PRT 2008 AGRICULTURE AND MAN

CHAPTER 5:
AGRICULTURAL PRACTICES IN
MALAYSIA
LECTURER: PROF. DR. ZULKIFLI HJ SHAMSUDDIN

NAME:

MATRIC NO:

AZEELIA SONIA BAYANG

175639

BADRELDIN ABD ELHAKIM AHMED

181214

IFFAH AMIRAH BINTI HUSSIN ALI

172719

MOHAMMAD MARWAN BIN NAZAMDIN

174881

MUHAMMAD AZRI BIN MOHAMAD ARIS

172705

KHOR KANG YEAN

173332

THANASHANTHINI A/P SEKAR

172383

YUSAIRINA BINTI MOHD YUSOF

171800

Introduction
Agricultural is an important sector in the Malaysian economy. During independence in
1957, the agricultural sector contributed about 46% of the gross domestic product (GDP) and
80.3% of the employment. The percentage contribution of the agricultural sector to the GDP
declined to 7.52% and total employment in the agricultural sector accounted for only 11.8%
of the total labour market. Despite the relative reduced role of agriculture in the countrys
economy, this sector is given prominence in government policies. This is because of its
continued importance in earning foreign exchange through exports of palm oil, rubber and
fruits also its contribution to employment and its role in ensuring food security for the
country. The Ninth Malaysia plan emphasizes agriculture as the third engine of growth and
seeks to revitalize agriculture by adopting commercial and large scale agriculture and the use
of new technologies.
Historical Development of Malaysian Agriculture
The pre-independence development of Malaysian Agriculture was shaped by the interest of
the British colonialist. The introduction of rubber and the development of plantation
agriculture is one of the major developments during this period. British needed rubber for
their industrial expansion and the colonial administration encouraged the establishment of
rubber plantations such as Dunlop Plantation, Guthrie Plantation and Harrisons and
Crossfield. Malaysia became the large producer of rubber in the world. Besides rubber, tea
plantations such as Boh Tea were also established in the highland areas because of the high
market demand for tea. Cocoa and coffee were also grown. However, British agricultural
policy of this period neglected the provision of opportunities for the indigenous Malays to
participate in plantation agriculture. Besides, agriculture led by rubber and oil palm were the
dominant contributors to the Malaysian economy, providing the benefits of foreign exchange
income, capital creation and employment.
Characteristics of Malaysian Agriculture
The State and Smallholders Subsectors
The agriculture sector in Malaysia can be divided into two which are estate sub-sector and
smallholders subsector. The estate sub-sector is highly commercialized and efficiently
managed by the professionals. By definition, estates are land holdings that are larger than
40.5 ha. Usually they are owned by private companies, public listed corporate entities or even

public land development agencies. These companies are involved in the production of
industrial crops such as cocoa, rubber and oil palm. Next, smallholders subsector is less
commercialized and the average farm size is 1.45 ha. It is estimated that smallholdings are
operated by 1,033,065 farmers and the crop grown include the industrial crops, rice, fruits
and vegetables.

Table 1: Land Use in Malaysia

Besides the historical factors that resulted in the prominence of oil palm and rubber, the
climatic conditions of Malaysia are also suited for the growth of perennial or permanent tree
crops. Malaysias climate is categorized as equatorial, being hot and humid throughout the
year without any dry seasons.
Industrial Crops
PALM OIL
Oil palm occupies the largest area of crops grown in Malaysia and palm oil production is
vital for the economy of Malaysia, which is the world's second- largest producer of the
commodity. Malaysia currently accounts for 39% of world palm oil production and 44% of
world exports. If taken into account of other oils and fat produced in the country, Malaysia
accounts for 12% and 27% of the worlds total production and exports of oils and fats. Being
one of the biggest producers and exporters of palm oil products, Malaysia has an important
role to play in fulfilling the growing of global needs for oils and fats sustainably.
RUBBER
Rubber was the first major plantation crop introduced into Malaysia in 1877 when seedlings
were brought in from the Amazon Basin of Brazil. Rubber was the dominant plantation crop
for eight decades up to 1989 until oil palm overtook. Some of the factors causing a switch

