Development of Agriculture Sector in MalaysiaPresentation Transcript
I NTRODUCTION• The agricultural sector has contributed to the growth and major contributors to national income and export earnings• It‟s become basis of economic growth and main contributor in national economy prior to the 1970s• The agricultural sector initially derived from the increase in the production of livestock, fisheries, and other miscellaneous crops• The agricultural industry more valuable cash crops owing to the increase in earnings from major commodities such as palm oil, rubber and food commodities• It has enabled the sector to retain its workforce and shore up the economic downturn of the 1997 financial crisis
S CENARIO OF THE N ATIONAL A GRICULTURAL S ECTORPre-Independence Period (1800-1957) After Independence (1957) Before Independence, the agricultural sector was • The period after Independence until 1970 characterized by dualism between the plantation saw increased government intervention sector and the smallholder sector. which to improve productivity and Plantation sector was dominated largely by income in the subsistence sector and Europeans and it specialized in a few reduce high dependence on rubber for commercial crops such as rubber and palm oil export earnings The smallholder sector were owned mostly by • Malaysia inherited an economy largely Malay peasants who were involved in traditional based on the export of tin and rubber rice cultivation. Chinese and Indian immigrants • Continued with large-scale planting grew a variety of crops on small plots such as (with some diversification) of export pepper, tapioca and vegetables commodity cash crops such as oil palm The composition of agricultural crops during this era • Started cultivating oil palm because the can divided into 2 categories: major foreign plantations seized upon the 1. Major crops (rubber, palm oil & rice) opportunity of strong export demand for Provide most of the export earning for the country vegetable oils and shorter immaturity 2. Minor crops (food crops, fruits & spices) period of oil palm compared to rubber Create employment & income for the smallholder tree Before Independence, there were distinct differences in terms of economic organization and technology • Agriculture led by rubber and palm oil between smallholder subsistence and plantation continued to be the dominant sector. As a result, the productivity and income levels contributor of the sectors differed greatly
T HE I MPORTANCE OF A GRICULTURAL S ECTOR Backbone of the economy at independence, it contributed 39.3% to GDP, generated 58.3% of a total employment and about 50.0% to export earnings. After independence, economy underwent a diversification, so the contribution declined. In 1980, still contributed 22.9% of total GDP, 39.7 % to employment and less than 22.9% to export earning.
T HE I MPORTANCE OF A GRICULTURAL S ECTOR Diversifying and shielding the economy- In recent years, agriculture is considered a vital sector to the economy of Malaysia it play its role in diversifying and shielding the economy from external shock.- The increase in earnings of major commodities, particularly palm oil and pepper as well as food commodities, enabled the sector to retain its workforce and withstand the economic downturn of 1997-1998. Development to rural areas- By promoting the agricultural sector, we are bringing development to rural areas thus reducing imbalance in urban-rural development especially in the less developed states.
T HE I MPORTANCE OF A GRICULTURAL S ECTOR Increased self-sufficiency Improve balance of trade The food import bill has been a long standing- In the past, the country relied on other problem in Malaysia. In 1970, the country had a countries to meet a significant proportion deficit of RM407.8 million and the food import of our food needs. However lately, bill has been growing steadily. In 2000, import countries which have traditionally of food items reached RM13.0 billion and supplied us with food experienced expected to increase to RM22.0 billion in 2005 growing population and are rapidly industrializing (eg Thailand, Vietnam, Indonesia). They may not be able to Increased food production supply us food as much as before. The sector contributed not only as a supplier Furthermore, currently Malaysia is only of raw materials to the resource-based self-sufficient in the production of eggs, industries, but also in term of food poultry and fruits. For food security production and Malaysia aim to be reasons, we must try to increase self- centre/hub for ‘halal’ food production sufficiency in other foods especially meet, rice and milk.
A GRICULTURAL P ROGRAMMESIn-Situ Development-is the effort by the government to improve productivity in existing agricultural areas.-It is comprised replanting, crop diversification and integrated agricultural development projects(IADPs).- Agricultural consolidation and rehabilitation programmes were also implemented under in- situ development to improve yield and productivity in the small holdings.IADP- Designed to revitalize and rehabilitate in-situ existing agricultural areas facing problems of low productivity, low income and high rate of poverty.- Some IADPs started as large-scale irrigation projects aimed at increasing productivity and income of farmers and to increase self-sufficiency of rice production.- Improved irrigation, drainage facilities, complementary inputs and other agricultural support services such as subsidies, credit and marketing were introduced.- Example of IADP ; Muda, Kemubu, Besut, Sungai Manik and Kelantan Utara.- Other IADPs are based on mixed crops, the replanting of rubber, coconut, pineapple or rehabilitation through diversification into more profitable crops such as palm oil and cocoa as in Johor Barat, Pahang Barat and Negeri Sembilan Timur.
