PRT 2008PRT 2008

Lecture 10Lecture 10

Agricultural contribution to the Agricultural contribution to the economyeconomy

Agricultural contributionAgricultural contribution

• Structural changes to the Malaysian Structural changes to the Malaysian economyeconomy

• Malaysian agricultureMalaysian agriculture

Structural changesStructural changes

• Best described in terms of Best described in terms of contribution of various sectors to the contribution of various sectors to the GDPGDP

• The primary sector are agriculture, The primary sector are agriculture, forestry, fishing, mining, etcforestry, fishing, mining, etc

• Secondary sector is manufacturingSecondary sector is manufacturing

• Tertiary sector is serviceTertiary sector is service

Cont.Cont.

• The tertiary sector is the highest The tertiary sector is the highest contributor to the GDP since 1965contributor to the GDP since 1965

• In 1965 it was 45 %. 2002 52.6 %. In In 1965 it was 45 %. 2002 52.6 %. In 2005 expected to be 54 %2005 expected to be 54 %

• Relative importance of primary Relative importance of primary sector has decreased since 1970sector has decreased since 1970

Cont.Cont.

• Malaysian economy grew by 5.1 % per Malaysian economy grew by 5.1 % per year in the 1960syear in the 1960s

• It grew by 7.8 % in 1970sIt grew by 7.8 % in 1970s• In 1980s by 5.9 %In 1980s by 5.9 %• It grew by 8.7 % in 1991-1995It grew by 8.7 % in 1991-1995• It is affected by the 1998 recessionIt is affected by the 1998 recession• During 2001-2003, it recorded a credible During 2001-2003, it recorded a credible

performanceperformance• In 2005 – GDP growth was 6-6.5 %In 2005 – GDP growth was 6-6.5 %

Malaysian agricultureMalaysian agriculture

• Dualistic system – Plantation (estate) Dualistic system – Plantation (estate) and smallholderand smallholder

• Estate - > 40 haEstate - > 40 ha• Plantation is systematic, using Plantation is systematic, using

modern technologies, hired labor, modern technologies, hired labor, e.g. rubber, oil palm, teae.g. rubber, oil palm, tea

• Smallholders – subsistence farming Smallholders – subsistence farming and monocroppingand monocropping

Cont.Cont.

• Malaysia’s agricultural development Malaysia’s agricultural development is guided by the National Agricultural is guided by the National Agricultural Policy (NAP)Policy (NAP)

• The development programs are The development programs are aimed at expanding food production, aimed at expanding food production, increasing export and ensuring increasing export and ensuring sustainable supplysustainable supply

Agricultural growthAgricultural growth

• 77thth Malaysia Plan (1995-2000) the Malaysia Plan (1995-2000) the growth was 1.2 % annually (target 1.9)growth was 1.2 % annually (target 1.9)

• 88thth MP, the target was 3 % annually MP, the target was 3 % annually

• 2001-2003, it was 1.5 %2001-2003, it was 1.5 %

• In absolute terms, the value added In absolute terms, the value added increased by USD 4.74 b (2000), 4.97 b increased by USD 4.74 b (2000), 4.97 b (2003) and expected to be 5.24 b (2005)(2003) and expected to be 5.24 b (2005)

Land utilization for Land utilization for agricultureagriculture• Agriculture land increased from 5.7 m ha Agriculture land increased from 5.7 m ha

(1995) to 6 m ha (2000)(1995) to 6 m ha (2000)

• Due to opening of land in Sabah and Due to opening of land in Sabah and SarawakSarawak

• Increase for oil palm (now 4 m ha), Increase for oil palm (now 4 m ha), pepper, vegetables, fruits, paddypepper, vegetables, fruits, paddy

• Decrease for rubber and cocoa. Between Decrease for rubber and cocoa. Between 1995-2005, 430,800 ha were converted to 1995-2005, 430,800 ha were converted to oil palmoil palm

Agricultural productionAgricultural production

• 1995-2005, production of CPO, pepper and 1995-2005, production of CPO, pepper and cut flowers indicated remarkable growth cut flowers indicated remarkable growth due to favorable price and expanding due to favorable price and expanding marketmarket

• Cocoa suffered a negative growth of 6.3 % Cocoa suffered a negative growth of 6.3 % due to pest and diseases. It is now due to pest and diseases. It is now recovering.recovering.

• Livestock, aquaculture and milk production Livestock, aquaculture and milk production showed a promising growth in the 8showed a promising growth in the 8thth MP. MP.