THIRDNATIONALAGRICULTURALPOLICY(19982010)EXECUTIVESUMMARY

I.

INTRODUCTION

1.ThisdocumentoutlinestheThirdNationalAgriculturalPolicy(NAP3)whichsetsthe
strategicdirectionsforagriculturalandforestrydevelopmenttotheyear2010.This
policyhasbeenformulatedtoensurethatthecapabilityoftheagriculturalsectortoplay
itsstrategicroleinnationaldevelopmentissustainedandenhancedinlightofnewand
emergingchallengesfacingagriculturaldevelopment.Towardsthisend,NAP3willfocus
onnewapproachestoincreaseproductivityandcompetitiveness,deepenlinkageswith
othersectors,ventureintonewfrontierareasaswellasconserveandutilisenatural
resourcesonasustainablebasis.Thepolicyaimstosetinplacetheenablingand
supportivemeasuresaswellasaconduciveenvironmenttopromotegrowthinthe
agriculturalsector.Thepoliciesandstrategiesformulatedwillcontinuetoemphasise
productivityandmarketdrivengrowth.

II.BACKGROUND

2.TheimplementationoftheprevioustwoNationalAgriculturalPoliciessince1984has
enabledtheagriculturalsectortoattainagrowthrateof3.2percentperannumforthe
19851995period.Inabsoluteterms,thetotalvalueaddedofthesectorincreasedfrom
RM11.9billionin1985toRM16.2billionin1995.Therelativecontributionofthesector
toemploymentgenerationandexportearnings,however,declinedfrom31.3percent
and36.7percentin1985to18percentand19.2percentin1995respectively.Oilpalm,
sawlogsandfisheriesremainedasthemajorcontributorstothesector'sgrowth.The
shareofagriculturalindustrialcommoditiestototalagriculturalvalueaddeddeclined
from72.1percentin1985to71.0percentin1995whilethatoffoodcommodities
increasedfrom25.3percentto26.2percentforthesameperiod.

3.Structuralchangesintheeconomyhavebroughtforthnewissuesandchallengesin
theagriculturalsectorinparticularacutelabourshortage,limitedavailabilityofsuitable
landandincreasingcostofproductionarisingfromintersectoralcompetitionfor
resourcesaswellasintensecompetitionintheglobalmarketresultingfromtrade
liberalisation.

4.Therecentfinancialcrisisinthecountryandtheregionresultingfromthefurther
liberalisationofthefinancialmarkethasmadethecurrencymarkethighlyvulnerableto
speculation.ThevolatilityandresultantdeclineintheexchangerateoftheRinggitvis...
vismajorcurrencieshasnegativelyaffectedthestabilityandsecurityofthecountry's
foodsupply.Thisinstabilityandinsecurity,ifleftunchecked,canhaveseriouseconomic,
socialandpoliticalimplications.

III.ISSUESANDCHALLENGES

5.Thecountry'sfoodimportbilliscontinuouslyincreasing.Totalfoodimportshas
increasedfromRM3.5billionin1985toRM7.7billionin1995andRM10.0billionin
1997.TheinstabilityandvolatilityoftheexchangeratehasputastrainonMalaysia's
foreignexchangereservesandhasledtoimportedinflation.

6.Thehighdemandforfoodhasledtoincreasesinfoodprices.In1997,increasedprices
offoodaccountedfor51.9percentoftheincreaseinConsumerPriceIndex(CPI).This
was28percentagepointshigherthan1991,whereincreaseinfoodpricesonly
accountedfor38.4percentoftheincreaseinCPI.Inaddition,increasingpercapita
incomeandawarenessofabalanceddietandhealthconsciousnessofthepopulacewill
alsobringaboutchangingtastesandreferencesforfood.Thus,thereisaneedtoensure
adequatesupplyandaccessibilityofsafe,nutritiousandhighqualityfoodataffordable
prices.

7.Thereisnowacuteshortageoflabourleadingtohighemploymentofimmigrant
workersinagricultureandforestrysectors.Duetothisshortage,itisestimatedthat
about300,000hectaresofrubberholdingsareuntappedand30,000hectaresofoilpalm
arenotfullyharvested.Productivitygainsinagriculturehavealsonotmatchedupto
increasesinfactorprices.Currently,labourproductivityinagricultureisonlyabout60
percentofthelabourproductivityinthemanufacturingsector.Thisnecessitates
measurestoreducelabourrequirementinagricultureandincreaselabourproductivity.

8.Thesmallholdersectorcontinuestoexperienceproblemsoflowproductivityand
uneconomicsizeofholdings.Labourshortagesandlowcommoditypriceshavefurther
ledtosubstantialidleagriculturallandandabandonedholdings.Itisestimatedthat
thereareabout400,000hectaresofidleagriculturalland.Inaddition,landfor
agriculturalactivitiesisbecomingmorelimitedowingtoconversionforotherusessuch
asindustrial,residentialandurbanuses.

9.TheimplementationoftheagreementsundertheWorldTradeOrganisation(WTO)
andtheCommonEffectivePreferentialTariff(CEPT)SchemeoftheASEANFreeTrade
Area(AFTA)hascreatedgreatercompetitionforMalaysianagriculture.Mainexport
commoditiessuchasrubberandpalmoilfaceincreasingcompetitionfromemerging
lowercostproducersandcontinuetofacediscriminatorytariffandnontariffbarriers.

10.Thedevelopmentofhighvalueaddedresourcebasedproductsisstilllimitedand
exportsmainlyconsistofprimaryandintermediateproducts.Seventypercentofthe
totalrawmaterialsusedinthefoodprocessingindustriesareimported.Lackof
domesticproductioncoupledwithinconsistentsupplyresultedinmanysmalland
mediumscaleagrobasedfirmstooperatebelowcapacity.Thereisaneedtofurther
strengtheninterandintrasectorallinkagesespeciallywithsupportanddownstream
industries.

11.Concernsfortheenvironmentatbothdomesticandgloballevelsrequiremore
innovativeandefficientagriculturalandforestrypracticesforthesustainable

developmentofthesector.

IV.THETHIRDNATIONALAGRICULTURALPOLICY(NAP3)

12.Thefurthergrowthoftheagriculturalsectorrequiresthenationtoaddressthe
challengeofefficientandoptimalutilisationofexistingresourcesinordertofurther
improvecompetitiveness.Resourceconstraintsandrapidchangesintheglobaltrading
andinvestmentenvironmentnecessitatethedevelopmentofaresilientagricultural
sectorandtheenhancementofitsglobalcompetitiveness.Inaddition,theconcernover
theavailabilityandstabilityoffoodsupplyrequiresthenationtoenhanceits
competitivecapabilitiesinfoodproduction.Thesechallengesrequirenewstrategic
approachesandpolicythruststoenhancetheeconomiccontributionandgrowthofthe
agriculturalsector.

OBJECTIVES

13.TheoverridingobjectiveofNAP3isthemaximisationofincomethroughtheoptimal
utilisationofresourcesinthesector.Thisincludesmaximisingagriculture'scontribution
tonationalincomeandexportearningsaswellasmaximisingincomeofproducers.

14.Specifically,theobjectivesofthePolicyare:

a)toenhancefoodsecurity;
b)toincreaseproductivityandcompetitivenessofthesector;
c)todeepenlinkageswithothersectors;
d)tocreatenewsourcesofgrowthforthesector;and
e)toconserveandutilisenaturalresourcesonasustainablebasis.

