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Focus Group Discussion
Budget 2024 Food Security Measures
Date: 15th September 2023
Venue: Odyssey Hall, Level 7, Mercu UEM
Time Programme
8.30 – 8.45 Arrival of Guests
8.45 – 8.50 Opening Remarks by YBhg. Tan Sri Nor Mohamed Yakcop,
Chairman of Khazanah Research Institute
8.50 – 9.05 Presentation by Khazanah Research Institute,
“Ensuring Food Security in Malaysia: A Multi-Dimensional Approach”
9.05 – 10.15 Discussion
10.15 End
Khazanah Research Institute
15th September 2023
Ensuring Food Security in Malaysia:
A Multi-Dimensional Approach
Global Food Security Trends
Khazanah
Research
Institute
Multiple Factors Contributing to Food Insecurity
4
Trade restriction
Conflict
Climate
Poverty & Inequality
Population growth
Market volatility
Global supply
chain disruption
Urbanisation
Water scarcity
Health crises &
and inadequate
healthcare
access
Changing diet
Economic slowdown and downturn
Lack of education
Source: Dollahite et al. (2003); IFPRI (2019); Laborde et al. (2020); Siddiqui et al. (2020); Workie et al. (2020); United Nations (2021); FAO (2023)
Availability Accessibility
Utilisation
Stability &
Sustainability
Food Security
Khazanah
Research
Institute
While Global Production is Projected to Increase,
Sudden Trade Restriction Remains a Risk
Source: IFPRI (2023); OECD-FAO Agricultural Outlook (2023); KRI Calculations
5
Availability Accessibility
Utilisation
Stability &
Sustainability
Food
Security
Country Global Market Share (kcal) in Selected Restricted
products (Current Ban), %
-
500
1,000
1,500
2,000
2,500
3,000
3,500
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
Million tonnes
Cereals
Sugar
Dairy
Oilseeds
Meat
Production and Projected Production for Key Commodities, 2000–2032
Khazanah
Research
Institute
Global Fertiliser and Food Prices Declining but
Higher than Pre-Pandemic Level
Source: FAO Food Price Index (2023); World Bank Commodity Price Data (The Pink Sheet) (2023)
60
80
100
120
140
160
180
200
2018 2019 2020 2021 2022 2023
2014-2016=100
Oils
Cereals
Food
Dairy
Meat
Sugar
FAO Food Price Index, 2018–2023
Global Price for Top 3 Agricultural Fertilisers, 2018–2022
Diammonium
Phosphate
Potassium
Chloride
Urea
200
300
400
500
600
700
800
2018 2019 2020 2021 2022 2023
USD/Mt
Availability Accessibility
Utilisation
Stability &
Sustainability
Food
Security
Khazanah
Research
Institute
The Prevalence of Undernourishment Increased
Post-Pandemic Alongside the Cost of a Healthy
Diet
Source: FAOSTAT (2023)
Note: CoHD data for 2022 is not available 7
3.00
3.10
3.20
3.30
3.40
3.50
3.60
3.70
7
8
8
9
9
10
2017 2018 2019 2020 2021 2022
Prevalence of
undernourishment
Cost of a healthy diet
PoU (%)
CoHD
(PPP$/person/day)
The prevalence of undernourishment remained far above
pre-pandemic levels. The impact of the pandemic has
been further exacerbated by additional factors such as the
Russia-Ukraine conflict, rising food prices, and weather-
related events.
It is projected that 600 million people globally will be
undernourished in 2030. In 2021, it was estimated that 2.7
billion people could not afford a healthy diet.
Low- and lower-middle-income countries bear the highest
burden of stunting and wasting, with rural areas showing
a higher prevalence, while urban areas are more
commonly associated with overweight issues at the global
level.