from rubber to oil palm were the declining price of rubber brought about by competition from
synthetic rubber and the increasing cost and declining availability of labour.
COCONUT
Coconut is ranked the fourth most important crop in Malaysia after oil palm, rubber and
rice. Coconut is also one of the oldest agro-based industries. The decrease in the coconut
industry was caused by the rise of oil palm which is used as cooking oil. Despite the
decreasing acreage, coconut still plays an important role in the socio-economic position of the
Malaysian rural population that involves 90000 households. The domestic demand of coconut
products are for example fresh coconut, tender coconut, coconut oil and processed cream
powders. Due to the limited size of most smallholdings, the small number of trees, the limited
returns provided, most families cannot survive on the income from the coconut crop.
Virgin coconut oil is a new valued product that is in a very high demand worldwide.
Virgin Coconut Oil is processed using fresh coconut meat. This oil has a very high level of
antioxidants and is used in skin and hair care as well as for general good health because of its
antimicrobial properties.
COCOA
Malaysia is currently the fifth largest cocoa processor in the world and coca has been
commercially planted in Malaysia since the 1950s. However, over the years. The planting
sector has been slowing down. The continuous reduction has resulted in the lack of locally
produced cocoa beans to meet the increasing demand for local grinding. This has resulted to
the importation of coca beans leading to foreign exchange.
OTHER INDUSTRIAL CROPS IN MALAYSIA
Coffee or known as Qahwa is first prepared in Eastern Africa (known as Ethiopia today)
by a goat herder. Coffee was imported to Turkey through the Arabian Peninsula (Yemen) and
arrived in the European continent by following Venetian trade merchants. In no time, coffee
became an infamous beverage. Even the pope himself declared it a truly Christian beverage
despite that many people though that he should ban the drink. In Malaysia, coffee under
family Rubiaceae was planted since 1977, mostly at the West Peninsula Malaysia and East
Malaysia. The plantation of coffee was grown by smallholders either monocrops or as
intercrop with coconut. The Liberica types are popular in Johor and Selangor while the

Robusta types are infamous in Northern Peninsular Malaysia and Sabah and Sarawak. The
reduction of coffee planting due lack of farmers interests and also affected by low income in
coffee industries compare to the palm oil industries.
Sugarcane is planted for processing into sugar. The early cultivation of sugarcane was
surprisingly small. The production of sugarcane is mainly in the Northwest Peninsular
Malaysia in states of Perlis and Kedah as those area has a distinct dry season. However, in
1980, the production of sugarcane increases from 40 tonnes per hectare to 68 tonnes per
hectare in 1996. This is because of increase in domestic consumption such as growth in food
processing industries that have more demand for sugar. Although the production of sugar
from local plantation seems high in number, it only reach about 10% of domestic
consumption demand which is literally not enough to provide all needs in our country, the
Malaysian Government are issued licenses to import raw sugar. The raw sugar is imported
from Australia, Thailand and Fiji.
Tea was first discovered in 2700 BC, by Chinese Emperor as he was resting on a one fine
day. Early 20th century, the cultivation of tea became important. India, Sri Lanka and China
are the countries in lead of the tea production while Malaysia is now trying to stake its claim
on the global tea production stage. In 2011, the Food and Agriculture Organization of the
United Nation ranked Malaysia as the 18th largest producer of tea in Asia. The main type of
tea produced in Peninsula Malaysia is black tea and the main area of tea production is at
Cameron Highland because of it favourable geological area abundant rainfall, long hours of
sunshine and well drained acidic soils.
PRODUCTION OF RICE
Rice is a crucial part of everyday Malaysian diet and is considered a strategic crop. The total
area of land provided to grown rice is 450,000 ha, making padi the third largest agricultural
crop after palm oil and rubber. About 300,500 ha of rice are planted in Peninsular Malaysia
while 190,000 ha in Sabah and Sarawak. Currently, rice growing field are concentrated in
eight favourable granary areas in Peninsular Malaysia where various inputs such as irrigation,
drainage and rice mills are provided. The eight granary areas are:

Kuala Muda in Kedah/Perlis

Kemubu in Kelantan

Seberang Perai in Penang

Kerian/Sg. Manik in Perak

South West of Selangor

Kemasin Semarak in Kelantan

Besut in Terengganu

Seberang Perak

These eight granary areas contributed about 70% of the national rice production. In 1998,
Malaysia produced 1.94 million metric tons of rice, and even with this huge amount,
Malaysia still only produces 80% of what it needs to support itself and have to import the
rest. The average of Malaysian citizen consumes around 82.3 kilograms of rice per year. The
increasing population is calling for more research and technological advancement to increase
the production of rice for consumption within the nation.
FRUITS

Fruit growing in this country has traditionally been undertaken as a secondary activity by
smallholder to supplement their household income. The development of commercial orchards
and a large scale fruit plantation has not taken off to any significant degree because of several
major constraints. As a result, the growth of the fruit industry has been sporadic and
unorganized. The lack of clear and proper development policy for fruit production has also
contributed to its sluggish growth.
It was over the last decade or so that commercial fruit production has become increasingly
important. Fruit crops occupy the largest cultivated area of food crop in the country with over

375,000 ha. of land area planted with various tropical fruits. The fruit industry is a small
holder based industry involving 270,000 farmers. In 1995, the area under fruits was 257,600
hectares out of which 86,210 hectares were planted on a commercial basis. For the 1985-1995
period, the production of fresh fruits increased at the rate of 4.8 percent per annum from
638,100 tonnes to 1,019,900 tonnes. Export values of fresh and processed fruits increased
from RM182.4 million in 1985 to RM335.6 million in 1995, while import values of fresh and
processed fruits also increased from RM257.2 million in 1985 to RM444.3 million in 1995.
Overall, Malaysia is still a net importer of fruits and fruit products.
The Malaysian Government focused on eight types of fruits for the export, specifically
papaya, pineapple, melon, starfruit, orange, jackfruit and guava. In order to ensure the
acceptability of Malaysian fruits, the government has introduced regulations, good agriculture
practices, farm accreditation schemes and Malaysia Best labelling so to ensure a full
compliance of export fruits with the international trade regulations and standard.
The demand is expected to continue rise due to factor like increasing population, per capita
consumption, income and changing lifestyles, and health concern in the domestic and
international, markets. The per capita fruit consumption is expected to increase from 49.9 kg
in 1995 to 65.1 kg in 2010, representing an annual increase of 1.8 %.The area under orchards
is expected to increase from 257,000 ha. in 1995 to 373,200 ha. in 2010.
Fruit

Hectarage

Value (000 RM)

Durian

104655

1392077

Bananas

29790

476255

Rambutan

25460

171685

Dokong

16130

97260

Duku Langsat

12715

45420

Watermelon

11750

309465

Cempedak

11158

130251

Mango

9760

83545

Langsat

6925

69282

Duku

5775

65047

Jackfruit

3962

63155

Limau Manis

3915

49969

Papaya

3403

68419

Dragon Fruit

2510

39160

Guava

1525

50598

Starfruit

1276

31618

Salak

1190

15824

Sapodilla

1115

18149

PINEAPPLE

The pineapple industry is the oldest agricultural export crop. Due to economic reasons,
pineapple farmers have changed to other crops particularly, oil palm, which brings more
income and is less labour intensive. Pineapple cultivation can be divided into two production
systems, namely the smallholding and the estate sectors. Pineapple estates accounted for an
average of 62% of total pineapple area in Malaysia. In 1980, an area of about 7000ha. was
planted with pineapple under the estate system. This was reduced to 4.8 thousand ha. in 1989

but has now remained stable at 5000 ha. Smallholders pineapple area is declining and stands
at about 3000 ha.
VEGETABLES

With an average farm size of only one hectare, the vegetable industry can best be described
as small as fragmented. The potential to obtain a satisfactory farm income on such limited
resource is severely constrained. There were more than 13327 farms which specialized in the
production of vegetables in 2004. Vegetable production area is concentrated in the states of
Johor, Perak, Kelantan and Pahang where the four states account for 75% of total vegetable
production in Peninsular Malaysia. Johor is the largest supplier of the tropical vegetables
while Cameron Highlands has traditionally been the growing areas for temperate vegetables
such as cabbages, lettuce and tomatoes.
Total annual production for all types of vegetables is only 330000 tonnes while the
requirement is estimated at about 400 000 tonnes. Besides domestic consumption, Malaysia
exports vegetables worth RM 160 million in 1995 which include cucumber, spinach, long
beans, chilli, Chinese mustard (sawi) and kailan with the main export market being
Singapore. However, Malaysia imports about RM242 million worth of vegetables annually
and the main vegetables imported are onion, shallot, garlic, potato, chilli, cabbage and
processed vegetables. The industry faces several constraints, including lack of good varieties,
problems of pest and diseases, and problems of seed supply. The annual per capita
consumption is expected to increase at a rate of 1.8 % per annum to reach 63.6 kg in 2010. To
meet this demand, the area under vegetables production is expected to increase from 42,240
ha. in 1995 to 86,200ha. in 2010 resulting in a projected output of 1.6 million tonnes of
vegetables in 2010.