MACROECONOMICFRAMEWORK

15.DuringtheNAP3period,thesectorisexpectedtoachieveagrowthrateof2.4
percentperannum.ThecontributionoftheagriculturalsectortoGrossDomestic
Product(GDP)isexpectedtofurtherdeclinefrom13.5percentin1995to7.1percent
in2010.Contributionstototalagriculturalvalueaddedfromrubber,cocoaandsawlogs
areexpectedtodeclinewhilecontributionsfromoilpalmandfoodcommoditiesare
expectedtoincrease.Newsourcesofgrowthareexpectedtoemergeinagriculture
resultingfromvariousinitiativestopromotenewproductsandemergingindustriessuch
asagroforestry,biotechnologyproducts,specialtynaturalproducts,bambooandrattan,
floricultureandaquariumfish.

16.Totalworkforceinagriculturewilldeclinefrom1,524,000workersin1995to
930,000workersin2010.Withthecurrentlandandlabourshortagesandincreasingcost
ofproduction,itisenvisagedthatfutureexpansioninhectaragewouldbelimitedduring
theplanperiod.Therefore,theincreaseinoutputwillemanatemainlyfromincreasing
productivity.LabourproductivityisexpectedtoincreasefromRM10,650perworkerto

RM24,730perworkerwithinthesameperiod.Thisreflectstheemphasisgivenonlabour
savingtechnology,innovationsandmoreefficientfarmmanagementpractices.

17.NAP3willcontinuetopursueagriculturalgrowththroughmoderateexpansionof
landandfurtherintensificationoflanduse.Therewillbesubstantialreductioninthe
rubberandcocoaareas.Rubber,paddy,coconutandcocoaholdingsareexpectedtobe
reducedby494,000,303,000,73,400and30,700hectaresrespectively.Mostofthese
areaswillbereplacedbyagroforestry,oilpalm,fruitsandvegetablecultivation.InSabah
andSarawakwherethereissubstantialarea,newlanddevelopmentwillbeundertaken.
Assuch,landutilisationforagricultureduringtheplanperiodisexpectedtomarginally
increasebyabout0.5percentperyearfrom5.7millionhectaresto6.2millionhectares.

STRATEGICAPPROACHESANDPOLICYTHRUSTS

18.Increasinglyscarceresourceincludinglandavailabilityrequiresastrategythat
optimizesresourceuseforagriculturalandforestrydevelopment.Towardsthisend,an
agroforestrystrategytointegrateagricultureandforestrydevelopmentoutside
PermanentForestEstates(PFEs)isadoptedforNAP3.Thisagroforestryapproachviews
agricultureandforestryasmutuallycompatibleandcomplementaryandtherefore
providesascopeforjointdevelopmentthatcanbringaboutmutualbenefits.The
approachwillbringaboutalargerproductivebaseforagricultureandforestry,allowfor
awiderrangeofagroforestryenterprisemix,optimiseresourceutilisation,particularly
landoutsidethePFEsandenhancetheincomegeneratingpotentialofagroforestry
investments.Theagroforestryapproachwill,thus,enablepolicyformulationtoaddress
resourceconstraintssuchaslandandlabour.

19.Consumersworldwideareincreasinglydemandingproductsthataremorespecific
totheirneedsandpreferences.Theyarenowaccessibletoinformationtechnology
whichsupporttheirabilitytoseek,identifyandprocuretheseproducts.Current
commoditybasedstrategieslimittheeffectivenesstoservemarketsthatareofhigher
valueandmoresegmented.Thisrequiresaneworientationforagricultural
developmenttoservetheneedsofthesemarketsandsecurehighervalueaddedin
agricultureandforestry.Aproductbasedapproachforcommoditydevelopmentwill
thereforebeemployedinthepolicyformulationofNAP3.Inthisapproach,keyproducts
andmarketsareidentifiedbasedonmarketdemand,preferencesandpotential.This
marketdemandandreferencesaretranslatedintostrategiesforupstreamprimary
agriculturalproductiontoenhanceproductionandmarketingoftheagriculturaland
forestryproducts.Theproductbasedapproachwillenableamoreeffectiveformulation
ofpolicythruststomeetthechallengesthathavebeenidentified.Thisapproachis
adoptedtoreinforceandcomplementtheclusterbasedagroindustrialdevelopmentas
identifiedintheSecondIndustrialMasterPlan19962005throughstrengtheningboth
interandintrasectorallinkagesincludingthedevelopmentandexpansionof
intermediateandsupportingindustries.

20.Theseapproachestogetherwiththepolicythrustswillprovidetheenabling
environmenttosustainandenhancethegrowthofagriculturalsectorandbecomemore
globallycompetitive.ThepolicythrustsoftheNAP3are:Meetingnationalfood
requirements

21.Domesticfoodproductionwillbeenhancedthroughlargescalefoodproductionby
theprivatesector.Thisnecessitatesthestrengtheningofcriticalsupportservicesand
institutionalarrangements.Reverseandoffshoreinvestmentsforstrategicsourcingwill
beencouragedandjudiciouslypursued.Enhancingcompetitivenessandprofitabilityin
agricultureandforestry

22.Enhancingcompetitivenessandprofitabilityintheagriculturalsectorwillrequire
focusinginpromotinggloballycompetitiveindustriesinagricultureandforestry.Thiswill
requirethedevelopmentofaworldcompetitiveoutlookwithinthesectorandanexport
culturewithcommitmenttoprovidewhatthemarketwantsatcompetitiveprices.The
competitivenessofthesectorwillbeenhancedthroughproductivityimprovement,
developingandstrengtheningmarkets,removalofmarketandtradedistorting
protectivemeasures,formulationandimplementationofhighqualityandsafety
standardsandselectivedevelopmentofagriculturalandforestryenterprisesbasedon
presentandpotentialcompetitivestrengths.Furtherstrengtheningofcompetitiveness
andprofitabilitywillbeachievedthroughthedevelopmentofnewandinnovative
productsandcapitalizingontheproductvaluechainthatwillgeneratesourcesoffuture
growthandcreatenewhighervalueindustries.Reducinglabourinputsinagricultureand
forestrywillalsostrengthencompetitivenessandprofitabilityofthesector.

23.Capitalisingontheproductvaluechainrequiresreorientationfromcommodity
basedtoproductbasedproductionandmarketing.Thisapproachtocapturehigher
marginsandincreasingfarmincomeswillinvolveverticalintegrationandinternalisingof
valueaddedactivitiesatfarmlevel.Inaddressinglabourconstraints,thethrustwillbe
oncapitalandtechnologyintensiveagriculturalproductionsystemswhichwillutilise
laboursavingtechniques.Agriculturalandforestrydevelopmentwillalsobegeared
towardslesslabourintensiveenterprisessuchasagroforestryandthecultivationof
highvaluecropsandforestspeciesthatrequirelesslabour.Enhancingtheintegrated
developmentofthefoodandindustrialcropsubsectors

24.Thereareresourceswithintheindustrialandfoodcropsubsectorsthatcanbe
exploitedforanintegrateddevelopmentofbothsectors.Theseresourcesincludeland,
labourandwasteaswellasbyproductsthatcanbeusedtoproducevalueadded
products.AnillustrationofthisintegrateddevelopmentisshowninChart1.Thisthrust
requiresfurtherenhancementofR&Dinwasteandbyproductutilisationaswellas
increasedeffortstocommercialiseresearchfindings.Strengtheningrequisiteeconomic
foundation