A GRICULTURAL P ROGRAMMESLand Consolidation and Rehabilitation- Land consolidation aims at consolidating enlarged fragmented and uneconomic holdings. Uneconomic holding has been identified as a major factor contributing to low productivity and low income among farmers. Enlarged farms benefit smallhalders.- FELCRA, establish in 1966, has been entrusted the role of land consolidation and rehabilitation such as consolidation od unused government land, rehabilitation of unsuccessful state- managed schemes and management of youth land development programmes.- By 1985, total land development and rehabilitation under FELCRA was 81.8 thousand hectares under RISDA and 448.3 thousand hectares under other state agencies. By the late 1970s, with increasing scarcity of land in Peninsular Malaysia, FELDA began expanding its scope of activity to Sabah and Sarawak.
TABLE : L AND D EVELOP M E NT AND R EHAB I L ITAT ION BY F ED ER A L AND S TATE A GENC IE S . Agencies RMK 2 RMK 3 RMK 4 Total 1971-1975 1976 - 1980 1981-1985 FELCRA 23.6 27.1 31.1 81.8 RISDA 19.2 12.3 9.8 41.3Others State 144.0 146.2 158.0 448.2 Agencies Total 186.8 185.6 198.9 571.3
R&D A CTIVITIES TA B L E : D E V E L O P M E N T A L L O C AT I O N F O R A G R I C U LT U R E 1 9 9 6 - 2 0 0 5 ( R M MILLION) Programme/Subsector 7MP 8MP Expenditure AllocationNew Land Development 475.9 274.2Regional Development 807.0 570.1In-situ Land Development 2941.9 2265.1Forestry 143.8 225.2Fishery 456.3 414.3Livestock 176.3 127.5Support Services 354.3 719.0Irrigation and Flood Mitigation 1929.9 2170.2Other programmes 844.9 1094.4Total 8139.3 7860.0
TABLE : PUBLIC D EVELOP M E NT E XPEND I TU R E FOR A GRICULT U R A L P ROGRA M M E S IN THE F IVE - YEAR P LANS (R M BILLIO N )Programme 1ST MP 2ND MP 3rd MP 4th MP 5th MP 6th MP 7th MP 8th MPIn-Situ 0.6 0.4 1.3 3.0 6.3 3.6 3.0 2.3Land 0.4 1.0 2.7 3.9 4.4 2.7 0.5 0.3DevelopmentOther 0.1 0.3 0.6 1.6 1.0 2.1 4.6 5.3ProgrammesTotal 1.1 1.7 4.6 8.5 11.7 8.4 8.1 7.9
A GRICULTURAL P ROGRAMMESAgricultural Support Services- Include R&D activities, marketing, agricultural credits, training and institutional development programme.
TABLES : R & D AC TIVI TI E S BY VAR IO US AGEN C I E S .Agencies R&D activitiesPORIM -Breeding new high-yielding varieties -Enhancing and diversifying palm oil utilization -Improving production efficiency -Promoting non-food applications of palm oilRRIM - production of new forms of natural rubber - New applications of rubber -Increasing productivity through the improvement of labour saving techniques -Breeding new high-yielding clones with shorter maturity periods, higher quality latex and rubber woodMCB -Focus on cocoa processing -Post-harvest technology -End product developmentMARDI -developing efficient farm management -Developing processing technologies for food sector -Breeding high-yielding and disease resistant varieties of paddy, durians, pineapple and tobacco.
TABLES : R&D ACTIVITIES BY VARIOUS AGENCIES . Agencies R&D activitiesMARDI -Introducing more modern and efficient processing technologies -Developing new method of packaging -Diversification and commercialization of agro-based industry -Intensifing transfer of technologyFRIM -Focus on forest plantations -Focus on energy from biomass (agricultural waste) -Developing wood processing technology -New forest end products -Developing fast-growing local species that produce quality timber
A GRICULTURAL P ROGRAMMESMarketing- Are directed at consolidating traditional markets, penetrating new markets and promoting product.-Example , new markets for palm oil have been establish inALgeria, Brazil, Cuba etc.-Rubber : traditional markets such as the United States and European Union wereconsolidated through export promotion programmes.-Rice : BERNAS is the body responsible for improving efficiency in the processing andmarketing of rice in the country.-MCB : promotes cocoa in overseas markets. Its has strengthen traditional market such asFrance, Germany and Netherlands and entered new markets such as the China.