Global Prevalence of Undernourishment (PoU) and Cost of Healthy Diet
(CoHD), 2017-2022
Availability Accessibility
Utilisation
Stability &
Sustainability
Food
Security
Khazanah
Research
Institute
The Need for Sustainability Practices Amidst
Climate Change’s Impact on Agriculture
Source: Ritchie and Roser (2020); IPCC (2022)
8
Global Greenhouse Gas Emissions by Sector, 2016 Drought Risk Index for Rainfed Agriculture Systems between 1986
and 2015
Energy
73%
Industrial
processes
5%
Waste
3%
Agriculture,
Forestry &
Land Use
(AFOLU)
19%
Availability Accessibility
Utilisation
Stability &
Sustainability
Food
Security
Risk index: calculated by multiplying
hazard/exposure indicator score
(actual/ potential
evapotranspiration) and vulnerability
index (64 indicators including social
susceptibility)
National Food Security Trends
Khazanah
Research
Institute
Malaysia is More than 50% Self-sufficient in
Most Tropical Foods
Source: DOS (2023); KRI illustrations
10
Rice Poultry Beef Pork
Vegetables
Fruits
Eggs Fish Milk
65.0% 99.9% 18.9% 93.4% 77.4%
46.7% 114.4% 91.7% 56.7%
Self-sufficiency Level for Key Food Items, 2021
Malaysia is more than 50% self-sufficient for the majority of its key food
items. The ones we may not be self-sufficient in are temperate items
such as strawberries and grapes, which are normally imported to meet
the local demands.
Availability Accessibility
Utilisation
Stability &
Sustainability
Food
Security
Khazanah
Research
Institute
The Gap between Rice Consumption and Paddy
Production is Widening
Source: KPKM (various years); OECD-FAO (2023)
11
There is a widening gap between
Malaysia’s rice consumption and paddy
production. From 2013 to 2022, local
paddy production has declined by 12.4%.
Meanwhile, rice consumption has risen
by 5.5%.
Paddy production and rice consumption in Malaysia, 2013 – 2022
0
500
1,000
1,500
2,000
2,500
3,000
0
500
1,000
1,500
2,000
2,500
3,000
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Paddy production Rice consumption
‘000 MT ‘000 MT
Khazanah
Research
Institute
Malaysia’s Geographically Concentrated Paddy
Production Could Pose a Risk to Rice Supply
Source: Funk et al. (2015); Statistik Tanaman (2022); Hersbach et al. (2023); KNB Project SEMAI (2023); KRI Illustrations
12
Paddy Production by State (Mt), 2021
Availability Accessibility
Utilisation
Stability &
Sustainability
Food
Security
Exposure to Drought in the 2015-2016 El Niño
Extreme Precipitation in Malaysia, 10-year mean
• 60% of the domestic rice is produced in the
Northern States.
• The incidence of extreme weather in
Malaysia is region-specific.
Khazanah
Research
Institute
KRI’s Budget 2024 Recommendations for the Paddy
Industry
13
We recommend that Budget 2024 allocate a dedicated budget
to spur the paddy and rice industry in Sabah and Sarawak
(both lowland and hill rice) to mitigate domestic supply
disruptions and improve our climate resilience, especially to
the upcoming El Niño.
• A declining domestic production, coupled with geographical
concentration, poses a risk to the supply of domestic rice.
Khazanah
Research
Institute
The Need to Expand Beyond Self-sufficiency
Targets
14
Being a net food exporter does not equate to
being more food secure.
Net food importers
Net food exporters
2022 GFSI Ranking, Asia Pacific
Singapore 5
MALAYSIA 8
Thailand 11
Vietnam 9
India 14
In 2021, Malaysia imported around RM78.7b
worth of food, which was 8% of the total import
bill.
Source: The Economist Group (2022)
Availability Accessibility
Utilisation
Stability &
Sustainability
Food
Security
Source: United Nations (n.d.)
Malaysia’s Food Import Bill and Share of Food Import to Total
Merchandise Import, 2012 – 2021
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
0
10
20
30
40
50
60
70
80
90
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
RM billions Share of food import to total merchandise import
RM billions
Khazanah
Research
Institute
Food Prices Remain a Concern Amidst Wage
Stagnation
Source: DOS (2023)
15
Malaysia Food and Non-alcoholic Beverage CPI Year-on-year (YoY), 2010 – 2023
-4.00
-2.00
0.00
2.00
4.00
6.00
8.00
Feb-10
Oct-10
Jun-11
Feb-12
Oct-12
Jun-13
Feb-14
Oct-14
Jun-15
Feb-16
Oct-16
Jun-17
Feb-18
Oct-18
Jun-19
Feb-20
Oct-20
Jun-21
Feb-22
Oct-22
Jun-23
CPI (YoY)
%
Food and non-alcoholic beverage CPI (YoY)
The inflation rates of food and non-
alcoholic beverage were below ~2%
from 2010 to 2019 but escalated in
2022. The inflation rates in recent
months showed a declining trend but
food prices remain high.