25.Astrongrequisiteeconomicfoundationisnecessarytosupportandsustainthe
developmentofexistingcoreagriculturalandforestryindustriesandinitiatethegrowth

ofnewones.Theseincludecontinuousupgradingthequalityofhumanresources,
developmentofindigenousR&Dcapabilityandtechnologyincludinginformation
technology,adequateandmodernphysicalinfrastructure,efficientbusinesssupport
services,financingandincentivesandanenablinginstitutionalframework.Adopting
sustainabledevelopment

26.Sustainablemanagementandutilisationofresourceswillbetheguidingprinciplein
pursuingagriculturalandforestrydevelopment.Rules,regulationsandincentiveswillbe
strengthenedtoencourageenvironmentfriendlyagriculturalandforestrypracticesand
minimisethenegativeimpactoftheseactivitiesontheenvironment.Researchand
applicationofappropriatetechnologiesandinnovationsforthispurposewillbe
emphasised.

POLICYDIRECTIONSFORTHEDEVELOPMENTOFPRODUCTGROUPS

Foodproductgroup

27.Thisgroupwhichconsistsofpaddy,livestock,fisheries,fruitsandvegetables
primarilyserves,thoughnotexclusively,thedomesticmarket.Theproductionstructure,
exceptforpoultry,comprisesmainlyofsmallandmediumscaleproductionunits.This
agriculturalindustrygroup,however,isshowingsignsofconsolidationtolargerscale
operationsandisbecomingincreasinglymorecommercialised.

28.Localproductionoffoodhasincreasedatabout4.2percentperannumduring1985
95period.Thisincreasehasnotbeenabletomatchwithdomesticdemandresultingin
increasingimportsespeciallyduring199095period.Theincreasingdeficitbetween
domesticdemandandlocalproductionisexpectedtocontinue.Itisnotinthelongterm
interestofthecountrytobeincreasinglydependentonexternalsourcingforfoodas
thereisuncertaintyinitslongterminternationalsupply.However,economicfactors
limitMalaysia'scapabilitiesinenhancingdomesticsupplytofullymeethertotalfood
requirements.Againstthisscenario,NAP3willfocuspolicyformulationtoenhance
domesticproductionandstrategicsourcingtoensureadequatesupplyandaccessibility
ofsafe,nutritiousandhighqualityfoodataffordableprices.Measureswillalsobe
undertakentopositionMalaysiaasaglobalplayerinselectedfoodproductswhichhave
comparativeadvantageintheinternationalmarket.Anationalfoodsafetyinitiativewill
beformulatedtoimprovethesafetyofthenation'sfoodsupply.

29.Duringthe19952010period,thevalueaddedofthefoodsectorisprojectedto
growat3.8percentperannum.Betterperformanceisexpectedtocomefrom
vegetables,fruits,livestockandfisheries.Theshareoffoodproductstotheagricultural
GDPisexpectedtoincreasefrom26.2percentin1995to32.3percentin2010.
Productionofmajorfoodcommoditiesisprojectedtogrowat3.8percentperannum
until2010.Thestrategicdirectionsforthemajorfoodcommoditiesare:Paddy

30.Theeightgranaryareaswillbedesignatedaspermanentpaddyproducingareasto
realiseaminimumselfsufficiencylevel(SSL)forriceof65percent.Effortswillbe
undertakentoenhanceyieldfrom4.0tonnesperhectarein1995to5.5tonnesper
hectarein2010andincreasecroppingintensityfrom177percentto185percentinthe
eightgranarieswithinthesameperiod.Efficiencyofpaddyproductionwillbeenhanced
byencouragingandsupportingthedevelopmentoflargescalecommercialoperationin
theformofgroupfarmingandestatetypeproductionsystem.Thiswillcreatelargerand
moreviableproductionunits.Theinvolvementofprivatesectorinlargescalepaddy
productionandsupportindustrieswillbeencouraged.SuitableareasespeciallyinSabah
andSarawakwillbeidentifiedforlargescalecommercialpaddyproductionbythe
privatesector.Unproductivepaddyareasoutsidethegranarieswillbeconvertedinto
otheruses,inparticularforagroforestry.Alandregistryorinformationcentrewillbe
establishedtocollectanddisseminateinformationonidlepaddylandforthepurposeof
actingasclearinghousebetweenlandownersandentrepreneurialfarmers.TheRice
Order(PriceandGradeControl)1992willbereviewedwiththeaimtofurther
deregulatetheindustrytoallowmarketforcesandpreferencestodeterminepriceand
quality.Thepriceandfertilisersupportprogrammeswillberepackagedtoallowfor
longtermstructuraladjustmentoftheindustryinlinewithinternationalobligations.
Environmentfriendlygoodfarmpracticessuchasprecisionfarming,integratedpest
management(IPM),soilandwaterconservationmeasureswillbeintensified.Reverse
investmentinpaddyproductioninlowcostriceproducingcountrieswillbeencouraged.

Livestock

31.Effortswillbeundertakentoensureadequatesupplyofpoultryandeggsforthe
domesticmarketandtocapitaliseonexportmarkets.Theproductionoffreshbeef,
muttonandmilkwillbeenhancedforthedomesticmarket.Privatesectorled
commercialproductionwillbeactivelyencouragedtoadoptmodernapproachesand
farmingonlargescalebasis.Smallholderlivestockactivitieswithpotentialwillcontinue
tobetransformedintolargercommercialoperationstoimproveefficiency.Effortswill
beundertakentostrengthenthelinkagesoftheseoperationswithsuppliers,processors
andmarketerstofurtherenhancetheverticalandhorizontalintegrationoftheindustry.
Livestockintegrationwiththeplantationcropswillcontinuetobepromoted.Effortswill
beundertakentodevelopandexploitMalaysia'spotentialasaninternationalhalalfood
hub.Capabilityforinspection,monitoring,standardisationandcertificationfor
MalaysianHalalStandardforlivestockproductsandindustriallivestockbasedinputswill
bestrengthenedandthisstandardwillbeinternationallypromoted.Theinternational
marketingofbrandedhalallivestockproductsandindustriallivestockbasedinputswill
beundertaken.

Fisheries

32.Thefisheriesindustry,particularlydeepsefishingandaquaculturewillbefurther
developedonacommercialandintegratedbasis.Thedevelopmentwillfocuson
conservationandutilisationoffisheriesresourcesonasustainablebasis.Itwillbe

adequatelysupportedwithmodernfisheries'infrastructure,processing,marketing
network,comprehensiveHRDaswellasresearchanddevelopment(R&D)programmes.
Privatesectorparticipationincommercialfishing,aquaculturesuchaslargescaleopen
marinecageculture,andfeedandfryproductionwillbefurtherencouraged.
Governmentwillundertakeeffortstounifyindividualentrepreneursincludingsmalland
mediumenterprises(SMEs)inprocessingtoformconsortialedbycorporateleadersto
ventureintocommercialfishing,developandmanageintegratedprocessingcomplexes
andmegafishingports.Thiswillsecureeconomiesofscale,moderniseoperations,
enhanceventuresintoexportmarketsandalsoattractforeignvesselstolandtheir
catchesinMalaysia.Itwillalsostrengthenlinkagesamongfishing,processingand
supportingindustries.Jointventuresbetweenlocalandforeignprivatesectorwillbe
promotedundertheIndonesiaMalaysiaThailandGrowthTriangle(IMTGT),Brunei
IndonesiaMalaysiaPhilippineEastASEANGrowthArea(BIMPEAGA)andtheIndonesia
MalaysiaSingaporeGrowthTriangle(IMSGT)toengageindistantwaterfishing.

