Chapter 4 2020-RP KEDAH

CHAPTER 4
PRIMARY SECTOR
OVERVIEW OF CHAPTER 4
4. Primary Sector
4.1 Contribution
4.2 Problems/Challenges
4.3 Development Of Primary Sector
4.3.1 Phases Of Primary Sector
4.3.2 Overview Of Agriculture Policy
NAP 1, NAP 2, NAP 3, National Agro Food Policy (objective and strategies)
4.3.3 Old Agriculture vs New Agriculture (comparison of characteristics)
4.1 CONTRIBUTION OF
AGRICULTURE
sector become the backbone ofSECTOR
1. Backbone of economy
Agricultural the economy due to its contribution to economy. At
early independence, it contributed more than 39% of the GDP, provided 58.3% jobs to the
people and 50% of export earning. Although its proportion of GDP decreasing over years, the
volume of production is increasing. This sector is still important because its provides supply of
food to the country.
2. Diversifying and shielding of economy

Involving in agricultural sector can reduce the risk of too dependent on secondary or tertiary
sector. Income from this sector can balance or patch up the downturn in other sectors. Thus it is
important to develop this sector although Malaysia is better off in industrial sector.
3. Development in rural area

Since most of agricultural activities are located in rural area, development of this sector will
indirectly develop rural area. This can reduce imbalance development between urban and rural
area. More facilities such as roadway, water supply, electricity and telecommunication services
will be provided in this area to support agricultural activities.
4.1 CONTRIBUTION OF
AGRICULTURE SECTOR (cont.)
4. Increased self-sufficiency
Most of food exporters switch their economic activity to industrialization, thus reducing
their production and export of agricultural product, especially food. Thus, it is
important to have our own supply of food.
5. Improve balance of trade

Since Malaysia switched its focus to secondary sector accompanied by an increase in
population, Malaysian import bill on food increased over years. Thus, increasing in
agricultural production can reduce the import of food and can improving the balance of
trade.
4.2 PROBLEM IN
AGRICULTURAL SECTOR
 Labour problems
 Labour shortages, ageing farm labor and preferences for non-farm jobs
 Migration of youth to urban area
 Competition for land and scarcity of land
 Less land can be used for agriculture sector
 Agriculture land being scarified for manufacturing and construction
 Not enough R&D and lack of technology in food crops
 Less R&D due to lack of capital
 Slow rate of technological development and innovation thus lead to low productivity
4.2 PROBLEM IN AGRICULTURAL
SECTOR (cont.)
 Low growth rate
 Due to less quality control, good management practice, disease control
 Lack of investors
 Less capital/investment by private sector due to low return, thus less
development and improvement can be done
 Lead to small scale farm
 High risk
 Agriculture products depend on nature and perishable factor
 Unstable price of commodities
4.3 DEVELOPMENT OF PRIMARY SECTOR
Phases of Primary sector
Malaysia economy depended on primary sector in early independence, focusing on rubber
plantation and tin mining.
In 1970s, although the contribution of primary sector towards GDP and employment declined,
the real production and values increased. New varieties of seeds and modernization of the
production of most crops were introduced. (palm oil n cocoa)
In 1980s to 1990s, the production of rubber declined, meanwhile the production of palm oil,
fisheries and non-traditional agriculture such as fruit and vegetables increased. Malaysia become
the world’s largest producer of crude palm oil as its share to total world production was 50%
After 2000, the contribution and production of agriculture, livestock, forestry and fishing
declined, due to decreased in planted area, uneconomic-sized holdings among smallholders,
labour shortage and low price.
OVERVIEW OF AGRICULTURE POLICY:
THE NATIONAL AGRICULTURAL POLICY 1 NAP1
(1984-1991)
Objective:
 Maximization of income through optimal utilization of resources
Strategy:
 Land development (FELDA & RISDA)
 In-situ development
 Support service
(1984-1991) STRATEGY 1 : LAND DEVELOPMENT
 Through
-FELDA, RISDA and FELCRA
 Objective:
-To modernize the agricultural sector
-Eradicate poverty
-Overcome unemployment
 Focused more on export crops

 Involved-
-Land clearing, provision of infrastructure, services and housing.
-Assistance in production, marketing and processing crops.
(1984-1991) STRATEGY 2 : IN-SITU
DEVELOPMENT
 Integrated Agricultural Development (IADP)
- Improve farm productivity and income
 Drainage and irrigation
- For paddy land
 Replanting and rehabilitation

- Replanting Incentive Scheme
- interest free loan
i. Forestry development
- reforestation and efficient exploitation - continuous availability
ii. Fisheries
- Boat Modernization Scheme, Subsidy and Credit Scheme
- training and subsidy for inland (lake/river) fisheries activity
iii. Livestock
- development of fodder and feeds
- veterinary health service
(1984-1991) STRATEGY 3 : SUPPORT SERVICES
 Marketing
- Consolidated traditional markets, penetrating new market, and promoting product
- BERNAS, MCB, FAMA
 Agricultural Credits
-Agro Bank
-Agricultural loans
-Fisheries Financial Assistance Scheme
 Training Program
-By LKIM, FOA, FAMA and RRIM
-Cover agronomic practices, farm management, marketing, post-harvest handling process and
technology
 Institutional Development Program