Availability Accessibility
Utilisation
Stability &
Sustainability
Food
Security
Source: DOS (2023); KRI calculations
Notes: Household wages are in real 2021 terms
0
500
1,000
1,500
2,000
2,500
1 2 3 4 5 6 7 8 9 10
RM2,500
Absolute/RM change in real monthly individual wage, by decile, 2010 – 2019
Annual real increase of only ~RM
56/worker/year for the bottom 50%
of workers within the period of 2010
to 2019: an indication of wage
stagnation.
Khazanah
Research
Institute
Poor Health Literacy Coupled With High Cost of
Healthy Diets Hinder Optimal Utilisation
Source: Institut Kesihatan Umum (2019)
16
0
10
20
30
40
50
60
70
80
90
100
Quintile 1 Quintile 2 Quintile 3 Quintile 4 Quintile 5
Excellent health
literacy
Sufficient health
literacy
Limited health
literacy
Health Literacy Level by Household Income Quintile, 2019 - Malaysia Ratio of the Cost of A Healthy Diet to the $1.12/Day International Food Poverty Line in
2017 Purchasing Power Parity $, 2017 – 2021
Source: World Bank (2022)
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
2017 2018 2019 2020 2021
Indonesia
Thailand
Malaysia
Singapore
Australia
• In Malaysia, lower-income individuals tend to have
lower health literacy levels (a prerequisite to
optimal utilisation of food).
• The cost of a healthy diet in Malaysia is triple of the
$1.12 international food poverty line in 2021, making
healthy diets out of reach, especially for the poor.
Availability Accessibility
Utilisation
Stability &
Sustainability
Food
Security
Sufficient food consumption does not always equate to good nutrition. A range of non-food inputs should be taken
into consideration.
Khazanah
Research
Institute
• Global Food Security Index (GFSI) 2022 revealed
Malaysia’s weaknesses in the “Sustainability and
Adaptation” pillar, indicating the vulnerability of
agriculture and food production to climate change.
The Impact of Climate Change Has Already
Been Felt among Agricultural Workers
Source: KNB Project Semai (2023)
17
Strongly
disagree
Disagree Neutral Agree Strongly agree
n = 86 363 355 1335 1163
0
200
400
600
800
1,000
1,200
1,400
1,600
Rainfall changes in the past 5 years caused my production to decrease
• Khazanah SEMAI survey revealed that 75.6% of
smallholders reported that changes in rainfall in the
past 5 years caused a decrease in output.
• Climate change and natural disasters are the third
most cited challenge across all smallholders. The top
two challenges are rising input prices and pest attacks.
Sentiment of agricultural smallholders towards rainfall changes, 2022
Preliminary findings. Do not disseminate.
Source: The Economist Group (2022)
Availability Accessibility
Utilisation
Stability &
Sustainability
Food
Security
Affordability
Quality and Safety
Availability
Sustainability and Adaptation
Very Good
Good
Moderate
Weak
Score categories
• Temperature rise
• Agricultural water pollution
• GHG emissions from grassland
• Marine biodiversity (fish catch from overexploited or
collapsed stocks
• Climate adaptation measures for agriculture
Malaysia’s Score Categories in GFSI 2022
Previous Budget Focus
Khazanah
Research
Institute
Previous Budget Focus
Source: MOF (2022); Based on KRI Interpretations and Calculations
Note: Calculation is made based on food security-related programmes only, budget may fall under various ministries. 19
Dimension Initiative
Allocation
(million)
Availability Subsidies and Incentives 1600
Agropenjara 10
Dana Impak 200
Investment from GLC/GLIC for food security
related projects 1300
Skim Pembiayaan Agrofood BNM 1000
Crop and livestock sector development under
IADA 17.3
Program Pembangunan Semula Hasil Baharu 40
Dana Pembiayaan Agromakanan 550
Nationwide agrifood project 30
Infrastructure and irrigation development 126.8
Accesibility
Program Jualan Murah Keluarga Malaysia 100
Community Drumming - delivery of food items
to rural areas 225
Skim Penstabilan Minyak Masak 502
Tabung Modal Pusingan Suruhanjaya
Koperasi 100
Utilisation Rancangan Makanan Tambahan 777
Bantuan Makan Prasekolah 108
Stability & Sustainability
Digital Agtech 10
Program Modenisasi Rantaian Nilaian
Makanan 60
Precision farming and sustainable agriculture
related programmes 9.4
Modernisation of the pineapple industry 29
Incentive for farmers implementing IPM and
GAP 5
Organic-farming related programmes 5
Food Security-Related Budget, 2023
Availability
72%
Accessibility
13%
Utilisation
13%
Stability & Sustainability
2%
Food Security-Related Budget Allocation, 2023
More initiatives on stability and sustainability
dimension?