PARTICULAR

VEGETABLES

FRUIT

-Local

642796

1873092

-Import

265808

47973

-Total Supply

908604

1921065

-Local

1007979

1524770

-Export

76094

209583

-Total Demand

1084073

1734353

Shortage/Surplus (SS-DD)

-175469

186712

Supply (SS) (tonnes)

Demand (DD) (tonnes)

No of farmers for selected 31911

107827

commodity
Total no. of farmers

40920

162463

AQUACULTURE
In the modern technology world, aquaculture which is also known as aquafarming, stands
for farming of aquatic organisms such as fish, crustaceans, molluscs and aquatic plants.
Generally, aquaculture includes the cultivating freshwater and saltwater populations under
controlled conditions, and transform to commercial fishing which is generating an income for
those contributor.
In term of medicine field, protein is a basic component of every cell in our body. For
example, hair and nails produced are mostly made of protein. Protein is an important element
to build and repair the body tissues and use within many biological processes. For instance,
protein is used to make enzymes, antibodies to help us fight infection. Fish and other aquatic
organisms are definitely the best model for healthy sources of protein. There are a lot of
health benefits from frequently eating fish. One of the essential nutrients which are Omega-3
fatty acids can typically found in most fish and these fatty acids will help in reducing many

forms of cancer and promote healthy brain tissue. Eating fish regularly also can minimize the
risk of heart disease through reducing the probability of clot formation, lowering blood
pressure and increasing the good cholesterol levels in the blood stream. However, as the
demand is increase due to the growing of human population, the commercial fishing will
eventually result in overfishing and the loss of species entirely. Therefore, the aquaculture is
introduced to reduce the over dependence on the commercial fishing to ensure a consistent
supply of aquatic species.
Aquaculture mainly can be divided into four categories for the subsets of aquaculture. First
category is fish farming, in which including the raising of fresh water fisher, brackish water
fishes, lobsters and prawn. Fresh water fish have the river carp, catfish and so on, while the
brackish water fishes included sea bass, tiger prawn and crabs. Second category is the
algaculture, which mainly focus on production of algae and seaweed. Next category of
aquaculture is growing of cultured pearls, people can actually sell the cultured pearls on the
market today .One of the first factors that influences the growth of a cultured pearl is how
quickly the mollusc recovers from the implantation procedure itself. Before the growth stage
of a pearl, the operated mollusc will need care and attention from the pearl farmer. The last
category of aquaculture is mariculture, it is defined as aquaculture in ocean which includes
raising of mollusk.

Item
Number of
fishermen
and
aquaculture
lists
Marine fish
000 tonnes
Aquaculture
000 tonnes
Marine fish
value (RM
million)
Aquaculture
value (RM
million)
Seaweeds
tonnes*
Seaweeds
value (RM

2003
110,54 7

2004
110,960

2005
111,344

2006
118,047

2007
120,905

2008
126,950

2009
149,618

1,283.2 6

1,331.65 1,209.60

1,379.77

1,381.27

1,450.44

1,393.22

196.87

202.22

212.03

268.51

281.94

472.31

4013,6 1

4,241.45 4,017.52

4,939.32

5,053.51

5,308.91

6,322.57

1,172.3 1

1158.46

1,196.01

1,291.75

1,341.33

1,408.39

2,321.97

30,956.9 31,426.2
0
0
15.71

43,200.0
0
6.91

90,298.5
0
18.05

111,298.2 138,855.9
0
0
22.26
27.77

207.22

million)*
Seaweeds
acreage
(ha)*
Number of 110,54 7
fishermen
and
aquaculture
lists