Fruits

33.Thefruitindustrywillbefurtherdevelopedtomeettheexpandingdemandforfresh
andprocessedtropicalfruitsinboththeinternationalanddomesticmarkets.Fifteen
fruitswhichhavebeenidentifiedfordevelopmentincludebanana,papaya,pineapple,
watermelon,starfruit,mango,durian,jackfruit,rambutan,citrus,dukulangsat/dokong,
cempedak,guava,cikuandmangosteen.Specialfocuswillbegiventomangosteentobe
developedextensivelyandaggressivelymarketedfortheglobalmarketastheflagshipof
Malaysianfruitsindustry.Institutionalsupport,infrastructureandincentiveswill
continuetobeprovidedtoencourageprivatesectortoventureintolargescale
commercialproduction.Newprocessedproductssuchasminimallyprocessedfruits,
naturalfoodingredients,functionalfood,modifiedfoodingredient,conveniencefood,
frozenfruits,beveragesandhighfibreproductswillbeexploitedtocatertothe
increasingdemandinnichemarkets.Tomeettherequirementforrawmaterialsforthe
processingindustriesandincreasingdomesticdemandfortemperatefruits,reverse
investmentswillbeencouraged.EmphasiswillalsobegiventoHRDtogeneratehighly
skilledandinnovativemanpowerinnewandemergingsciencesuchasfood,genetic
engineeringandbiotechnology.

Vegetables

34.Vegetableproductionwillbefurtherexpandedtomeetdomesticandexport
demand.Existingproductionareas,suitablestatelandandnongranaryareasnearurban
centreswillbezonedaspermanentvegetableareasandleasedtotheprivatesector.
TheGovernmentwillcontinuetoprovideinstitutionalsupport,infrastructureand
incentivestoencourageprivatesectortoventureintolargescalecommercial
production.Newprocessedproductssuchasminimallyprocessedvegetables,flour
basedproducts,naturalfoodingredients,functionalfood,vegetarianandreformulated
vegetarianfoodproducts,modifiedfoodingredients,highfibreproducts,convenience
foodandbeverages,andbyproductutilisationwillbeexploitedtocatertothe

increasingdemandinnichemarkets.Hightechnologyproductionofhighvalue
temperatevegetablesinthelowlandsusingcontrolledenvironmentwhichincludesrain
sheltersandnettedstructureswillbepromoted.Qualitywillalsobeemphasised
throughproductdifferentiationandproductbrandnamessuchaspesticidefree
vegetablesandorganicfarmproduce.R&Deffortsoncosteffectiveproduction,post
harvesthandlingandprocessingwillbeintensifiedwithparticularemphasison
agriculturalmechanisationandlaboursavingtechniques.Themarketingsystemwillbe
upgradedbyimprovingefficiencyoftheexistingmarketingchannelsandfurther
developmentofaparallelmarketingchannel.Offshoreinvestmentwillbeencouraged
tomeettherequirementofrawmaterialsfortheprocessingindustry.Industrialcrops,
forestryandwoodbasedproductgroup

35.Thisgroupconsistsofoilpalm,rubber,cocoaandforestryandisthevitalsourceof
rawmaterialssupplytotheresourcebasedindustries.Itmainlyservestheexport
marketandisanimportantrevenueearnerforthecountry.Thestructureofproduction
andmarketingformostproductsofthisgroupishighlyorganisedwithadvanced
managerialandtechnologicalpractices.

36.InconsonancewiththeindustrialisationstrategiesidentifiedundertheSecond
IndustrialMasterPlan(IMP2)19962005,thedevelopmentoftheindustrialcrops,
forestryandwoodbasedproductgroupwillcontinuetobeencouragedandsupported
byappropriateincentives,infrastructure,R&D,supportingservicesandHRD.Thethrust
ofdevelopmentforthisgroupwillfocusonrestructuringandmodernisingtheindustry
toenhanceitsglobalcompetitiveness.NAP3willfocuspolicyformulationtoensure
adequatesupplyofrawmaterialsfortheprocessingandmanufacturingindustriesfor
theproductionofhighvalueaddedproductsforexport.Malaysia'spositionasa
renownedcentreofexcellenceforR&Dandproductdevelopmentwillbestrengthened.
Forestryresourceswillbeconserved,managedandutilisedonasustainablebasis.
Effortswillbeundertakentoreducelabourinputsthroughmechanisationanduseof
appropriatelaboursavingtechniques.Agroforestryinvolvingintegrationofforestryand
agriculturalactivitieswillbepromoted.

37.Duringthe19952010period,thevalueaddedofthisproductgroupisexpectedto
continuetogrowfromRM11.5billiontoRM13.3billion.However,itsshareto
agriculturalGDPisexpectedtodecreasefrom71.0percentto57.9percentmainlydue
todecreaseincontributionfromrubberandsawlogs.Thestrategicdirectionsforthe
developmentofthecommoditiesinthisgroupare:Oilpalm

38.Thegrowthoftheoilpalmindustrywillbesustainedthroughproductivity
improvementsanddevelopmentofnewvarietiesforspecificfunctionalenduses.Focus
willalsobegiventoproductivityimprovementinthedownstreamprocessingand
manufacturingofhighervalueaddedpalmoilproductssuchasoleochemicals.Inline
withthevisionofmakingtheoilpalmindustryasasustainable'zerowasteindustry',
exploitationofoilpalmbiomasswillbefurtherintensified.Futureproductionand
expansionofoilpalmcultivationwillbeinSabahandSarawakorthroughreverse

investmentinneighbouringcountries,SouthPacificIslands,AfricanandLatinAmerican
countries.R&Dinlaboursavingtechnologysuchasmechanisationandautomationin
harvestingoperationwillbeintensifiedtoreducelabourinputsinoilpalmcultivationso
astoenhancetheindustry'scompetitivenessintheworld'soilsandfatsmarket.Market
researchandsurveillancewillbeenhancedinlinewiththemarketingstrategyto
strengthentraditionalandexistingmarketsaswellastodevelopandpenetratenew
ones.Integratedfarminginoilpalmplantationswillcontinuetobeencouragedto
maximisereturnsfromland.

Rubber

39.Thefuturedevelopmentoftherubberindustrywillbebasedupontheintegrationof
three
distinctusesofnaturalrubber,namelylatex,heveawoodandrubberbasedproducts
intoasingleentity.Theproductionofnaturalrubberwillbesustainedatabout750,000
milliontonnesperyearfrom1.2millionhectaresofrubberareas,tofeedthe
downstreamprocessingandmanufacturingofhighervalueaddedrubberbased
productsforexports.Uneconomicsizedsmallholdingswillbereorganisedand
consolidatedintoestatetypeproductionunitstoachieveeconomiesofscale.Replanting
ofrubberwillalsobeundertakenaspartofthereforestationprogrammeseithersolely
foritslatexorforbothlatexandheveawoodwhichisgainingpopularityamongfurniture
industry.Hedgeplantingorintercroppingrubberwithotherpotentialtreespecieswill
beencouragedtoobtainmaximumreturns.R&Deffortswillbedirectedtowards
developingnewformsandusesofrubberandrubberproducts,mechanisationin
farmingoperationsandpropagatinghighyieldingclones.Effortstoimplementthe
transferandassimilationoftechnologyespeciallythelaboursavingextraction
techniqueswillbeintensifiedandaccelerated.Marketresearchandsurveillancewillbe
enhancedinlinewiththemarketingstrategytostrengthenandpenetratetraditional
marketsaswellasdevelopingnewones.