Addressing Food Security
Through Budget 2024
Khazanah
Research
Institute
Discussion Points for Budget 2024 Recommendations
21
.
AVAILABILITY
What are the immediate strategies that we can adopt to ensure the continued availability
of our key food items?
KRI: Allocate a dedicated budget to develop Sabah and Sarawak’s paddy industry (both
lowland and hill rice).
ACCESSIBILITY
What are the Budget 2024-relevant measures that can be taken to ensure affordable
healthy food to Malaysians, given high food prices and issues of wage stagnation?
UTILISATION
What are the Budget 2024-relevant measures that can be adopted to address malnutrition
(such as obesity and stunting), especially among the lower-income groups?
STABILITY AND
SUSTAINABILITY
What are the Budget 2024-relevant measures that can be taken to ensure the climate
resilience of our farmers, especially with the upcoming El Niño?
Khazanah
Research
Institute
Thank You
22

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Budget 2024 Focus Group Discussion: Food Security

  • 1. Focus Group Discussion Budget 2024 Food Security Measures Date: 15th September 2023 Venue: Odyssey Hall, Level 7, Mercu UEM Time Programme 8.30 – 8.45 Arrival of Guests 8.45 – 8.50 Opening Remarks by YBhg. Tan Sri Nor Mohamed Yakcop, Chairman of Khazanah Research Institute 8.50 – 9.05 Presentation by Khazanah Research Institute, “Ensuring Food Security in Malaysia: A Multi-Dimensional Approach” 9.05 – 10.15 Discussion 10.15 End
  • 2. Khazanah Research Institute 15th September 2023 Ensuring Food Security in Malaysia: A Multi-Dimensional Approach
  • 4. Khazanah Research Institute Multiple Factors Contributing to Food Insecurity 4 Trade restriction Conflict Climate Poverty & Inequality Population growth Market volatility Global supply chain disruption Urbanisation Water scarcity Health crises & and inadequate healthcare access Changing diet Economic slowdown and downturn Lack of education Source: Dollahite et al. (2003); IFPRI (2019); Laborde et al. (2020); Siddiqui et al. (2020); Workie et al. (2020); United Nations (2021); FAO (2023) Availability Accessibility Utilisation Stability & Sustainability Food Security
  • 5. Khazanah Research Institute While Global Production is Projected to Increase, Sudden Trade Restriction Remains a Risk Source: IFPRI (2023); OECD-FAO Agricultural Outlook (2023); KRI Calculations 5 Availability Accessibility Utilisation Stability & Sustainability Food Security Country Global Market Share (kcal) in Selected Restricted products (Current Ban), % - 500 1,000 1,500 2,000 2,500 3,000 3,500 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 Million tonnes Cereals Sugar Dairy Oilseeds Meat Production and Projected Production for Key Commodities, 2000–2032
  • 6. Khazanah Research Institute Global Fertiliser and Food Prices Declining but Higher than Pre-Pandemic Level Source: FAO Food Price Index (2023); World Bank Commodity Price Data (The Pink Sheet) (2023) 60 80 100 120 140 160 180 200 2018 2019 2020 2021 2022 2023 2014-2016=100 Oils Cereals Food Dairy Meat Sugar FAO Food Price Index, 2018–2023 Global Price for Top 3 Agricultural Fertilisers, 2018–2022 Diammonium Phosphate Potassium Chloride Urea 200 300 400 500 600 700 800 2018 2019 2020 2021 2022 2023 USD/Mt Availability Accessibility Utilisation Stability & Sustainability Food Security