A GRICULTURAL P ROGRAMMES- FAMA- Is responsible for securing markets base and looking at market potential for local produce, particularly fruits and vegetables. Also promoted horticultural products such as fruits amd flowers to East Asia, Europe and the Middle East and South Africa. Beside that , provide an information to the producer about market requirement and educate farmers how to plant, sort, clean, grade and pack their product.- Farmers’ market are the places where farmers can sell their produce directly to buyers.- FAMA also help local markets/farmers to market their product to distribution centre. The product are repacked, graded and branded for specific retailer and hypermarkets.
A GRICULTURAL P ROGRAMMESAgricultural credits- Bank Pertanian (BPM) provides agricultural credit to farmers and fishermen to enable them to expand agricultural activities as well as to venture into new areas while commercial bank and finance companies give agricultural loans to plantation companies.
A GRICULTURAL P ROGRAMMESTraining programmes-are provided by several agricultural agencies such as LKIM, FOA,FAMA and RRIM.- The training programmes cover several areas such as agronomicpractices, farm management, marketing, post-harvest handlingprocessing and agribusiness, while extension services include newagricultural technique and technologies to encourage more farmersand fishermen to used new and modern technologies to increaseproductivity.
A GRICULTURAL P ROGRAMMESThe Institutional Development Programme- Include farmers’ organization, fishermen’sassociations and farmers’ cooperatives. They wereestablish at national, state and local levels tomodernize the smallholder sector by encouragingactive participation of farmers and fishermen.
C ONTRIBUTION TO GDP The primary sector(agriculture, forestry and mining) made up contribution at the year of independence was 45% in comparison to the secondary sector’s(manufacturing and construction) 11% The share of the sector in the GDP decreased from 29.9% in 1970 to 22.9% in 1980, 18.7% in 1990. Thus in 1999, the agricultural sector accounted for 9.4% of the GDP , 8.4% in 2000 and decreased further to 8.3% in 2005 Despite the decline of agricultural contribution to GDP, its continues to receive high priority in national development planning. The reason is because hard-core poverty in this sector remains significant. Poverty eradication encompasses an important issue in national development progress. The agricultural sector is seen to be necessary or very important in reducing the urban-rural disparity gap
C ONTRIBUTION TO E MPLOYMENT Agricultural has increased job opportunities and created alternative sources of income. However, the total employment in the agricultural sector declined over the years while those in manufacturing increased. Agriculture was a major source of employment, providing 15.69% of total employment ,in 1998 and in 1999, 45.38% was rural based, of which 37% was involved in agriculture. In 2000, 15.3% of total employment stated a 1423 thousand employee and tend to decrease in 2005(13.3%) and 2010(10.9%) These reduction in percentage of the workforce obviously that employment in the agriculture sector contracted due to the increased use of labour-saving technologies, thus causing labour shortage as local labour force moved into economic sector for higher wages; the beginning of mechanization in the sector and improved farm management The employment in this sector was expected to decline further due to low rubber prices and scarcity of logging areas
C ONTRIBUTION TO THE I MPORT & E XPORT Agricultural is an important foreign exchange earner. Export earnings increased from RM 13.9 billion in 1985 to RM 35.4 billion in 1995. Total share in exports, declined from 36.7 to 19.2% in the same period Malaysia has a significant food import bill which rose to RM 13 billion in 2000 from RM 7.8 billion in 1995, owing to the depreciation of the Malaysian ringgit and changes in consumer taste kilogramme, down from 319 sen a kilogramme in 1997 Palm Oil Rubber Paddy•The major export earning •Dampening of rubber •Rice is the staple and securitycomes from palm oil exports; prices worldwide has food crop of the country and thecomprised palm oil, palm resulted in an average price 3rd widely planted crop inkernel oil, palm kernel cake, for all grades of rubber at Malaysia after palm oil andoleo chemicals and finished 283 sen rubberproducts exceeded RM 6.3 •High competition frombillion in 1993 to RM 12.89 imported rice causes problemsbillion in 1997 to farmers since domestic farmers (the cost of production much higher than the neighboring countries & insufficient supply