Cocoa

40.Effortswillbeundertakentoincreaseproductivitythroughimprovementinfarm
managementandtheuseofhighyieldinghybridplantingmaterials.Uneconomicsize
holdingswillbeconsolidatedintoestatetypeproductionunitstoachieveeconomiesof
scale.Unproductiveholdingswillberehabilitatedwithnewhighyieldingandpestand
diseaseresistantclonestoincreasetheaverageyield.R&Dwillbedirectedtowards
developinglaboursavingtechnologiesandnewproductsforthehighendexport
markets.Initiativestoenhancethequalityofcocoabeansandcocoaproductstoattain
thedesiredqualityandinternationalstandardswillbeundertaken.Marketresearchand
surveillancewillbeenhancedtopenetratetraditionalmarketsaswellasdevelopingnew
ones.

Forestryandwoodbasedproducts

41.Sustainableforestmanagementwillcontinuetoremaintheunderlyingbasisof
forestrymanagement.Effortswillbeundertakentoincreasethemarketabilityoflesser
usedspeciesandsmalldiameterlogs,andexploretheprospectsandvalueofnon
timberproductssuchasrattanandbambooandecotourism.ThePFEswillbe
maintainedandwherepossibleexpandedthroughconversionofStatelandforestinto
PFEs.R&Dwillemphasiseonappliedforestmanagement,resourcessurveyand
monitoring,silviculture,reforestationandrehabilitation,environmentalstudiesand
utilisationofforestresources.Toreducepressureonthenaturalforestforrawmaterial
supplies,forestplantationsbytheprivatesectorwillbeactivelypromoted.Theplanting
oftreespeciesofhighcommercialvaluesonidlelandandconversionofexisting
abandonedplantationsintoplantationforestswillbeencouraged.Thecompetitiveness
ofthewoodbasedindustrywillbefurtherstrengthenedthroughproductdifferentiation
andinnovativemarketinginnichemarkets.Thiswillinvolvetheproductionofhighend
productswithsuperiortechnicalqualitiesanduniqueproductdesignthroughMalaysian
OwnBrandManufacturingandMalaysianOriginalDesignManufacturing.

42.Therattanandbambooindustryhasthepotentialtobefurtherdevelopedtoexploit
theexpandinginternationalanddomesticdemandforrattanandbamboobased
products.Theprivatesectorwillbeencouragedtodeveloprattanandbamboo
cultivationindegradedforests,idleandabandonedland.Integratingthecultivationof
rattanandbamboowithothercropswillbepromotedinordertomaximiseland
utilisationandreturns.Improvementofplantingmaterials,productionandprocessing
technologieswillbeundertakenthroughintensifyingR&Deffortsandtheadoptionof
newtechnologiesavailableinthemarket.

43.Itisestimatedthatabout30.0milliontonnesofoilpalmbiomassareavailable
annuallycomprising8milliontonnesoftrunks,1.4milliontonnesoffelledfrondsand18
milliontonnesofprunedfrondsand3milliontonnesofemptyfruitbunches.Theprivate
sectorwillbeencouragedtoutiliseoilpalmbiomassfortheproductionofcomposite
woodproducts,furnitureandpulpandpaper.

44.Agroforestrywhichisalandusemaximisationconceptthatinvolvestheplantingof
agriculturalcropsandforestspeciesonagriculturelandandwhichalsoinvolvesthe
cultivationofshorttermcropsinforestplantationsduringtheearlyphaseof
establishmentwillbeactivelypromotedandencouraged.Stepswillbetakentosupport
andencouragesmallholdersandfarmerstoventureintoagroforestryinvolvingthe
cultivationofforesttrees,rattan,bamboo,medicinalplants,agriculturalcropssuchas
foodcrops,rubberandoilpalm,therearingoflivestockandaquaculture.Theprivate
sector,particularlytheplantationsector,willbeencouragedtoundertakeagroforestry
onalargescalebasisthroughadoptingmixedcroppingasasystemofcultivationintheir
plantations.EffortswillalsobeundertakentostrengthenR&Dactivitiesrelatedto
agroforestrytoidentifysuitablecropsandforesttreespeciesthatcanbeeffectively
integratedtoyieldmaximumoutput.

Newproductsandfutureindustrygroup

45.Thisgroupconsistsofnewandemergingproductsinagricultureandforestrywhich
havehighpotentialtobefurthernurturedanddeveloped.Basedondemandprospects
andexpectedhighreturns,thisgrouphasthepotentialtobeanimportantsourceof
growthforagricultureandforestry.Technologyandproductdevelopmentwillbethe
majordrivingforceinenhancingindustrialprospects.Productsinthisgroupinclude
biotechnologicalproducts,specialtynaturalproducts,floriculturalproducts,aquarium
fishandaquaticplants,equineandexoticanimals,sagoandagrotourismproducts.For
thedevelopmentofthenewproductsandfutureindustries,thestrategicdirectionsare:
Agribiotechnologyandspecialtynaturalproducts

46.Theeconomicfoundationforthedevelopmentofagribiotechnologyandspeciality
naturalproductsindustrieswillbestrengthened.Governmentsupportandcommitment
forastrongR&DandHRDprogrammewillbeintensifiedtobuildupapoolofworld
classresearchersandtechnicalpersonnel.Currentincentiveframeworkwillbe
continuedtoaccelerateestablishmentanddevelopmentoftheseindustries.This
includesprovisionofnewandadditionalfundingforresearchfacilitiesandthesettingup
ofmoreincubationcentres.Moreconservationactivitieswillbeundertakentopreserve
andmanagebiologicaldiversityandlegislationintroducedtoregulateaccesstogenetic
resources.Programmestodomesticateandcultivatevaluablespeciesonlargescale
commercialbasis,aspartofagroforestry,orplantationforestsandcommunityforests
willbeformulatedandimplemented.Facilities,equipmentandpersonnelwillbe
providedforscientificvalidationofhealthclaimsandtoxicologystudiestoensuretheir
acceptancebyandforthesafetyofconsumers.

47.Publicsectordrivenjointventureprogrammesandprojectsinvolvingtheprivate
sectorwillbeintensifiedtocommercialiseresearchfindingsandnewinnovations.Agro
technologyparkswillbedevelopedtofacilitateprivatesectorinvestmentsinthese
industrieswhichemploythelatestorfrontiertechnology.

Floriculturalproductsandaquariumfish

48.Malaysiaasthesourceandexporteroftropicalfloriculturalproducts,aquariumfish
andrelatedproductswillbeextensivelypromoted.Governmentsupportand
commitmentwillbedirectedtomakeMalaysiaastheglobalcentrefortheseproducts.
Thisincludestheestablishmentofnationalandinternationallogisticsandmarketing
network.Potentialareasforimmediateestablishmentoflargescalecommercial
productionwillbeidentifiedthroughzoningandalienationoflandonthelongerterm
leaseholdbasis.Largescaleautomatedproductionandpostharvesthandlingwillbe
encouragedtoreducecostandrelianceonlabour.R&Dwillbeintensifiedtoproduce
newspeciesandvarieties,andtodevelopcosteffectiveproductionandpostharvest
handlingtechnologies.