  • 7. Khazanah Research Institute The Prevalence of Undernourishment Increased Post-Pandemic Alongside the Cost of a Healthy Diet Source: FAOSTAT (2023) Note: CoHD data for 2022 is not available 7 3.00 3.10 3.20 3.30 3.40 3.50 3.60 3.70 7 8 8 9 9 10 2017 2018 2019 2020 2021 2022 Prevalence of undernourishment Cost of a healthy diet PoU (%) CoHD (PPP$/person/day) The prevalence of undernourishment remained far above pre-pandemic levels. The impact of the pandemic has been further exacerbated by additional factors such as the Russia-Ukraine conflict, rising food prices, and weather- related events. It is projected that 600 million people globally will be undernourished in 2030. In 2021, it was estimated that 2.7 billion people could not afford a healthy diet. Low- and lower-middle-income countries bear the highest burden of stunting and wasting, with rural areas showing a higher prevalence, while urban areas are more commonly associated with overweight issues at the global level. Global Prevalence of Undernourishment (PoU) and Cost of Healthy Diet (CoHD), 2017-2022 Availability Accessibility Utilisation Stability & Sustainability Food Security
  • 8. Khazanah Research Institute The Need for Sustainability Practices Amidst Climate Change’s Impact on Agriculture Source: Ritchie and Roser (2020); IPCC (2022) 8 Global Greenhouse Gas Emissions by Sector, 2016 Drought Risk Index for Rainfed Agriculture Systems between 1986 and 2015 Energy 73% Industrial processes 5% Waste 3% Agriculture, Forestry & Land Use (AFOLU) 19% Availability Accessibility Utilisation Stability & Sustainability Food Security Risk index: calculated by multiplying hazard/exposure indicator score (actual/ potential evapotranspiration) and vulnerability index (64 indicators including social susceptibility)
  • 10. Khazanah Research Institute Malaysia is More than 50% Self-sufficient in Most Tropical Foods Source: DOS (2023); KRI illustrations 10 Rice Poultry Beef Pork Vegetables Fruits Eggs Fish Milk 65.0% 99.9% 18.9% 93.4% 77.4% 46.7% 114.4% 91.7% 56.7% Self-sufficiency Level for Key Food Items, 2021 Malaysia is more than 50% self-sufficient for the majority of its key food items. The ones we may not be self-sufficient in are temperate items such as strawberries and grapes, which are normally imported to meet the local demands. Availability Accessibility Utilisation Stability & Sustainability Food Security
  • 11. Khazanah Research Institute The Gap between Rice Consumption and Paddy Production is Widening Source: KPKM (various years); OECD-FAO (2023) 11 There is a widening gap between Malaysia’s rice consumption and paddy production. From 2013 to 2022, local paddy production has declined by 12.4%. Meanwhile, rice consumption has risen by 5.5%. Paddy production and rice consumption in Malaysia, 2013 – 2022 0 500 1,000 1,500 2,000 2,500 3,000 0 500 1,000 1,500 2,000 2,500 3,000 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Paddy production Rice consumption ‘000 MT ‘000 MT
  • 12. Khazanah Research Institute Malaysia’s Geographically Concentrated Paddy Production Could Pose a Risk to Rice Supply Source: Funk et al. (2015); Statistik Tanaman (2022); Hersbach et al. (2023); KNB Project SEMAI (2023); KRI Illustrations 12 Paddy Production by State (Mt), 2021 Availability Accessibility Utilisation Stability & Sustainability Food Security Exposure to Drought in the 2015-2016 El Niño Extreme Precipitation in Malaysia, 10-year mean • 60% of the domestic rice is produced in the Northern States. • The incidence of extreme weather in Malaysia is region-specific.
  • 13. Khazanah Research Institute KRI’s Budget 2024 Recommendations for the Paddy Industry 13 We recommend that Budget 2024 allocate a dedicated budget to spur the paddy and rice industry in Sabah and Sarawak (both lowland and hill rice) to mitigate domestic supply disruptions and improve our climate resilience, especially to the upcoming El Niño. • A declining domestic production, coupled with geographical concentration, poses a risk to the supply of domestic rice.
