 |
 |
|
|
|
|
|
|
|
||
| Growth in agricultural production has weakened | ||
| Growth in agricultural production in Malaysia has been declining, from an annual average of around 6.5 per cent in the 1960s to 3 per cent in the first half of the 2000s. Limited availability of arable land has been a major contributor to this slowdown in growth in agricultural production. The increase in agricultural land has slowed from an annual average of around 2.7 per cent in the 1960s to an estimated rate of 1.61 per cent in the first half of the 2000s. Strong competition for resources from the manufacturing sector has led to a significant decline in the share of agriculture in total employment, from around 26 per cent in 1990 to 15 per cent in 2006. Many male farm workers have migrated to urban areas and, as a result, women have become the major source of labour supply in many rural areas, providing around 75 per cent of the labour force in areas such as Sabah (Masud and Paim 2004). |
||
| Crop production | ||
| Cropping productivity has been lagging | ||
| Another reason for the decline in agricultural output growth is a weakening in overall agricultural productivity. This has especially been the case in the cropping sector, with growth in productivity in the sector slowing from an annual rate of around 3 per cent in the period 1961–80 to a mere 0.67 per cent in 1981–2001 (Avila and Evenson 2003). Overall, the key Malaysian agricultural commodities are palm oil, rubber and forestry products, accounting for around 60 per cent of the total agricultural output. Paddy rice accounts for 3.4 per cent, while coconut, vegetables, fruit, tobacco and pepper have, in aggregate, a share of 15.2 per cent (Wong 2007). Palm oil is the dominant Malaysian agricultural product. Malaysia is the second largest producer of palm oil following Indonesia. Malaysia accounted for 43 per cent of global palm oil production in 2006(USDA 2007). To remain internationally competitive, Malaysian palm oil producers have been investing in research and development, developing new varieties for production and diversifying into other business activities such as producing biofuels using palm oil. Malaysia is also seeking to increase its market access by obtaining reductions in barriers to palm oil imports imposed by other countries. Despite a significant increase in the mid-1990s, production of vegetables declined in the late 1990s and early 2000s, before a gradual recovery in recent years (figure b). The significant increase in production of vegetables in the mid-1990s was largely because of an expansion of the planting area and the efforts of the Malaysian government to consolidate the industry into larger farms (SEARCA 2006). Slow growth in recent years in the production of food crops such as rice, vegetables and fruits mainly reflects a lack of productivity improvement. |
||
| Livestock production | ||
| Livestock production dominated by poultry | ||
| In contrast, production increases in the livestock sector have been relatively strong, with annual average productivity growth of around 3.7 per cent achieved since the 1960s. The improvement in breed genetics has been the major contributor to productivity growth in the livestock sector, in which poultry is the dominant industry (Chang 2005). Poultry is the most viable livestock industry in Malaysia. Its productivity is the highest in the agricultural sector in Malaysia and close to international standards (Chang 2005). Production is mainly undertaken by large commercial operations, which benefit from economies of scale and have strong links with the food processing industry. The pig industry was one of the fastest growing industries prior to the Nipah virus outbreak in 1998 and 1999, which resulted in a massive culling (figure c). The recovery in the pig industry has been slow since then. Domestically, pig meat is mainly consumed by ethnic Chinese, who account for around 25 per cent of the population. The relatively small domestic market is insufficient to provide significant support for growth in the pig industry, while export opportunities have been limited by high production costs compared with those of neighbouring competing countries, such as Thailand (Moore 2007). The beef and dairy industries are small in Malaysia. There are many factors constraining growth in these industries. For example, the warm and humid climatic conditions are unfavourable for beef and milk production, especially with limited farm land available for pasture. In addition, the beef and dairy industries consist mainly of smallholders with relatively small herd sizes. As a result, it is difficult for the industries to achieve productivity gains and economies of scale, and to compete with imports. |
||
|