Sago

49.Starchisoneofthemostabundantnaturalmaterialsthatcanbereadilyconverted
chemically,physicallyandbiologicallyintochemicalswhicharetraditionallyderived
frompetroleumforsynthesisintousefulproducts.Thesenewstarchbasedproducts
includebiodegradableplastics,biopolymerplastics,waterabsorbentpolymerandstarch
mediumforencapsulation.Sagostarchisoneofthestarchesthatcanbeexploited
commerciallyforthesepurposes.Sagocultivationwillbeencouragedinthepeatlandof
Sarawakgiventhecrop'sadaptabilitytonaturalpeatswampconditions.Commercial
plantingonalargescalebytheprivatesectorwillbeencouragedtoreducecostand
increaseproductivity.R&Demphasiswillbegiventorapidpropagationofhighquality
plantingmaterials,farmmanagement,processingtechnology,newproduct
developmentandbyproductutilisation.

Roselle

50.Thecultivationofrosellewillbeencouragedparticularlyonbrissoilasanalternative
croptotobacco.Largescaleproductionwillbepromotedtoreducecostofproduction
andrealiseeconomiesofscale.

Equineandexoticanimals

51.Privatesectorparticipationinthedevelopmentoftheequineandexoticanimalsfor
sportsandrecreation,exoticmeatandotheranimalproductswillalsobeencouraged.
Thedevelopmentofthisindustrywillfocusonselectedspecieswhichhavehighmarket
valueanddemand.

Agrotourism

52.Agrotourism,anactivitywhichmaximisestheuseoffarmsettingsandthe
environmentwithhospitalitywillbepromoted.InMalaysia,agriculturalareasand
activitieshavemanyvisitorattractionswhichcanformthebasisofdestination
developmentfortourists.Theseareaswillbedevelopedintouniquedestinationsforthe
enjoyment,relaxationandeducationoftourists.Inaddition,suitablemarineareasand
publicwaterbodieswillbedevelopedforsportfishing.

Othereconomiccropsproductgroup

53.Thisgroupconsistsofcoconut,pepper,tobacco,andothermiscellaneouscropssuch
assugarcane,cassava,sweetpotato,maize,teaandcoffee.Thisgroupisgenerally
characterisedbydwindlingorstagnatingoutputandrelativelylowerproductivity.Some
ofthesecommoditiesplayanimportantsocioeconomicroleinthewelfareoftherural
community.UndertheNAP3,whereviable,productionofthesecommoditieswillbe
encouragedforimportsubstitutionandforsupplyingqualityrawmaterialsforthe
furtherdevelopmentofdownstreamactivities.R&Dandnecessarysupportwillbe

providedtofurtherenhancethedevelopmentofmorehighvalueaddedproducts.

ECONOMICFOUNDATION

54.TherealisationoftheobjectivesofNAP3requiresastrongereconomicfoundationto
furtherincreaseefficiency,productivityandcompetitivenessofMalaysianagriculture.
Thiswillinvolvethefurtherdevelopmentofkeyelementsofeconomicfoundation,
includinghumanresource,technology,physicalinfrastructure,financeandincentives,
supportingindustriesandinstitutions.Humanresourcedevelopment

55.Agriculturaldevelopmentwillbegearedtowardsusinglesslabourinagriculture.The
reductioninlabourutilisationwillbeattainedthroughthecultivationofnewcropsthat
requirelesslabourinputs,mechanisedandautomatedproductionsystemsand
processes,theuseoflaboursavingtechnologiesandthereductionoflabourintensive
agriculturalenterprises.Inaddition,landlabourratiowillbefurtherimprovedthrough
restructuringofproductionunitstoallowforlargerscaleoperations.

56.Humanresourcedevelopmentwillfocustowardsthesupplyofskilledmanpowerat
theR&D,entrepreneurialandmanagerial,andoperationalorworkforcelevelsfornew
andemergingareas.Theseareasincludebiotechnology,mechanisationandautomation,
productionsystemsundermodifiedenvironment,enforcementofsanitaryand
phytosanitarymeasures,standardsandgrades,resourceconservation,andgoodfarming
andaquaculturepractices.Theshortageofhumanresourceswillbeaddressedthrough
formalandnonformaltraining.

57.Agriculturalandforestryeducationwillbestrengthenedandmademoreflexibleto
meetthetechnologicalandfuturisticnatureofagriculture.Itwillbegearedtomeetthe
everchangingdemandsofthejobmarketandattractyouthtotheagriculturaland
forestryprofessions.Trainingwillfocusontheachievementofhighproductivityamong
theproducersandworkersbyfacilitatingtheabsorptionofnewskillsandknowledgeto
implementprecisionagriculture,mechanisation,IPMandcontrolledenvironment
productionsystem.Farmersandfishermen'strainingwillbeintensifiedtoequipthem
withbettermanagerialandentrepreneurialskillstoundertakecommercialmixed
farming.

58.Asatransitionalmeasure,theGovernmentwillcontinuetoadoptaliberalpolicyon
therecruitmentofforeignworkersfortheagriculturalsector.However,a
comprehensiveforeignlabourpolicywillbeformulatedandproducerswillbegivena
specifictimeframetograduallyphaseouttherelianceonforeignlabour.

Technology

59.Technologyforagriculturaldevelopmentwillfocusonintensifyingtheuseofexisting
conventionaltechnologiesaswellasprospectinganddevelopingthepotentialsand

applicationsofnewandemergingtechnologies.Initiativeswillbepursuedinthe
developmentofindigenoustechnologiesaswellasblendingtheconventional
technologieswithfrontiertechnologies.Thisistoharnesstheconsiderablebenefitsthat
existintheirutilisationwhileretainingsomeofthestrongercharacteristicsofthe
traditionaltechniquestoachievehigherproductivityandqualityandincrease
competitivenessofthesector.

60.Amongthestrategicinitiativesare:

*theuseofplantcellandtissueculturetechniquesaswellasgeneticengineeringto
complementconventionalplantbreedingindevelopingnewcropvarieties;
*theuseofplantcellculturestoenhancethedevelopmentofnewandinnovative
productsincludingmetabolitessuchaspharmaceuticalsandfoodadditives;
*theapplicationofembryomanipulationtechnologyandtheuseofgenetically
engineeredvaccinestostrengthenexistingtechnologiesforincreasinganimal
productivity;
*theincorporationofroboticsandartificialintelligenceaswellascomputermodelling
andmicroprocessorcontrolinmachineryandautomationequipmenttoreducelabour;
*theapplicationofadvancedprocessingandpackagingsystemstostrengthenand
enhanceconventionalandtraditionaltechniquesforbetterpostharvesthandlingand
storageandlongershelflifeofagriculturalproducts.