  • 14. Khazanah Research Institute The Need to Expand Beyond Self-sufficiency Targets 14 Being a net food exporter does not equate to being more food secure. Net food importers Net food exporters 2022 GFSI Ranking, Asia Pacific Singapore 5 MALAYSIA 8 Thailand 11 Vietnam 9 India 14 In 2021, Malaysia imported around RM78.7b worth of food, which was 8% of the total import bill. Source: The Economist Group (2022) Availability Accessibility Utilisation Stability & Sustainability Food Security Source: United Nations (n.d.) Malaysia’s Food Import Bill and Share of Food Import to Total Merchandise Import, 2012 – 2021 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 0 10 20 30 40 50 60 70 80 90 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 RM billions Share of food import to total merchandise import RM billions
  • 15. Khazanah Research Institute Food Prices Remain a Concern Amidst Wage Stagnation Source: DOS (2023) 15 Malaysia Food and Non-alcoholic Beverage CPI Year-on-year (YoY), 2010 – 2023 -4.00 -2.00 0.00 2.00 4.00 6.00 8.00 Feb-10 Oct-10 Jun-11 Feb-12 Oct-12 Jun-13 Feb-14 Oct-14 Jun-15 Feb-16 Oct-16 Jun-17 Feb-18 Oct-18 Jun-19 Feb-20 Oct-20 Jun-21 Feb-22 Oct-22 Jun-23 CPI (YoY) % Food and non-alcoholic beverage CPI (YoY) The inflation rates of food and non- alcoholic beverage were below ~2% from 2010 to 2019 but escalated in 2022. The inflation rates in recent months showed a declining trend but food prices remain high. Availability Accessibility Utilisation Stability & Sustainability Food Security Source: DOS (2023); KRI calculations Notes: Household wages are in real 2021 terms 0 500 1,000 1,500 2,000 2,500 1 2 3 4 5 6 7 8 9 10 RM2,500 Absolute/RM change in real monthly individual wage, by decile, 2010 – 2019 Annual real increase of only ~RM 56/worker/year for the bottom 50% of workers within the period of 2010 to 2019: an indication of wage stagnation.
  • 16. Khazanah Research Institute Poor Health Literacy Coupled With High Cost of Healthy Diets Hinder Optimal Utilisation Source: Institut Kesihatan Umum (2019) 16 0 10 20 30 40 50 60 70 80 90 100 Quintile 1 Quintile 2 Quintile 3 Quintile 4 Quintile 5 Excellent health literacy Sufficient health literacy Limited health literacy Health Literacy Level by Household Income Quintile, 2019 - Malaysia Ratio of the Cost of A Healthy Diet to the $1.12/Day International Food Poverty Line in 2017 Purchasing Power Parity $, 2017 – 2021 Source: World Bank (2022) 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 2017 2018 2019 2020 2021 Indonesia Thailand Malaysia Singapore Australia • In Malaysia, lower-income individuals tend to have lower health literacy levels (a prerequisite to optimal utilisation of food). • The cost of a healthy diet in Malaysia is triple of the $1.12 international food poverty line in 2021, making healthy diets out of reach, especially for the poor. Availability Accessibility Utilisation Stability & Sustainability Food Security Sufficient food consumption does not always equate to good nutrition. A range of non-food inputs should be taken into consideration.
  • 17. Khazanah Research Institute • Global Food Security Index (GFSI) 2022 revealed Malaysia’s weaknesses in the “Sustainability and Adaptation” pillar, indicating the vulnerability of agriculture and food production to climate change. The Impact of Climate Change Has Already Been Felt among Agricultural Workers Source: KNB Project Semai (2023) 17 Strongly disagree Disagree Neutral Agree Strongly agree n = 86 363 355 1335 1163 0 200 400 600 800 1,000 1,200 1,400 1,600 Rainfall changes in the past 5 years caused my production to decrease • Khazanah SEMAI survey revealed that 75.6% of smallholders reported that changes in rainfall in the past 5 years caused a decrease in output. • Climate change and natural disasters are the third most cited challenge across all smallholders. The top two challenges are rising input prices and pest attacks. Sentiment of agricultural smallholders towards rainfall changes, 2022 Preliminary findings. Do not disseminate. Source: The Economist Group (2022) Availability Accessibility Utilisation Stability & Sustainability Food Security Affordability Quality and Safety Availability Sustainability and Adaptation Very Good Good Moderate Weak Score categories • Temperature rise • Agricultural water pollution • GHG emissions from grassland • Marine biodiversity (fish catch from overexploited or collapsed stocks • Climate adaptation measures for agriculture Malaysia’s Score Categories in GFSI 2022
  • 19. Khazanah Research Institute Previous Budget Focus Source: MOF (2022); Based on KRI Interpretations and Calculations Note: Calculation is made based on food security-related programmes only, budget may fall under various ministries. 19 Dimension Initiative Allocation (million) Availability Subsidies and Incentives 1600 Agropenjara 10 Dana Impak 200 Investment from GLC/GLIC for food security related projects 1300 Skim Pembiayaan Agrofood BNM 1000 Crop and livestock sector development under IADA 17.3 Program Pembangunan Semula Hasil Baharu 40 Dana Pembiayaan Agromakanan 550 Nationwide agrifood project 30 Infrastructure and irrigation development 126.8 Accesibility Program Jualan Murah Keluarga Malaysia 100 Community Drumming - delivery of food items to rural areas 225 Skim Penstabilan Minyak Masak 502 Tabung Modal Pusingan Suruhanjaya Koperasi 100 Utilisation Rancangan Makanan Tambahan 777 Bantuan Makan Prasekolah 108 Stability & Sustainability Digital Agtech 10 Program Modenisasi Rantaian Nilaian Makanan 60 Precision farming and sustainable agriculture related programmes 9.4 Modernisation of the pineapple industry 29 Incentive for farmers implementing IPM and GAP 5 Organic-farming related programmes 5 Food Security-Related Budget, 2023 Availability 72% Accessibility 13% Utilisation 13% Stability & Sustainability 2% Food Security-Related Budget Allocation, 2023 More initiatives on stability and sustainability dimension?
