepreneur farmers in the agro-based industries. The MPIC will facilitate the development of agricultural industrial commodities through the transfer of new technologies to smallholders and R&D on product diversification. Efforts towards developing smallholders and improving the standard of living of the rural population will be undertaken by the MRRD, mainly through capacity building as well as poverty eradication programmes. In line with the new emphasis on agriculture and its contribution to economic growth, a total allocation of RM11.4 billion will be provided to implement various agricultural programmes and projects. This represents an additional amount of RM4.7 billion or 70.0 per cent higher than the allocation provided in the Eight Plan. A total of RM4.4 billion will be allocated for the modernisation of agriculture, mainly for projects in the regional development areas, as well as replanting and land consolidation and rehabilitation programmes while another RM2.6 billion for support services and RM1.5 billion for agricultural irrigation programmes. Conclusion During the Eighth Plan period, the agriculture sector achieved a higher rate of growth than targeted and contributed towards economic growth and export earnings. There was increased involvement of the private sector in large scale commercial food production and agro-based industry. During the Ninth Plan period, the development of the agriculture sector will be intensified to serve as the third engine of growth. The emphasis will be on New Agriculture, entailing large-scale commercial farming and participation in high quality and value adding activities leading to enhanced productivity and higher incomes. Target specific policies and strategies will be implemented to expedite the transformation of the agriculture sector into a modern, dynamic and competitive sector including with respect to agro-based processing activities and agricultural entrepreneur development. Development Expenditure And Allocation For Agriculture, 2001-2010 (RM
million)
Source: Ministry of Finance and Economic Planning Unit Notes: 1 Agricultural related projects in regional development authorities (RDAs) areas. 2 Entrepreneur development was assumed under the various programmes during the 8MP. 3 Includes physical infrastructure, buildings, facilities and ICT components as well as poverty |
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