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 ]

5. Strategies of NAP, 1992-2010

NAP set out the strategies which were to be used to achieve its objectives. Those strategies are described below.

This strategy stresses efficient use of land, labour and capital resources. The programme for development of idle land was to be improved. Such land was to be turned into mini-estates, and farmers and farmers' institutions were to be provided with financing and other credit resources for operating run such schemes. Idle land was also to be used as a base for rural industrialization.

An avenue was to be set up to bring together land owners and potential users of land, with the aim of helping to develop a formal market for idle land and minimize the high transaction costs involved.

Smallholder productivity was also to be increased through replanting with new agricultural material, improved management and agronomic practices, increasing farm sizes, mechanization and other measures.

A formal labour market was to be created to smooth out the areas of need and availability of labour.

Agriculture was to be integrated with the manufacturing sector so that downstream processing of raw produce could be undertaken to produce higher value added products.

A synergistic relationship between the agricultural and the manufacturing sectors was also to be developed. Raw materials were to be supplied to the manufacturers who, in turn, would supply agricultural inputs such as farm machinery and agrochemicals.

Research and development efforts were considered necessary to maintaining the competitiveness of the agricultural and manufacturing sectors. Such efforts were to be market driven, commercially oriented and environmentally friendly.

The transformation of agriculture into a competitive and efficient sector required investment by the private sector. Incentives and other promotional packages were seen as necessary not only to check the outflow of resources from agriculture but also to attract investment.

As the increased output of agricultural production would require markets, a more aggressive marketing strategy was to be adopted. Traditionally, producers of agricultural produce have been price takers; however, they now have to act like commodity traders. New demands and uses were needed, and product innovation and differentiation were to be introduced. Credit facilities were to be provided to some buyers.

Malaysia is a net importer of most of its major food commodities and the self-sufficiency rates have generally declined in recent years. Consequently, the expansion of food production was necessary in order to provide import substitution and meet domestic demand, while also taking advantage of export opportunities. Self-sufficiency targets were proposed for selected food items. However, realizing that the country might lack a comparative advantage in the production of food, only some increased local production was envisaged, not total self-sufficiency.

New technological processes and methods, high-tech equipment and new demands were to be introduced. To ensure the success of this strategy, a pool of adequately trained and skilled manpower was required in the agricultural sector. Thus a comprehensive plan was formulated to establish manpower training for efficient agribusiness, resource management and agro-based processing.

A large number of farmers’/fishermen’s associations exist. However, they have small capital bases and limited managerial/technical capabilities which constrain their role in the development and modernization of the agricultural sector. NAP proposed the establishment of a formal financial institution, the formulation of a specific human resource development programme and the formation of a federation of farmers’ and fishermen’s institutions.

(i)Restructuring, including greater bumiputra participation

The expanding opportunities for private enterprise demanded greater self-reliance, entrepreneurship and management capabilities. Businesses were to be run strictly on commercial lines driven by market forces. With limited capital and management capabilities, there was a need to establish priorities for the activities and forms of bumiputra participation. Bumiputra involvement was to be emphasized mainly through equity and employment requirements. An investment trust was proposed that would invest in, and initiate, projects and take up bumiputra quota shares in existing and new companies.

Top