Lecture 5

Agricultural
Practices of
Malaysia

Introduction
Agriculture contributions in economy
growth:
1957 :45% GDP; 80.3% employment.
2010 : 7.52% GDP; 11.8% employment.

In 9th Malaysia Plan: Third engine of

growth.

Historical Development of
Malaysian Agriculture
Pre-independence:
Rubber plantations.
Ex: Dunlop; Guthrie; Harrisons and
Crossfield.

Follows by: Tea, cocoa, coffee.

Malay: rice, fruits and other crops.

During Pre-independence
Coffee plantation

Rubber plantation
http://www.lgm.gov.my/general/NRHistory.aspx

Paddy
http://www.myfareast.org/Malaysia/photos.html

Tea
plantation
http://www.everyculture.com
/Ja-Ma/Malaysia.html

Post-Independence (1957-1970)
FELDA and FELCRA

Smallholders : subsistence crops

cash crops.
New Economic Policy (1970-1984):
Addressed income disparity between races by:
intensifying and expanding FELDA & FELCRA program.
Subsidies for rice.

Rubber smallholding organized efficiently by

RISDA.
Malaysia was top producers for Natural Rubber
and Palm oil

http://www.felcra.com.my/home
http://www.felda.net.my/feldav3/

http://www.risda.gov.my/web/guest/home

1st National Agricultural Policy (NAP)

(1984- 1991)
Objective: Linking agricultural
production with agro-based industries

2nd NAP (1992-2010)

Address issues on: labour and
capital competition.
Increase efficiency and productivity

NAP 3 (1998-2010)
Introduced product-based approach
and ensuring food security.
Agriculture land Use
2004:, 6.2 million ha for agriculture
60.6% for oil palm
20% for rubber.

Agriculture Land Use

Malaysian Agricultures
Characteristics
1. Estate
Highly commercialized
Efficiently managed
Land larger than 40.5ha or 100 acres.
Owned by private companies or public
land development agencies.
Involve in : cocoa, rubber and oil palm

Rubber estate in Tanjung

Tualang, Perak
(http://ipoh.olx.com.my/rubber-estate-for-sale-in-tanjung-tualang-perakmalaysia-freehold-iid-155520120)

Palm oil estate in

Malaysia
(http://www.glenealy.com.my/company_overview.html)

2. Small holder
Less commercialized
Average farm size 1.45ha
Crops: rice, fruits and vegetables

Dragon fruit & star fruit

farm in Malaysia
(http://www.freshplaza.com/news_detail.asp?id=27017)

Small scale Tropical fruit farm in

Malaysia
(http://anyonecaneat.com/2011/07/19/heaven-and-hell-on-a-tropical-fruit-farmpenang-malaysia/)

Industrial Crops
1. Oil Palm (Elaeis guianeensis)
Largest planted crop in Malaysia
Origin: Sierra Leone, Africa
First planted in Malaysia in 1917.
Harvested at 25-30 months after
planting
Economic life span: 20 years
Malaysia: 39% for palm oil production
& 44% for exports

 Fruits pulp (palm oil) & Kernel (palm kernel oil)

100kg of fruit bunches produces: 22kg palm oil
& 1.7kg palm kernel oil
60% plantation: 40% small holders
Contributed 10% of Malaysias total export
value

Fruit Bunches: weight

15-28kg/bunch

Kernel

Pulp

2. RUBBER (Hevea brasiliensis)

First major plantation crop
Introduced in 1877, from Amazon Basin,
Brazil.
Dominant plantation for 80 years.
Second major crop in the country
Factors to switched to oil palm:
Declining price
Increasing cost production
Declining labour

97% planted by smallholder

3. COCONUT
(Cocos nucifera)
4th largest crop in the
country
1981: 409,348 ha
1995: 248,380 ha
2007:172,000
Factors for area declining
Palm oil for cooking
Low income
Small farm size
Labour

Value-added products to
rejuvenate the coconut industry:
Virgin coconut oil(VCO)
RM40-150/kg
Used for:
Skin care, hair care, general
good health and antimicrobial

