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Friday, Sep 18, 2020

The US$12 billion reason Mahathir’s Malaysia wants a return to agriculture

As it grapples with a US$12 billion food import bill, the country is considering a renewed focus on agriculture to boost food security and revenue in tandem. Malaysia is also looking to move away from its reliance on palm oil, which takes up a large chunk of the sector’s resources

In 1991, Malaysian Prime Minister Mahathir Mohamad introduced the concept of Vision 2020 – a plan for the Southeast Asian nation to become self sufficient and fully industrialised in less than three decades. The government’s policies in the 1990s sought to push Malaysians – particularly ethnic Malays, who make up more than 60 per cent of the country’s population – from agriculture to the manufacturing sector.

Now that 2020 is here, however – and Mahathir is back in the driver’s seat after his Pakatan Harapan coalition’s shock victory in the May 2018 election – some policymakers are suggesting a return to agriculture, a former cornerstone of Malaysia’s economy.

Grappling with a high food import bill – about 50 billion ringgit (US$12.3 billion) in 2019 – the government has been actively encouraging youths to take on agriculture and agro-food as professions, paying closer attention to grants and loans given out to farmers and fishermen. It has also cultivated ‘agropreneurs’ who bring technology into farming.

According to the nation’s Agriculture and Agro-based Industry Minister, Salahuddin Ayub, Malaysia’s food import bill had increased by an annual average of 6.5 per cent, with the likes of cereals, cocoa, vegetables, sugar and meat all brought in.

The agriculture sector contributed 99.5 billion ringgit to the nation’s GDP in 2018, with palm oil the sector’s major contributor at 37.9 per cent. But as Malaysia’s palm oil has been caught on the back foot by increasing pressure from the European Union – which is looking to phase out biofuels – and tensions with key importer India, prominent voices such as ex-finance minister Daim Zainuddin are calling for more emphasis on agriculture and the cultivation of the farming industry to reduce unemployment and boost revenue.

“If we start planting the right thing, we can reduce our imports. Not only that, we can also increase our exports, create employment and increase income. Once we do this, locals can get fresh produce at a lower price. If there is excess, we can export and bring in foreign money,” Daim, an adviser to the current Mahathir administration, told local media recently.

Malaysia was ranked 28th in the 2019 Global Food Security index, a jump of 20 places from the previous year, which the government attributed to its reduction of dependence on imports by encouraging the diversification of crops and improving fruit exports. A report published last year by the government-linked Khazanah Research Institute said while food access was no longer an issue for most Malaysians, food affordability remained an issue.

Agriculture minister Salahuddin’s deputy, Sim Tze Tzin, said Malaysia’s self sufficiency was at a good level despite its reliance on food imports, with items such as eggs, poultry and fish at or above target.

“We also export food, the balance of trade is about 16 billion ringgit, although even that is considered very high. We need to boost our food production while dealing with ageing farmers and a shortage of land,” Sim told the South China Morning Post, explaining that modern technology, vertical farming – the practice of growing crops in stacked layers – and urban farming were the ways forward.

Of Malaysia’s 8 million hectares of agricultural farmland, some 6.5 million hectares are accounted for by oil palms, while rubber trees take up 1.2 million hectares. “We definitely should be looking less at palm oil – not abandoning it, but diversifying and integrating the extant land with other crops,” Sim said.

The country’s federal land development authorities have been considering diversification to cash crops – normal crops as well as high-value vanilla, pineapple and rockmelon – as well as livestock farming to boost farmers’ incomes.

While Malaysia pursues the implementation of 5G wireless technology, it is also working to extend the internet of things – the extension of internet connectivity to physical objects – to the agriculture sector, allowing farmers to remotely monitor their crops through a web application, or receive alerts on environmental variables, enabling them to maximise crop yields.
While is vast potential to explore such “smart” farming in the country, there is a long road ahead, said communications and multimedia commission chairman Al-Ishsal Ishak.

“It is one of the key pillars of our 5G move, along with health, education, transport and smart city connectivity. We are going to enrich agriculture so that there’s a business model, attract younger people to this sector and reduce unemployment,” he said, adding that making farming “smart” would attract young Malaysians interested in the start-up and tech scene.

Said Ainun Jaabi, a researcher at the Institute of Strategic and International Studies Malaysia: “We are not categorised as a food-insecure nation, especially when we factor in the contribution of palm oil as a widely consumed vegetable oil. But we should not be dependent on one crop only, as that leaves us vulnerable to economic recessions and global fluctuations.

“We should encourage people to join agriculture by focusing not just on providing land, but also the necessary equipment and affordable technology to encourage urban and smart farming.”

Her take was echoed by political economist Khor Yu Leng, who said there should be no deterrence for agriculture as a profession, but a positive, “buy Malaysia” view from local consumers on the quality and safety of Malaysian farm produce was “a must”.

“The good agricultural practices of Malaysian farmers should be well established, and be held in high regard, to establish a loyal domestic market,” Khor said. “Pro-farmer and food-security efforts may be needed. Imports can flood the market in an unpredictable way and that has to be considered.”

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