5,949.37

6.684.19

7,730.57

7,538.46

110,960

111,344

118,047

120,905

126,950

149,618

Figure 1. Production of marine fish, aquaculture and seaweeds from year 2003 till 2009
From the survey table, the growing numbers of fisherman and aquaculture production are
the desired results from advanced aquaculture technology. If compared to five years ago,
there is a tremendous change for the positive impact of aquaculture field.
There are several contribution factors to the steady growth of aquaculture production.
Firstly, depletion of fish supplies from marine captured fishing lead to insufficient supply in
the market. This is mainly due to the overexploitation of fisheries and physical destruction of
marine coastal habitats. Besides that, overfishing of smaller fish can become a threat to
marine biodiversity and affect the whole system simultaneously. The second factor is the
ocean pollution which affects the living environment for those marine species and endangers
the marine life. As we all know, pollution is the introduction of harmful contaminants into the
ocean such as pesticides, herbicides, chemical fertilizers, detergents, oil that can negatively
impact nature's water cycle. These contaminants might consumed by small marine organisms
and affect the global food chain. Other than that, ocean pollution might lead to reductions in
oxygen levels and the decay of plant life. Next, it can provide more job opportunities and
steady income to the local communities. Since it is cultivate under a controlled conditions,
the fisherman can monitor the growth of aquaculture closely if compared to those coastal
fisherman. Thus, they can gain a steady income without the fear of ocean pollution that
happened at most of the places.
New Sources of Growth for Malaysian Agriculture
The agricultural sector has contributed to the growth and major contributors to national
income and export earnings. Its 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. There
are a few new sources of growth for Malaysian agriculture namely are herbs and spices,
pharmaceutical and also natural products.
A new sub-sector in Malaysian agriculture that is currently experiencing rapid growth is the
herbal industry. The government has targeted the herbal industry to be another growth sector
after information and communication technology. The shift in health care awareness towards
natural products with therapeutic value provides vast opportunities to Malaysia to become a
significant global player. A plantation area for these three new sector has been planted in
Dungun, Terengganu and Lipis, Pahang as the initial herbal plantation projects. Herbs and
spices are used in cooking and some even used as traditional medicine.
Some of the common species of herbs that are grown in Malaysia are tongkat ali, hempedu
bumi, kacip fatimah, misai kucing, dukung anak, pegaga and also mas cotek. Tongkat ali is
used for antimalarial, antidiabetic, aphrodisiac, antimicrobial and antipyretic. As for hempedu
bumi the uses are for treatment of gastro-intestinal tract and upper respiratory infections. It
can also be used for herpes, fever, sore throat and other chronic and infectious diseases.
Kacip Fatimah is famous among the ladies. This is because it is used to facilitate birth and
post-partum medication. It can also be used for treatment for dysentery, rheumatism and
gonorrhoea. Misai kucing is used as analgesic, diuretic, antiemetic and astringent. Misai
kucing can also be used to treat conditions like bronchitis, small pox and diarrhoea. Dukung
anak is famous for its use to treat kidney stone, malaria, asthma and liver related diseases. It
is also used as diuretic and to increase appetite. In Malaysia, it is used to treat diarrhoea,
diabetes, hypertension and jaundice. Meanwhile, the pegaga herbs is used to heal wounds,
improve mental clarity, and treat skin. It can also boost mental activity and treat high blood
pressure, rheumatism, fever and nervous disorders. Lastly, the mas cotek are used to help
womb contraction and as aphrodisiac for men and women. Mas cotek also can reduce
cholesterol and blood sugar level.
Marketing Agriculture
Agricultural marketing covers the services involved in moving an agricultural product from
the farm to the consumer. Numerous interconnected activities are involved in doing this, such
as planning production, growing and harvesting, grading, packing, transport, storage, agro-

