44

Primary Sector: Agricultural

Sector
 LEARNING OUTCOMES

After reading this chapter, you should be able to:

Outline the past and current development of the agricultural
sector
Discuss the contributions and the importance of the
agricultural sector to Malaysia’s economy
Explain the various national agricultural policies implemented
by the government
Discuss the problems and challenges faced by the agricultural
sector
Explain the strategies for the future survival of the agricultural
sector

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 DEVELOPMENT OF THE
AGRICULTURAL SECTOR IN
MALAYSIA
 Pre-independence Period (1800–1957):
– The agricultural sector was characterized by
dualism between the estates and the
smallholding sub-sectors.
– Estates were land holdings that are larger than
40.5 hectares (or 100 acres), dominated by the
Europeans with the plantation of commercial
crops such as rubber, oil palm, tea, cocoa and
coffee

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 DEVELOPMENT OF THE
AGRICULTURAL SECTOR IN
MALAYSIA (cont.)
– Smallholding sub-sector was less commercialized
with an average farm size of only 1.45 hectares,
and the crops grown included industrial crops,
rice, fruits and vegetables, owned by Malay
peasants who were traditionally involved in rice
cultivation, while Chinese and Indian immigrants
grew a variety of crops such as pepper, tapioca
and vegetables on small plots.

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 DEVELOPMENT OF THE
AGRICULTURAL SECTOR IN
MALAYSIA (cont.)
 Post-independence Period (1958–1970):
– The focus of agriculture development in the First
Malaya Plan (1956–1960),
– The Second Malaya Plan (1961–1965) and
– The First Malaysia Plan (1966–1970) was on the
industrial crops of rubber and oil palm for the export
market.

 New Economic Policy (NEP) Period (1971–1990):

focusing on smallholding agricultural development.

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 DEVELOPMENT OF THE
AGRICULTURAL SECTOR IN
MALAYSIA (cont.)
 Vision 2020 Period (1991–2020):

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 CONTRIBUTIONS AND
IMPORTANCE OF THE
AGRICULTURAL SECTOR
 Contribution to the GDP of the economy
 Contribution to employment
 Bringing development to rural areas
 Increased food self-sufficiency
 Improved balance of trade
 Interrelated with industrial development
 Promote agro-tourism
 Diversifying and shielding the economy from
external shocks

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 National Agricultural Policy 1
(1984–1991)

 Objectives:
– Maximize income through optimal usage of
resources in the sector, i.e. to increase the per
capita income for farmers through the increase in
efficiency and productivity.
– Increase the food production for local markets,
such as paddy, vegetables, fruits and poultry.

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 National Agricultural Policy 1
(1984–1991) (cont.)
 Strategies:
– New land development by FELDA, RISDA and
FELCRA
– In-situ agricultural development
– Support services
– Social and institutional development
– Private sector participation

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 National Agricultural Policy 1
(1984–1991) (cont.)

 Performance of NAP1:
– Agricultural sector grew by 4.6%, vegetables
increased by 4%, while beef production increased
by 1.9%.

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 National Agricultural Policy 2
(1992–1997)

 Objectives:
– Maximize agricultural income through the optimal
use of resources in the sector
– Promote agro-industrial integration
– Achieve balanced development between the
agricultural and non-agricultural sectors
– Expand the food industry
– Promote the involvement of Bumiputera in
modern and commercial agriculture

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 National Agricultural Policy 2
(1992–1997) (cont.)
 Strategies:
– Optimizing resource use
– Accelerating agro-based industrial development
– Enhancing of research and development (R&D)
– Encouraging greater participation of the private sector
– Reforming marketing approaches
– Promoting farmers’ institutions
– Developing human resources
– Improving food production

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 National Agricultural Policy 2
(1992–1997) (cont.)

 Performance of the NAP2:

– Increase in the total value added of this sector
from RM11.9 billion in 1985 to RM16.2 billion in
1995.
– However, this policy failed to increase
employment in this sector as its contribution to
employment decreased from 31.3% in 1985 to
36.7% in 1995.

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 National Agricultural Policy 3
(1998–2010)

 Objectives:
– Enhance food security
– Improve productivity and competitiveness of this
sector
– Strengthen links with other sectors
– Conserve and ensure sustainable use of natural
resources

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 National Agricultural Policy 3
(1998–2010) (cont.)

 Strategies:
– Agroforestry approach: focused on solving the
problem of lack of resources such as land
– Product-based approach: main product to be
produced and the market are determined based
on demand, market potential and consumers’
preference and taste.

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 National Agricultural Policy 3
(1998–2010) (cont.)

 Performance of NAP3:
– The contribution of the agricultural sector to the
GDP in 2010 decreased to 7.4%.

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 National Agro-Food Policy
(2011−2020)
 Objectives:
– Offer food security
– Transform the agro-food industry into a competitive and
sustainable industry
– Raise income of agro-based entrepreneurs
 Strategies:
– Assurance of national food security
– Increase contribution of the agro-food industry
– Complete value chain
– Develop human capital

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 PROBLEMS AND CHALLENGES
OF THE AGRICULTURAL
SECTOR
 Small and uneconomic land holding
 Competition for land
 Dependence on imported raw materials
 Low participation of private sector
 Problem of labour
 Global competition and requirements

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 SURVIVAL STRATEGIES OF THE
AGRICULTURAL SECTOR

 21st Century Village

 Transformation of agricultural sector
 Increase the use of ICT in agricultural sector
 Practice group farming
 Develop rural areas
 Encourage private sector investment

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