Malaysia's Agriculture: A Growing Industry

A Growing Industry

Malaysia’s agriculture sector is expected to grow 3.5 per cent this year compared to 3.1 per cent in 2006 on the back rising output in food commodities, higher oil palm and rubber production, as well as the Northern Corridor Economic Region-led projects.

Agriculture remains an important contributor to the economy, estimated to account for 7.7 per cent of Malaysia’s grass domestic product (GDP) in 2007 compared to 7.9 per cent in 2006.

Related development in the Northern Corridor could further boost the sector’s contribution to GDP growth.

Palm oil output, for instance, is expected to increase two per cent following improved yields and expansion in matured areas.

In addition, measures are being taken to boost output through the wide use of high-quality seedlings and latest technologies, as well as knowledge-based production systems, which will result in higher palm oil output.

Rubber production is also expected to expand supported by firm prices, which is likely to encourage small-holders to increase tapping activities and the utilization of better clones, stimulations and low-intensity tapping systems.

Rapid developments in the agro-food industry and promotion of other sources of growth in agriculture, including aquaculture, horticulture, seaweed, deep sea fishing as well as kenaf planting will further boost the output of the sector.

Livestock industry output is also envisaged to increase, contributed by integrated farming projects involved in rearing of goats and cattle in oil palm and rubber plantations.

With modern rearing systems, poultry and eggs production is expected to rise to meet local and external demand.

Value-added activities in the agriculture sector is estimated to ease at 3.1 per cent this year compared to 5.2 per cent in 2006, coming from higher output in food commodities, including livestock, fishing and other agriculture sub-sectors.

Higher value-added of the agro-food sub-sector is in line with the Government’s efforts to reduce the food import bill and increase meat and dairy products’ self sufficiency level – supported by initiatives to set up the National Feedlot Centre and Permanent Food Production Parks.

Crude palm oil production is expected to be lower this year at 15.7 million tonnes compared with 15.9 million tones in 2006 due to major floods that destroyed crops in the early part of the year.

Nevertheless, the new matured areas coming onstream, better estate management and higher quality agricultural inputs are expected to partially offset the negative impact of unfavourable weather.

Despite strong rubber prices, rubber production declined 3.5 per cent to 589,379 tonnes in the first six months of this year compared with 17.9 per cent to 610, 512 tonnes in the comparable period in 2006.

The fall was mainly due to the wintering season and excessive rainfall which disrupted rubber tapping activities. As a result, rubber production in 2007 is expected to expand 1.3 per cent compared with 14 per cent in 2006.
Value-added activities in the fishing industry expanded by four per cent in the first six months of 2007 compared with 9.4 per cent in the same period a year ago, attributed to higher marine fish landings due to expansion in deep sea fishing.

Values-added livestock is also projected to expand strongly by 10.1 per cent in 2007 compared with 6.9 per cent in 2006 led by integrated farming with rearing of cattle and goats in oil palm and rubber plantations.

Other agriculture sub-sectors – which include paddy, pineapples, tobacco, coconut, vegetables, fruits, tea, flower and pepper – is projected to increase strongly by five per cent this year compared with 4.2 per cent in 2006 on the back of higher production of vegetable and fruits, expansion in cultivated areas, organic and modern farming.

Source: Economic Report 2007/2008, The New Straits Times, Saturday, September 8, 2007