Problem of Agricultural SectorIncreasing labor shortage, wages & cost of production as well as ageing farm labor & preferences for non-farm jobsa. Labor shortage resulted in large acreage of idle agricultural landb. Cost of production which includes wages and inputs is relatively high compares to countries like Thailand and Vietnamc. The agricultural sector has become extremely dependent on foreign labor. In 2003, the plantation sector employed 327490 registered foreign workers or about 23% of total agriculture workforce. It is forecast the figures will increase as many Malaysians prefer to work in other sectorNot enough R&D in food cropsAgricultural is very vulnerable to factors like changes in climate, disease and pest infestation. In the case of large scale aquaculture, disease outbreaks will be a major problem unless and until quality control, good management practices and disease control are taken care of
Poor productivity and quality of agricultural Shrinking acreage of land under agriculture product a. The agriculture sector competes with other sectors for land when the economya. Slow pace of replanting. Malaysia palms that moves toward industrialization. are more than 25 years will become less productivity and hence increase cost of harvesting. Replanting needs at least 5 years b. The cost of production of agricultural before they can start producing yield. products in the neighboring countries is cheaper, this would affect internationalb. Traditional farming obviously yield lower demand for local agricultural products. productivity and quality. Traditional farming Lower cost of land and labor of the still makes up a bulk of our agricultural neighboring countries would force sector. Malaysia to intensify on adding value to their product output (better yield Remedy / Solution: outcome). i. Agricultural programs focus on c. Thus the government should gradually transforming traditional farming into withdraw subsidies to promote commercial farming to increase efficiency and prepare for challenges of productivity, competitiveness with market globalization. particular focus on commercialization which includes marketing. ii. Consolidate small farm via group- farming concept
Relatively low growth rate (compared to Lacks investors & Attitude problems other sector) a. The agriculture sector in Malaysia lacks of investors because it is risk venture due to the A lack of capital impedes its rapid perishable factor. As in the food processing transformation, structural change and sector, high capital investment is a constraint integration with manufacturing. A slow to investors. rate of technological development and innovation with regard to product b. The attitude of farmers has not been development, process and packaging encouraging. For example, high-yield breeds also contributed to low growth rate have been introduced to farmers but they tend to neglect their farms and do not manage them Export-oriented crops Despite efforts to diversify, Malaysian agriculture has remained predominantly export-oriented. By 1990, about 70% of the total cultivated agricultural area and 75% of the gross crop out-put could be attributed to the perennial export crops of rubber, palm oil and cocoa
M EASURE TO R EDUCE THE A GRICULTURAL P ROBLEMS Problems of land size : smallholders are encouraged to practice group farming by consolidating individual plots into a single farm. Increase food prodcution : systematic and integrated approach (similar to rubber and palm oil plantation) should be created for other food crops and more should be allocated for R&D in food crops. Encourage large scale and organized farming, intensifying land used, improving agronomic practices, as well as using modern technologies and management. Encourage successful farming and to overcome the problems of ageing small scale farmers: DOA has introduced the Incubation Programme to create a group of young, skilled and motivated entrepreneurs.
M EASURE TO R EDUCE THE A GRICULTURAL P ROBLEMS Increase rate of development in rural areas : to discourage rural youth from migrating to urban areas for better paying jobs. They can also have additional sources of income. Production of primary commodities will be reoriented to improve productivity and competitiveness through integrated programme with livestock, wider crop practices and mechanization (foreign workers should be a short- term measure. To achieved a positive balanced of trade and reduced food import and increased export : by producing more food not only from the fruits and vegetables sub-sector but also the livestock and fisheries sub-sectors. Promoted the production of natural products such as medical plants as well as non-forest products such as herbs and aloevera as new sources of growth for local and export markets.
M EASURE TO R EDUCE THE A GRICULTURAL P ROBLEMS Encourage private sector investment : introduced several incentives example, by encouraging the production of quality and safe product through the scheme called the Farm Accreditation Scheme Malaysia or Skim Akreditasi Ladang Malaysia (SALM). The DOA is working towards making the SALM certification acceptable to importing countries.