-farmer’s organization, fisherman’s association, and farmer’s cooperative
(1992-1991)
Main objective:
 Maximization of income through the optimal utilization of resources
Specific objectives:
 Balanced development between agricultural and other sectors
 Enhancement of integration with other economic sectors
 Expansion and development of food industry
 Wider and effective participation of Bumiputera in modern and commercial
agriculture
 Attainable of sustainable development
(1992-1991) cont.
Strategy:
 Optimized resources
- Fully utilized the factors of production
- Diversify activity
 Development of agro-based industries and R&D
- integration with manufacturing industry
 Greater private sector participation
- To be a competitive and efficient sector
OVERVIEW OF AGRICULTURE
POLICY:
(1992-1991)
Strategy (cont.): cont.
 Reformed marketing
- International marketing
 Involvement in food production
- Increase self-sufficient by increasing food production
 Human resource development
- Increased productivity of land and labor
- Developing existing agricultural land
 Promotion of farmers’ institutions
POLICY:
(1998-2010)
Main objective:
Maximization of income through the optimal utilization of resources
Specific Objective:
Enhance food security
Increase productivity and competitiveness
Deepen linkages with other sectors
Create new sources of growth for the sector
Conserve and utilize natural resources on a sustainable basis
POLICY:
(1998-2010)
Strategy:
cont.
New approaches:
Agro-forestry approaches
Agriculture and forestry products at same land

- for example, rubber estate, sentang trees and tongkat ali be grown together
- Advantage: Reduce the need to cut down trees, Full use of existing land, Better income
Product-based approaches
Key products and markets are identified based on market demand, preferences, potential and consumer
taste
Example: halal food from livestock industry
NATIONAL AGRO FOOD POLICY
Introduction
 The 10-year National Agro-Food Policy was approved by the Malaysian Cabinet on
28 September 2011, effectively replacing the National Agriculture Policy. This
policy has been put in place to address the issue of food supply in Malaysia. With
this policy, it guarantees that there will be a sufficient amount of food supplies which
would also be safe for consumption in our country.
 In line with the effort to develop Malaysia as a high-income nation, it is anticipated

that the National Agro-Food Policy will increase the revenue of farmers as well as
agro-entrepreneurs. This, in turn, will allow the agro-sector to develop into a steady
and resilient industry
NATIONAL AGRO-FOOD POLICY cont.
Objective
 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 change
 Develop human capital
 Strengthen R&D activities, innovation and technology
OLD AGRICULTURAL VS. NEW
AGRICULTURAL
Old agricultural
 Old agricultural uses traditional farming system which is technically and technologically primitive.
 The land is farmed to provide sustenance; everything that is produced is needed for survival
(subsistence).
 Malaysia inherit the old agricultural activities from British, which focused on rubber and food
production to meet the domestic demand.
 Production was in small scale using labour intensive, thus limited the growth and production.
OLD AGRICULTURAL VS. NEW
AGRICULTURAL cont.
New agricultural
 New agricultural uses modern and advance technology with less labour intensive.
 The modern Malaysian agricultural sector focused on the production of two major categories
of commodities:
 Agricultural-industrial commodities: refers to agricultural commodities that have a higher percentage
of entering the processing or manufacturing line and have more commercial value. (input for the
processing activities). For example crude palm oil, palm kernel oil, natural rubber, sawlogs, cocoa,
pineapples, tobacco, coconuts and pepper.
 Food commodities: examples; rice, vegetables, fruits, fisheries and livestock (poultry, eggs, beef,
mutton, pork, milk…).
 The performance of the new agricultural sector will depend on 2 main factors; farm
productivity and value added. The value added of the agricultural sector increases as more
commodities enter the processing line.
OLD NEW
AGRICULTURAL AGRICULTURAL
 Traditional used hand  Modern used machine
 Traditional is small scale  Modern used big scale
 Traditional used organic  Modern used chemical
 Traditional is run by small scale of farmer  Run by many stakeholder like farmers and
investors.
 Traditional has negligible threat to
 Process environmental threat such as land
environment
clearing, carbon emission.

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CHAPTER 4

2. Diversifying and shielding of economy

3. Development in rural area

5. Improve balance of trade

 Focused more on export crops

 Replanting and rehabilitation

 Institutional Development Program

Agriculture and forestry products at same land

 In line with the effort to develop Malaysia as a high-income nation, it is anticipated

 Traditional is small scale  Modern used big scale

 Traditional used organic  Modern used chemical

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