61.Masteryofuseofinformationtechnologieswillbeemphasisedtoenhancethe
acquisitionanddisseminationofnewknowledgeandtechnologiesandtoimpartayouth
orientationtotechnologydevelopmentandtransfertocaterforthepredominantly
youngpopulations.Advancein"expertsystems"orcomputersimulatedscenario
analysiswillbeexploitedtoenhanceonfarmadviceandinformationexchangeto
agricultureproducersthroughextension.Technologytransferandcommercialisation
systemofR&Dfindingswillbefurtherstrengthenedthroughincubatorsandcontract
R&D.Appliedsocioeconomicresearchwillbeintensifiedtosupporttechnologyand
innovativedevelopment.Infrastructuraldevelopment

62.InfrastructurewillbeprovidedtopromotePrecisionAgricultureorPrecision
Farming,anintegratedmanagementsystemforcropproductionthatusessitespecific
datatomaximiseyields,useinputsmoreefficiently,decreaseenvironmentalimpacts
andincreasefarmer'sprofitmargin.Newstrategieswillbedevelopedtoreducethe
Government'sfinancialburdenofdeveloping,managing,operatingandmaintaining
infrastructuresystem.Apracticalcostrecoverysystemwillbeintroducedtorecover
partoftheGovernment'sexpenditureintheprovisionofinfrastructureandfacilities.

63.Agrotechnologyparkswillbedevelopedtopromotehightechnologyagricultural
productionsystemsthatemploythelatestorfrontiertechnologyinagriculture.Such
productionsystemsinvolvemechanisedandautomatedoperations,precisioncontrolof
inputandgrowingenvironment,productionofqualityandhighvalueproductsanduses
environmentfriendlyandsustainabletechnology.Incentiveswillbeprovidedto

encourageinvestorstoestablishtheiroperationsintheseparks.

Financingandincentives

64.TheGovernmentwillcontinuetoprovideincentivesforprivatesectorR&D,provision
ofwarehousingfacilities,HRDandcommercialisationofR&Doutputs.Incentiveswill
alsobeprovidedfortheexportofconsultancyservices,theprovisionofqualityand
safetytestingservices,andthedevelopmentofagriculturalinformationtechnology
system.Thecurrentpackageofincentivesforthepromotionofinvestmentsinfood
productionandthenewemergingareasofagricultureandagriculturerelatedactivities
willbecontinued.Thelistofpromotedactivitiesandproductswillalsobereviewedin
linewiththenewfocusanddirectionofagriculturaldevelopment.Softloanswill
continuetobeprovidedtocriticalareassuchasfoodproduction,mechanisationand
automation,commercialisationofagriculturalR&Doutput,andbumiputraparticipation
incommercialagriculture.Guidelinestopromoteforeigninvestmentinagriculturewill
beformulated.

Inputindustries

65.Competitiveagriculturalproductiondependsontheefficientsupplyofexternal
inputssuchasfertilisers,agriculturalchemicals,seeds,plantingmaterials,feeds,and
agriculturalmachineryandequipment.Inrecentyears,thepricesoftheseinputshave
increasedleadingtohighercostofproductionandthisaffectsthecompetitivenessof
Malaysianagriculture.Effortswillbeundertakentoimproveefficiencyoftheinput
industriesandminimisetheincreaseinpricesoftheseinputs.Towardsthisend,the
Governmentwillcontinuetoprovideanattractiveenvironmentincludingincentivesfor
thedevelopment,expansionandmodernisationoftheseinputindustries.Business
supportservices

66.Thecapacityandqualityofsupportservicesarevitalinincreasingtheefficiencyand
strengtheningthecompetitivenessoftheagriculturalsector.Effortswillbeundertaken
tofurtherstrengthensupportservicesintheareasofagriculturalmarketing,extension,
advisoryandconsultancy,credit,insurance,informationandlogisticservicessuchas
warehousing,distributionandtransportation.

Institutions

67.Areviewandrationalisationoftheexistinginstitutionalarrangementsisnecessaryto
makethemmoreeffectiveinsupportingagriculturaldevelopmentandfacilitating
commercialisationandgrowthofthesector.Currently,theGovernmentplaysaleading
roleinthesector'sdevelopmentthroughtheprovisionofvarioussupportservicesand
infrastructuralfacilities.NotwithstandingtheGovernment'scommitment,theprivate
sectoralsocontributessignificantlytowardsthesector'sdevelopmentespeciallyinthe
plantationsubsector.Boththepublicandprivateinstitutionsinvolvedinagricultural
developmentneedtofurtherstrengthentheircollaborationandcooperationtowards

makingthesectormoreresilientandcompetitivearisingfromglobalisationand
liberalisationofagriculturaltrade.

68.Thefollowinginstitutionalframeworkhasbeenidentifiedtostrengthenthe
implementationoftheNAP3.PublicprivatesectorcollaborativemechanismThe
consultativeandcollaborativemechanismbetweenthepublicandtheprivatesectorwill
befurtherstrengthenedthrough:establishmentofaPrivatePublicSectorCo
ordinationCounciltooverseeandcoordinatetheimplementationofNAP3.TheCo
ordinationCouncilmayestablishvariousworkinggroupstoplanimplementthe
developmentofthesectorandthekeyindustries.MembersoftheCouncilwould
includerepresentativesfromtheFederalandStateGovernmentsaswellasfromthe
privatesector;establishmentofadedicatedsecretariatintheMinistryofAgriculture
andintheMinistryofPrimaryIndustriestoprovideinstitutionalsupportfortheCouncil.
Thesecretariatwilldevelopanetworkwiththeprivatesectorandthestate
governments;establishmentofaonestopcentreintheMinistryofAgriculturetoserve
theneedsoftheprivatesector.Thiscentrewillbeelectronicallylinkedtootherrelevant
focalpointstoallowformoreefficientcommunicationservice;andtrengtheningthe
roleofAgrolinkandICIS(IntegratedCommodityInformationServices)asefficient
providersoflocalandglobalinformation,andasatoolforrapidcommunicationforall
partiesinvolvedinagriculturaldevelopment.

FederalStatecooperation

*Tofacilitatethecreationofaconduciveenvironmentandtransformtheagricultural
sectorintoahighlycompetitiveandcapitalintensiveindustry,consultationsbetween
theFederalandStateGovernmentswillbeimprovedthrough:

establishmentofahigherlevelPlanningandImplementationCommittee;and
adedicatedSecretariattofollowthroughthedecisionsoftheCommittee.Roleof
farmers'organisationandfishermen'sassociation

*Theroleoffarmers'organisationsandfishermen'sassociationswillbestrengthened
throughtheactiveparticipationoftheseorganisationsasbusinessentitieswithinthe
agriculturalsector.Aninstitutionalframeworkwillbeestablishedthatwillencourage
greaterlinkagesbetweenthefarmers'andfishermen'sinstitutionsandotherinvestors
includingprivatecorporationswhichmayleadtomorejointventures.The
Government'sroleintheproductionofseeds,seedlings,fishfryandtradingwillbe
reviewedonthefeasibilityofthisrolebeingundertakenbythefarmers'andfishermen's
corporationsandprivatesector.

