Friday, 17 March 2017

New agriculture and the policies can the government adopt to stimulate new agriculture.

daniel shah 
17/3/2017




Agriculture is an important sector in Malaysia. The concept of “New Agriculture” was introduced in the Ninth Malaysia Plan (Malaysia, 2006). The concept is not completely a new idea. The World Bank has predicted that agriculture will continue to be a fundamental instrument for sustainable development and poverty reduction in the 21st century. The emerging new agriculture is led by private entrepreneurs in extensive value chains linking producers to consumers and including many entrepreneurial smallholders supported by their organizations. The New Agriculture sector in Malaysia focuses on two categories which are the agro-industrial commodities and food commodities. Included in agro-industrial commodities are crude palm oil, natural rubber, cocoa, pineapples, tobacco, coconuts and pepper. Agro-industrial commodities have more commercial value and are used as major inputs for the processing activities. For the food commodities, it is included of rice, vegetables, fruits, fisheries and livestock. Some of the food commodities are also being processed while flowers are sold as cut-flowers and not involved in the food processing activities.

Agricultural policy describes a set of laws relating to domestic agriculture and imports of foreign agricultural products. Governments usually implement agricultural policies with the goal of achieving a specific outcome in the domestic agricultural product markets. Outcome are related to a guaranteed supply level, price stability, product quality, product selection and land use or employment.



The policies that government has formulated are namely, The National Agricultural Policy 1, 2, 3 (NAP 1-3) and The National Agro-food Policy (NAM).  The main objectives of the National Agro-food Policy (2011-2020) are to address food security and safety to ensure availability, affordability and accessibility, to ensure the competitiveness and sustainability of the agro food industry and to increase the income level of agropreneurs.
In line with the Third National Agricultural Policy, the new agriculture approach was introduced to activate the industrialisation of the country's agriculture sector. This revolution will re-activate the development of the agricultural sector and thus transforming it as one of the nation's engine of growth. To accomplish this, the implementation of the Ninth Malaysia Plan will be done based on the following policy thrust which are increasing agriculture production including new sources of growth with greater private sector participation, expanding agro-based processing activities and product diversification, strengthen marketing and global network, enhancing income of smallholders, farmers and fishermen and improving the delivery service system. The ultimate goal in the agro-food production development and downstream processing industry is to increase the number of modern and commercial farmers, breeders and fishermen as well as agro entrepreneurs to pioneer the development of the agro food sector which is private sector driven, without displacing the traditional farmers, where their production capacity will be enhanced to complement the benefit of the transformation process through an increase in productivity and income. The implementation of the Ninth Malaysia Plan is parallel with the strategic intend of the country's leadership in revolutionising and industrialising the agriculture sector into a modern, dynamic and competitive sector.



In trying to develop, the government can look at outward looking policies. An outward looking strategy, such as promoting tourism, is seen as a more modern approach to development, and one that relies less on government intervention. A number of important global events forced many developing countries to become outward looking, including a rising development gap between countries adopting inward and outward looking policies. In addition, the collapse of communism created an opportunity to adopt more outward looking policies. Those that have adopted them, including India and China, clearly benefitted from increasingly outward looking policies in terms of growth rates and reduced poverty.

The benefits of outward looking policies are derived from the benefits of free trade. For example, free trade brings welfare gains from tariff removal and increased competition and efficiency. In addition, outward looking countries may be better able to cope with globalisation and with external shocks. However, the financial crisis and its after-effects have forced many national governments to re-think their policies and to minimise the risks of an outward looking approach.




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