4. COCOA (Theobroma cacao)

Most planting areas in Sabah
Processing in Peninsular Malaysia
Malaysia cocoa special characteristic:
High melting point
Planting area reducing, processing
increasing.
5th largest cocoa processor in the world
Workers pruning cocoa
plants in Sabah Malaysia
(http://miraimages.photoshelter.com/image/I0000J8G._8fuHcI)

Other Industrial Crops

COFFEE
Smallholder in Johor and Selangor.
Types: Liberica; Robusta; Arabica
SUGARCANE
In Perlis and Kedah
Fulfilled only 10% local consumption.
Import from Australia, Fiji and Thailand
TEA
In Cameron Highlands, Selangor and Perak
Type grown: Assam

RICE (Oryza sativa)

3rd largest planted crop in the coutnry
Mainly in Peninsular Malaysia at 8 granary
areas:
I. Kuala Muda in Kedah/Perlis (MADA)
II. Kemubu, Kelantan (KADA)
III. Seberang Perai, Penang
IV. Kerian/ Sg Manik, Perak
V. Barat Laut, Selangor
VI. Kemasin Semarak, Bachok / Kota Bahru
VII.Besut, Terengganu (KETARA)
VIII.Seberang Perak
Contributed 70% of national rice production
15% rice from non-irrigated area (Sabah and
Sarawak)

FRUITS
Small holders industry with 270,000 farmers.
Area planted is increasing since 1985 until
now.
Export values:
1985:RM182.4 million
1995: RM335.6 million

Types of fruits exported:

Watermelon; papaya; star fruit and banana.

Factors for increases in area and production:

High demand for local and export
Value-added processing (down-streaming activities)

PINEAPPLE (Ananas comosus)

Smallholders(38%) and Plantations (62%)
Areas are declining
VEGETABLES
Smallholders, avg farm size < 1 ha.
Main areas: Johor, Perak, Kelantan,
Pahang.
Export value: RM160 million(cucumber,
spinach, long beans, chillin, kailan, sawi)
Import value: RM242 million (onion,
shallot, pototo, chilli, cabbage)

Coffee plantation in
Johor
(http://sec2aljmuar.blogspot.com/)

Sugarcane farm in Chupping

Perlis
(http://burtburdy.blogspot.com/2009/09/ladang-tebu-di-chupping-perlis.html)

Tea plantation in Cameron

Highlands Pahang
(http://mile.mmu.edu.my/orion/nadiaabdullah/nik-norfatihah-bt-nikmusthafa-1091105764/)

Scenery of Paddy
field in Kuala Muda
Kedah
(http://stanza-alam.blogspot.com/2010/05/gunung-jerai.html)

Paddy field in Pulau

Pinang
(http://baja-harimau.blogspot.com/2011/06/baja-harimaumulai-digunakan-oleh.html)

A worker collecting
pineapples from Ayer Hitam
Pineapple plantation in
Johor
(http://www.foodessa.com/2010/03/are-drugs-in-your-pineappletropical.html)

A worker works in a small

scale vegetable farm in
Kampung Air Panas
Malaysia
(http://www.flickr.com/photos/chongkin/6246016728/)

FLORICULTURE
Net value RM290 million in 2010
(0.15% GDP)
Cut flowers; orchids; non-orchids
Area planted is increasing
Important areas: Johor, CH, selanogr.
Most planted commodity in 2010:
Orchids (RM104.1million ), non orchid
(RM129.5 Million)
Examples of floriculture
in Malaysia
(http://animhosnan.blogspot.com/2011/01/floriculture-in-malaysia.html)

LIVESTOCK
Non-ruminant: Poultry and swine
Higly commercialised and high technology.
Contributed 72% in country livestock production
Ruminant: Cow, dairy, goat etc
Smallholders and low technology

Contribution: 8% in livestock production

SSL not achieved (less than 30%)
Gov. targeted 40% SSL by 2015.
How? Integrating cattle in farm and feedlot