FAMA (Federal Agricultural marketing Authority) Was formed in 30 September 1965, to monitor, coordinate, control and develop product marketing of Malaysian agriculture, including import and export Agricultural products under FAMA services field are vegetables, fruits, grain and herbal, livestock and aquaculture Functions: • Coordinate agriculture marketing activity both in private sector or department / government agency • Improve marketing system and expand new market of Malaysian agriculture development • Collaborating with private sector and department / government agency to create efficient and effective agriculture marketing system • Develop an efficient management in agriculture industry, marketing activity or agricultural products processing • Involve directly in agriculture industry, especially in marketing activity and products processing.
FELCRA (Federal land Consolidation & LKIM (Fisheries Development Authority of Rehabilitation Authority) Malaysia) Establish in 1966 Its objective is to develop rural sector by helping Is an authorized body under the Ministry of its community to participate in national Agriculture and Agriculture Base Industry economic activities, thus improving their that was incorporated under Act 49, standard of living Malaysia Fisheries Development Board act Since September 1st,1997, FELCRA is known as 1971 FELCRA Berhad due to its corporatization. It is no longer a Statutory body but has becomes a This act took effect on all states within fully Government owned company. Peninsular Malaysia on November 1st 1971; in Sarawak on July 1st 1973 and in Sabah on With the change of its corporate entity, August 1st 1995 FELCRA now able explore new business opportunities, in line with national development 2 main objectives: aspiration Armed with plantation management and core 1. The first was to raise the income levels activities skills, FELCRA is now diversifying its of fishermen activities into industrial and service sectors as well as other growing business areas 2. Secondly, to develop and expand the fisheries industry, including deep-sea fishing, processing and marketing.
MADA (Muda Agricultural Development Authority) Establish on Jun 30th 1970 Was born under an emergency decree with the initial Bahasa Malaysia name “Pihak Berkuasa Kemajuan Pertanian Muda”. Its inauguration was officiated by the late Tun Hj. Abdul Razak Hussein who was the acting Prime Minister of Malaysia as well as the acting Director of Operations in a ceremony at the Balai Besar Building in Alor Star, Kedah Darul Aman. The formation of MADA was approved by Parliament under Act No. 70, the Muda Agricultural Development Authority Act, 1972. Under this Act, the duties of MADA were outlined as follows:- To improve, encourage, assist and manage economic development projects in the Muda area, and to plan and manage within the Muda area all agricultural development as assigned to it by the State Governments of Kedah and Perlis. Two main objectives were set by MADA based on the aspects of human development and commodity. The objectives were:- To improve the socio-economic well being of a large portion of the rural population To increase the rice production for national requirements.
Rubber Research Institute of Malaysia (RRIM) FRIM (Forest Research Institute Malaysia) One of the leading institutions in tropical Is the custodian of the rubber industry in forestry research, both within the country Malaysia and abroad Established on 1st January 1998, it has Founded by British colonial forest under its fold three well establish agencies scientist in 1929, the former Forest (RRIM, MRRDB & MRELB), which are Research Institute with Dr. F.W. now merged into one, which have Foxworthy as its first chief research contributed significantly to the officer, became a statutory body governed development of the rubber industry for by the Malaysia Forestry Research and the last 78 years Development Board under the Ministry of Primary Industries in 1985 and then in The primary objectives is to assist in the 2004, FRIM became a statutory body development and modernization of the governed under Ministry of Natural Malaysian rubber industry in all aspects Resources and Environment from cultivation of the rubber tree, the Promote sustainable management and extraction and processing of its raw optimal use of forest resources by rubber, the manufacture of rubber generating knowledge and technology products and the marketing of rubber and through research, development and rubber products application
FELDA (Federal Land Development Authority) MCB (Malaysian Cocoa Board) Established on 1 July 1956 under the Land • The Act for the establishment of the MCB Development Ordinance was passed by Parliament in July 1988 and was gazette as ACT 343 on 8 September, It‟s functions provided under the Act 1988. MCB was officially in operation on 18 (Amendment 1991) are as follows: July, 1989. - Carry out and implement land • The Malaysian Cocoa Board (MCB) is a development projects federal statutory research and development agency under the Ministry of Plantation - Promote, facilitate and undertake the Industries and Commodities. development, management and • The main objective is to develop the cocoa economic, social, agriculture, industry in Malaysia to be well integrated settlements, industrial and commercial and competitive in the global market. as well as other ancillary activities in the areas where authorized Felda land • The main functions cover: development projects or areas owned - To conduct and promote research on by Felda and the company. production, processing, storage and consumption; Starting in April 2004, Felda is placed under - To conduct and coordinate activities and the Prime Minister and Minister responsible policies on research; for the Felda is Dato Sri Mohd Najib Tun - To improve quality; Abdul Razak, the Prime Minister of Malaysia - To regulate marketing activities;
