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III. MECHANISMS FOR INTEGRATING ENVIRONMENTAL CONSIDERATIONS INTO AGRICULTURAL POLICY
[ III | III-A | III-B | III-C | III-D | III-E | II-F ]
A. National agricultural policy
[ A | A-1 | A-2 | A-3 | A-4 | A-5 | A-6 | A-7 ]
3. Performance of NAP
The review of NAP did not imply its failure. On the contrary, NAP has had its measure of successes. Between 1984 and 1990, 342,000 hectares of land were developed by various government agencies. In addition, 820,000 hectares of new land were opened to agriculture. Increased investments were made in the various subsectors of agriculture, resulting in productivity increases. Labour productivity increased 3.55 per cent (1981-1985) and 3.68 per cent (1986-1990), mainly as a result of the increases in productivity among organized smallholders and the development efforts. There was, for example, more double cropping and livestock rearing under plantation crops. But despite those successes, agriculture continued to loose ground vis-à-vis the rest of the economy. Notwithstanding its increasing productivity, the agricultural sector fared less favourably when compared with manufacturing, and it was projected to do even worse in future. There have also been marked changes in the structure of exports which have become more diversified and of a higher value content. As agricultural prices stagnated, their share of exports fell.
It was the increasing disparity between agriculture and the other sectors of the economy rather than a lack of success per se that prompted the review of NAP. Agricultural income varied considerably, depending on crop types and land conditions; but in general that income has not been very far above the poverty line, and often on the wrong side of it. Even when rural incomes have been above the poverty line, as in most IADPs, that was often as a result of off-farm income. Indeed, in IADPs, off-farm income constituted more than 50 per cent of the total income.
Therefore, one of the weaknesses of NAP was its emphasis on earnings from agriculture. Instead, it may be more important to emphasize total household income, whatever the source. It was found that the development efforts did not raise farm income so much as facilitate crop and activity diversification. Productivity increased from the planting of higher value crops and the undertaking of other income-generating activities. But the basic agricultural problems of uneconomical sized holdings, for example, remained.
One suggestion made by NAP was to sell produce with more value-added, with the objective of increasing employment productivity; in other words, to expand agro-based industries. That proposal met with some success, as employment in agro-based industries increased from 84,180 persons in 1979 to 103,394 in 1989, and value-added per worker increased from M$ 28,450 to M$ 34,890. Nevertheless, agricultural produce processing did not increase as much as had been hoped. In the context of the expanding economy, that represented a decline in agricultural manufacturing value-added from 35.6 to 25.6 per cent.
In short, despite the success of NAP, Malaysian agriculture was overtaken by events outside its control, and a review of NAP was necessary.
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