FISHERIES & AQUACULTURE

Aquaculture: farming of aquatic
organisms including fish, mollusks,
curstaceans and aquatic plants.
Important commodity: Prawn
Steady growth since 2000.
Value in 2009:
Fresh water fish:RM 2.32 billion.
Captured fish: RM6.29 billion

Others: seaweed (algaculture), pearl

Livestock farming in
Malaysia
(photos courtesy of Unit IT Faculty of Agriculture UPM)

Aquaculture
industry in Malaysia
(photo courtesy of Unit IT Faculty of Agriculture
UPM (top) & Prof Ritas file (right)

Factors to growth
livestock production: shifting from
traditional to commercial farming practices
Increase integrated beef cattle farming in
rubber and oil palm plantations.
Poultry production: integrated poultry
farming system introduced by fast-food chains
such as Kentucky Fried Chicken.
Poultry is the most popular meat consumed due
to pricing and religious acceptability.
fruits and vegetables: government efforts in
consolidating small orchards into larger
organized farms and instituting group farming
projects.

New Source of Growth

Herbs & spices; Pharmaceuticals, Natural Products
Rapid growth at 10-15% per annum.
Targeted as growth sector after Communication
Technology.
Market value in 2010: RM7 billion
Expected value in 2020: RM29 billion
Reason high value: Awareness on health care with
natural products.
Currently, planted by small holders.
Gov. target: large scale herbal plantation and ECER

Tongkat Ali
Antimalarial; aphrodisiac;
anti-diabetic; antimicrobial

Hempedu Bumi
Treatment for gastro-intestinal tract
Fever, herpes, sore throat

Kacip Fatimah:
Facilitate childbirth; post-partum medication; rheumatism

Misai Kucing:
Analgesic; diuretic;
bronchitis; small pox;
diarrhoea

Pegaga:
Heal wounds; imporve
mental clarity; treat skin; high
bollod pressure; rheumatism;
fever

Dukung anak:
Treat kidney stone; malaria; asthma;
increase appetite; treat diabeties;
hypertension; itchiness

Mas Cotek:
Help womb contraction; aphrodisiac for
women and men; reduce cholestorol
and blood sugar level

Agricultural Marketing
Export Crop Sector
Palm Oil: 3 main types oil palm
producers:
Independent small holders: low
productivity and sell through middleman
Producers in land development scheme:
production and marketing follow the parent
institution
Private estates: very organized. Processed
own produces.

 Food Sector:
Small farms and minimal involvement
by government or corporate sectors.
Marketing usually through middlemen
/ wholesaler.
Except Rice: have gov. intervention

Input
Import

Local Producer
Input supplier

CONVENTIONAL
AGRI-FOOD
MARKETING

Assembler/Transporter
/Commission Agent

Wholesalers

Small scale
retailers

Import

Large scale
Retailers

Consumers

Agri-Food New Supply Chain

Transformation due to external and
domestic drivers.
External: rapid development of large
retail chains.
In 2005: 81 hypermarkets in
Malaysia, 83% are foreign-owned.
Domestic: changes in consumer
income, consumption and lifestyes.

Producers

NEW FOOD
SUPPLY
CHAIN
Contract
farming

Packing
house

Wholesalers

Large scale retailers

Consumers

Import

Federal Agricultural Marketing

Authority (FAMA)
Responsibility: supervision; coordination;
regulation and improvement of the
marketing of agricultural products for
domestic, export and import markets.
Marketing Strategies:
Farmers Market
Business on wheels

http://www.fama.gov.my/web/guest/home

Summary
Production and area for industrial crops
such as rubber; cocoa, coconut and
pineapple are reducing. Except for the
fruits area are increasing
growth of the fruit industry are bright
due to the expected increase in domestic
consumption of both fresh and processed
fruits and expanding world demand for
tropical fresh and processed fruits

 demand for rice in both international

and domestic markets is expected to
increase. (1.8 mill to 2.3 mill in
2010)
to concentrate on production of high
quality fresh vegetables for both
domestic and export markets and
also on a few selected vegetables for
processing.