PRT 2008 Lecture 10

Agricultural contribution to the economy

Agricultural contribution Structural changes to the Malaysian economy Structural changes to the Malaysian economy Malaysian agriculture Malaysian agriculture

Structural changes Best described in terms of contribution of various sectors to the GDP Best described in terms of contribution of various sectors to the GDP The primary sector are agriculture, forestry, fishing, mining, etc The primary sector are agriculture, forestry, fishing, mining, etc Secondary sector is manufacturing Secondary sector is manufacturing Tertiary sector is service Tertiary sector is service

Cont. The tertiary sector is the highest contributor to the GDP since 1965 The tertiary sector is the highest contributor to the GDP since 1965 In 1965 it was 45 % %. In 2005 expected to be 54 % In 1965 it was 45 % %. In 2005 expected to be 54 % Relative importance of primary sector has decreased since 1970 Relative importance of primary sector has decreased since 1970

Cont. Malaysian economy grew by 5.1 % per year in the 1960s Malaysian economy grew by 5.1 % per year in the 1960s It grew by 7.8 % in 1970s It grew by 7.8 % in 1970s In 1980s by 5.9 % In 1980s by 5.9 % It grew by 8.7 % in It grew by 8.7 % in It is affected by the 1998 recession It is affected by the 1998 recession During , it recorded a credible performance During , it recorded a credible performance In 2005 – GDP growth was % In 2005 – GDP growth was %

Malaysian agriculture Dualistic system – Plantation (estate) and smallholder Dualistic system – Plantation (estate) and smallholder Estate - > 40 ha Estate - > 40 ha Plantation is systematic, using modern technologies, hired labor, e.g. rubber, oil palm, tea Plantation is systematic, using modern technologies, hired labor, e.g. rubber, oil palm, tea Smallholders – subsistence farming and monocropping Smallholders – subsistence farming and monocropping

Cont. Malaysia’s agricultural development is guided by the National Agricultural Policy (NAP) Malaysia’s agricultural development is guided by the National Agricultural Policy (NAP) The development programs are aimed at expanding food production, increasing export and ensuring sustainable supply The development programs are aimed at expanding food production, increasing export and ensuring sustainable supply

Agricultural growth 7 th Malaysia Plan ( ) the growth was 1.2 % annually (target 1.9) 7 th Malaysia Plan ( ) the growth was 1.2 % annually (target 1.9) 8 th MP, the target was 3 % annually 8 th MP, the target was 3 % annually , it was 1.5 % , it was 1.5 % In absolute terms, the value added increased by USD 4.74 b (2000), 4.97 b (2003) and expected to be 5.24 b (2005) In absolute terms, the value added increased by USD 4.74 b (2000), 4.97 b (2003) and expected to be 5.24 b (2005)

Land utilization for agriculture Agriculture land increased from 5.7 m ha (1995) to 6 m ha (2000) Agriculture land increased from 5.7 m ha (1995) to 6 m ha (2000) Due to opening of land in Sabah and Sarawak Due to opening of land in Sabah and Sarawak Increase for oil palm (now 4 m ha), pepper, vegetables, fruits, paddy Increase for oil palm (now 4 m ha), pepper, vegetables, fruits, paddy Decrease for rubber and cocoa. Between , 430,800 ha were converted to oil palm Decrease for rubber and cocoa. Between , 430,800 ha were converted to oil palm

Agricultural production , production of CPO, pepper and cut flowers indicated remarkable growth due to favorable price and expanding market , production of CPO, pepper and cut flowers indicated remarkable growth due to favorable price and expanding market Cocoa suffered a negative growth of 6.3 % due to pest and diseases. It is now recovering. Cocoa suffered a negative growth of 6.3 % due to pest and diseases. It is now recovering. Livestock, aquaculture and milk production showed a promising growth in the 8 th MP. Livestock, aquaculture and milk production showed a promising growth in the 8 th MP.