  • 21. Khazanah Research Institute Discussion Points for Budget 2024 Recommendations 21 . AVAILABILITY What are the immediate strategies that we can adopt to ensure the continued availability of our key food items? KRI: Allocate a dedicated budget to develop Sabah and Sarawak’s paddy industry (both lowland and hill rice). ACCESSIBILITY What are the Budget 2024-relevant measures that can be taken to ensure affordable healthy food to Malaysians, given high food prices and issues of wage stagnation? UTILISATION What are the Budget 2024-relevant measures that can be adopted to address malnutrition (such as obesity and stunting), especially among the lower-income groups? STABILITY AND SUSTAINABILITY What are the Budget 2024-relevant measures that can be taken to ensure the climate resilience of our farmers, especially with the upcoming El Niño?

Editor's Notes

  1. Drought hazard indicator is defined as the ratio of actual crop evapotranspiration to potential crop evapotranspiration, calculated for 24 crops. Vulnerability index is the country-scale weighted average of a total o@f 64 indicators including social and ecological susceptibility indicators, and coping capacity. Risk index is calculated by multiplying hazard/exposure indicator score and vulnerability index (Meza et al., 2020). -Agriculture industry is contributing to 1/5 of global greenhouse emissions. This figure is only for activities like rice cultivation, crop burning, deforestation, livestock and manure production. In reality, it is a lot more than 19% because food needs to be transported and farms need to be operated. Importing and exporting food through planes would take so much energy usage. -Emphasis for sustainability practices in this industry. -Right figure shows the region that is vulnerable, indicating that agri is both driver and victim of climate change. A single catastrophic event could destroy crops and livelihood. Sources: Chapter 5: Food, Fibre and Other Ecosystem Products | Climate Change 2022: Impacts, Adaptation and Vulnerability (ipcc.ch) https://ourworldindata.org/emissions-by-sector
  2. Hence, there is a need to move away from achieving self-sufficiency. Malaysian diets are growing more diverse as a result of increasing global trade (physical access) and consumer wealth (economic access). Rice consumption is being displaced by other main food items, especially meat and seafood. In 2018, Malaysians still consume rice as a main source of caloric intake, which was 3 times more than wheat. However, the long-term trend over five decades showed a decreasing amount of rice consumed, replaced by an increasing amount of wheat and other main food items, especially meat and seafood. Malaysia is currently 65% self-sufficient in rice production currently and we do import premium rice such as basmati rice to meet the local demands. Moreover, being a net food exporter does not equate to being more food secure. Vietnam, Thailand and india are net food exporters but rank lower than Singapore and Malaysia, net food importers in GFSI, an international food security composite index.
  3. -This table shows programmes that are related to food security, the budget may not fall under KPKM alone but may fall under other ministries like MOH. -These are programmes that are related to all dimensions of food security, and can be seen that a lot of allocation is given to availability pillar. -This is a good thing but if we want to really move forward and improve food security, then the same attention should be given to other pillars as well. -The budget allocation for sustainability and stability is especially low, out of the budget given for food security related programmes, only 2% of those goes towards the stability and sustainability pillar. -Sustainability is given too little budget, only 10m for sustainability and organic related incentives and programmes. -Budget for utilization also can be increased, currently RMT and Bantuan Makanan Prasekolah are focusing for primary school children. -(can add TS’s point about pushing for universal school feeding programme).
  4. Thank you.