RoleofGovernmentInstitutions"Government'sinstitutionswillbereviewedand
rationalisedtoenhancetheeffectivenessofdevelopmentprogrammesandthedelivery
ofsupportservicestoagriculturalenterprisestoachievetheirbusinessobjectivesand
enhancetheirinternationalcompetitiveness.Thiswillincludethepossibilityof
consolidatingdifferentinstitutionsthatundertakethemanagementanddevelopmentof

similarcommoditiesintoasingleentity.Government'sinvolvementinagriculturewillbe
focusedinprovidingcriticalsupporttofacilitateandenhancethebusinessand
developmentactivitiescarriedoutbytheprivatesectorandproducers."Toencourage
greaterprivatesectorinvestments,theroleofGovernmentasafacilitatorwillbefurther
intensifiedthrough:

establishmentofacomprehensivedatabaseonlandthatcanbemadeavailableto
potentialinvestors.Thedatabasewillincludeinformationonland,thelandownersas
wellasthetermsandconditionsoftheleaseorrental.Anagencywillbeappointedto
undertakethistask;
undertakingareviewofthecurrentrulesandproceduresthataffecttheoperations
andimpedeinvestmentsbytheprivatesector;
encouragingtheparticipationandinvolvementoftheprivatesectorinR&D,eitheron
theirownorjointlywithgovernmentinstitutions,andinthedevelopmentand
acquisitionoftechnologytoaccelerateinnovationandcommercialisationofthesector;
strengtheningthelinkageswithMITI,MinistryofForeignAffairs,MATRADEandMIDA
whichhaveofficesinmanyforeigncountriesinordertobeinformedoninvestment
opportunitiesinagricultureandotherrelatedinformation;and
strengtheninglinkageswithrelevantinternationalbodiestosupportMalaysian
agriculturalinterests.

*Tosupportthedevelopmentofcompetitiveandsustainableagriculturalindustry,
GovernmentR&Dprogrammeswillfocuson:

conductingindustrialdriventechnologiesincollaborationwithindustry;
producingpublicgoodtechnologies;
commercialisingresearchfindings;and
conservingandutilisingnaturalresourcessustainably

*Toacceleratethedevelopmentofinformationintensiveandknowledgebased
agriculturalindustries,Governmentwillundertakethefollowinginitiatives:

establishmentofaNationalAgriculturalInformationCentrewithacentralisedand
electronicallylinkeddatabasetosupportdecisionmaking,businessdevelopmentand
marketingactivities;
reorientationoftrainingprogrammetowardsmoremarketdrivenshortcoursesand
specializedtrainingprogrammesinagriculturalproductionandmanagement.A
feasibilitystudyontheestablishmentofaNationalAgriculturalTrainingCentretoplan
andconductsuchcourseswillbeundertaken;and

*Tomaximiselandutilisationforagriculture,Governmentwillundertakethefollowing
initiatives:

makesuitablelandavailableandaccessibletopromoteandencourageprivatesector
participationonalongtermbasisforlargescalefoodproductionandprocessing

throughidentificationandzoningofstatelandaspermanentfoodproductionareas.A
landregistryorinformationcenterwillbeestablishedtocollectanddisseminate
informationontheavailabilityofidlelandstopotentialentrepreneurs.
currentdevelopmentprogrammesonidlelandwillbeimprovedandstrengthenedand
willemphasizeonincreasedfarmers'participationthroughtransformationand
reorganizationoffarmsintolargerscalecooperativesandgroupfarmingoperations.The
implementationofafairandequitablelandlordintrustschemewillbepromoted.
maximisingtheuseofthelimitedlandresourcesthroughthepromotionof
agroforestryenterprises,integrationoflivestockwithplantationcropsandpromotionof
largescaleintensivemixedfarmingventures.Intercroppingofshorttermfoodcrops
betweenimmaturerubberandoilpalmstandwillalsobepromoted
Stategovernmentswillbeencouragedtoundertakesystematicplanningof
developmentprojectsinvolvingforestland.Theopeningupofforestlandforagricultural
developmentwillbeinaccordancewiththeprinciplesofsustainableforestmanagement
includingprotectingtheenvironmentandconservingbiologicaldiversityandgenetic
resources.

*Toimproveefficiencyandeffectivenessofwaterresourcemanagementandutilisation
foragriculture,thefollowinginitiativeswillbeundertakenbytheGovernment:

focussingontheefficiencyoftransportsystemthroughconservationandprioritisation
ofwaterresourcesforsustainableagriculture.Thisincludeswatersavingmeasuressuch
asautomationofwatercontrolanddistribution,waterrecycling,effectivefarmwater
managementanddevelopmentofwaterpricingsystem.
adoptingeffectiveandefficientfieldwatermanagementpracticestofullyexploitthe
fieldenvironmenttomaximisecropgrowthandyieldandminimisefertiliser,pesticide
andweedicideresiduesingroundwater.
strengtheningthecoordinationandlinkagesofinteragency,interstateandfederal
stateinstitutionsinwaterresourcesmanagement.

*ToprotectMalaysia'sagriculturefromforeignpestsanddiseases,safeguardinghuman
healthandpromotesustainableagriculture,thefollowinginitiativeswillbeundertaken:

regulationswillbeimposedtopromotegoodfarmingandaquaculturepractices,
specificallyintheutilisationofcropprotectionchemicals,veterinarypharmaceuticals
andanimalfeed.Regulationwillalsobeintroducedforthestorageandhandlingofhalal
food,certificationofseedsandplantingmaterials,andefficientgradingsystemfor
agricultureproduce.
anationalfoodsafetyinitiativewillbeformulatedtoimprovethesafetyofthenation's
foodsupply.Thisinitiativewillcoverfoodsafetysurveillances,inspections,research,risk
assessment,training,educationandcoordinationamongregulatoryagencies.Measures
willalsobeintroducedtoencourageproducersormanufacturerstoimplement
preventivemeasuresoftheirownandincreasetheresponsibilityforandcontroloftheir
ownsafetyassuranceactions.Regulationswillbestreamlinedconsistentwiththestate
oftheartscientificprocedures.

regulationsforgoodmarketingpracticeswillbeintroducedtoensurehealthymarket
competitionandtransparentpricingaswellastoincreaseefficiencyofthemarketing
system."Therewillbeaneedtoreallocateresources(fundsandmanpower)inlinewith
thenewfunctionalresponsibilitiesofgovernmentdepartmentsandagenciesasfollows:

resourcesfromsubsidiestoinfrastructuraldevelopmentnecessaryforprovidinga
strongerfoundationforimprovedproductivity,reducedcostofproduction,efficientand
effectiveutilisationofresourcesandincreasedmechanisationoffarmingoperations;
and
resourcesfrominvolvementinproductionofinputsanddirecttradingtoregulatory
andenforcement,R&Dinnewemergingareas,credittocriticalareas,andmarketing
intelligence.

V.CONCLUSION

69.Theagriculturalsectorwillremainstrategicallyimportantasaprovideroffoodand
rawmaterialsfortheagroandresourcebasedindustrialdevelopmentduringthe
NAP3.Theemphasisonagriculturaldevelopmentwillshiftfromacommoditybased
approachtoaproductbasedapproachwhichfocusesonproductionofagricultural
productsbasedonmarketdemandandpotential,andconsumerpreferences.
Complementingtheproductbasedapproach,anagroforestryapproachwillbeadopted
tooptimiseresourceuseandmaximisereturns.Therichbiologicalresourcesofthe
countrywillbeconserved,managedandsustainablyutilisedforthedevelopmentofnew
productsandfutureindustriesasnewsourcesofgrowthfortheagriculturalsector.With
this,Malaysianagricultureissettoincreaseitsproductivityandcompetitiveness,
deepenlinkageswithothersectorsandventureintonewfrontierareas.

Source:MinistryofAgriculture