and food processing, distribution, advertising and sale. Some definitions would even include
the acts of buying supplies, renting equipment, (and) paying labour", arguing that marketing
is everything a business does. Such activities cannot take place without the exchange of
information and are often heavily dependent on the availability of suitable finance.
In export crops sector, there are three main types of oil palm producers: independent
smallholders, producers in land development schemes, and private estates. In the land
development schemes such as Federal Land Development Activity (FELDA), the agency is
also involved in the marketing of produce. Similarly, other land development agencies such
as Federal Land Consolidation and Rehabilitation Authority (FELCRA) and Rubber Industry
Smallholders' Development Authority (RISDA) are also involved in marketing of the produce
of the settlers. In the production sector, each group of producers exhibit different production
and marketing characteristics.
The independent smallholders are characterized by low productivity and dependence on
private middlemen for the sale of their produce. Marketing of smallholders produce in the
land development schemes is done through the marketing unit or mills owned by the parent
institution. FELDA buys and sells fresh fruit bunches at the farm level, processes them into
processed palm oil, and sells this to either local or foreign manufacturers. The private estates
have a highly organized marketing system. A plantation firm not only has its production
farms, but also milling and processing plants. Raw materials are easily absorbed into their
mills and refineries, before the processed products are sold to domestic industrial users or
foreign manufacturers. A similar marketing framework also exists for rubber growers and
producers.
The Food Sector:
The food production of Malaysia is described by little ranch size with negligible association
of the private or corporate divisions. In the case of rice, normal homestead size for most
ranchers is 1.06 ha. Other than these there are likewise a couple rice bequests keep running
by FELCRA(around 4000 ha) in Seberang Perak silo territory.
Rice is of vital significance to the economy as it is the staple sustenance of most of the
populace. As being what is indicated there are a great deal of government intercessions to
guarantee "an adequate level of rice to the nation while guaranteeing high cost to the makers
and stable cost and superb rice to the customers". The instruments of mediation incorporate

inputs endowments, less expensive water watering system rates, value sponsorships,
government-possessed processing exercises, value control (from homestead to retail) and
restraining infrastructure of rice imports.
The ranchers ordinarily offer their produce to the neighborhood constructing agents or
wholesalers operators on a relegation premise. The agriculturists are paid after the produce
has been sold which may take more than a week. Produce are by and large not reviewed and
post-harvest taking care of is still the weakest connection in the framework. Costs are not
straightforward at the ranch level, truth be told they are found through the "whispering
framework" between the purchaser and the dealer. Makers are typically in a weaker haggling
position in respect to the purchasers or wholesalers who are furnished with business sector
data and systems administration. Under such a showcasing scene, there are insignificant
impetuses for the business to review what's more, institutionalize or even to enhance to make
quality included. Items are sold in mass and undifferentiated and business costs don't mirror
the quality and particulars.

The New Supply Chain for Agri-food:

The conventional agri-food marketing system as discussed previously is undergoing a
transformation toward the new supply chain pushed by external and domestic drivers.
The external driver is the rapid development of large retail chains from developed economies
which made possible by globalization and free flow of capital across borders. These large
retail chains integrate the wholesale functions into their own company to become selfdistributing chains. Operating on a large scale these retail chains were able to introduce costsaving innovations such as centralization of procurement, use of preferred supplier registries,
formal contract with suppliers and promulgation of private quality standards.
The domestic drivers are consumers income and changing consumption pattern and
lifestyles. Malaysia is classified as an upper-middle income country, and considered as one of
the most developed of the developing countries. A little less than two-thirds of Malaysias
population live in the urban areas. The industrial-urban expansion has created new consumers
who have relatively more purchasing power and health consciousness, who began to dictate
their strong influences on the agro-food system. These consumers demand high quality
produce which are based on international standards. In 2005, there were 81 hypermarkets in

Malaysia where 83% of them are foreign-owned. Among them are Giant (Hong Kong), Jusco
(Aeon Group, Japan), Carrefour (France) and Tesco (UK). Local retail chains include
Parkson, Ocean, The Store and Mydin.
Federal Agricultural Marketing Authority (FAMA):
The Federal Agricultural Marketing Authority (FAMA) is an agency under the Ministry of
Agriculture and Agro-based Industry. Set up as a statutory body in 1965, FAMA is
responsible in the supervision, coordination, regulation and improvement of the marketing of
agricultural products, which include fruits and vegetables, for domestic, export and import
markets.
As the Governments marketing arm for agricultural products, FAMA organizes marketing
activities, set targets and product standards, monitor performance, develop marketing
strategies and tools as well as initiate innovative programs to promote Malaysian agricultural
products.