Malaysia Agricultural Research & Development Institute (MARDI) Established at the early establishment 1971-1972 With the main objectives of generating and promoting new, appropriate and efficient technologies towards the advancement of the food, agriculture, food and agro-based industries Managed and guided by the regulations and policies set by the MARDI Governing Board and consented by the Minister of Agriculture And Agro-Based Industry. In matters pertaining to finance the consensus of the Minister of Finance is also obligatory Whereas, the Scientific Council ensures that MARDI technical programs attain the highest quality and level of competence Fulfill with the functions: To conduct researches in the fields of science, technical, economy, and social with regards to Production, utilization and processing of all crops (except rubber, oil palm and cocoa), livestock and food and also Integrated farming Provision of various forms of trainings to cater for the development of the food, agriculture and agro-based industry To conduct commercial research and production To develop, promote and exploit the research findings To provide extension services to the agriculture, food and agro-based industries
National PolicyGreen Book Strategy Introduced by 2nd Prime Minister, Tun Abdul Razak Hussein on Dec 20, 1974 which in based concept of „backyard farming‟ As one of the strategies under Food Security Policy involving a total allocation of RM 4 billion to ensure adequate food supply and stable food prices Emphasized more on greater involvement by the people in agriculture and vegetable farming for their own consumption while the rest will be sold to the public Main objective is to maximize land development involving short-term crops, group farming, breeding of fresh water fish and enhancing the marketing of agricultural product beside increasing national food production and raising the people‟s income to reduce inflation
•Was introduced in 1984 to modernized & revitalized the Objectives: agriculture sector, to lesson •The maximization of income poverty & raise efficiency through optimal utilization of •Focus on expansionary resources in the sector policy on export crop i.e. oil •Increase the food production for palm & cocoa local market such as paddy, vegetables, fruits & poultryMain strategies involved (land development, In-situdevelopment, support services)Strategies:•Government invested heavily on institutional building• new land developments for oil palm & cocoa(by Felda, Risda, Felcra)• in-situ development to resolve uneconomic farm size& low productivity among small holders (aimed toimprove productivity in existing agricultural areas byproviding infrastructure and other services)
Objectives: Strategies: •The maximization of income 1. Optimization of resource utilization was through optimal utilization of•Was introduced in 1992 encourage to diversify out of export resources in the sector•It was undertaken as crop cultivation into other activities •Increase the food productionMalaysia’s Vision 2020 for local market such aswhich introduced in 1990 paddy, vegetables, fruits & 2. Acceleration of Agro-based industrial•This policy encouraged poultry development which generate more off-alternatives use of farm opportunities for smallholder toagricultural land for earn additional incomehigher value addedactivities 3. Enhancement of R&D are needed to•It was market oriented, overcome the production process,commercialized, efficient, labor and other constraint in thecompetitive & dynamic agriculture 4. Greater participation of private sector were Emphasis of NAP 2 needed in order to transform the agriculture sector into a competitive ♦ To further strengthen and enable agriculture sector to contribute substantially to the economic growth of the and efficient sector nation ♦ Increasing productivity, efficiency & competitiveness 5. Human resource development is a key ♦ Increasing land areas for palm oil (plantation crop) strategies to achieve increased productivity and output of both labor ♦ Development of agro-based industry and land ♦ Acceleration the transformation of the sector into a dynamic and commercialized sector
Strategies:•Continued NAP 2 The Agro-Forestry•Takes into account the 1997-1998 ApproachAsian Financial Crisis & theliberalization of the financial market •Aimed to tackle the problem of•Concerned on: resource constraints(land & labour) - Food security and focuses on sustainable agricultural development -Increase productivity & competitiveness •Agriculture and forestry are viewed -Inflation as mutually compatible and - Private sector investment complementary - Enhance export of domestic food production Product-based •Aimed to create a large production -Deepen linkages with other Approach base for both sector sectors •Is adopted to reinforce and -Reduce dependency on imports complement the cluster-based -Venture into frontier areas as agro-industrial development well as utilize natural resources efficiency •Identified in the 2nd Industrial Plan (1996-2005) i.e. processed (halal) food from livestock industry, juices and cocktails from fruits or salad dressing from oil palm