III. MECHANISMS FOR INTEGRATING ENVIRONMENTAL CONSIDERATIONS INTO AGRICULTURAL POLICY

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A. National agricultural policy

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7. Downstream development

At present, agricultural exports are concentrating on commodities. The export base can be broadened if downstream processing of raw produce can be undertaken. That would not only enable exports to enjoy a higher value but also create employment opportunities and accelerate rural industrialization. Downstream processing could be undertaken in four main sectors: rubber-based, palm oil-based, food-based and wood-based industries.

Emphasis should be placed on four subsectors: latex-based products, tyres and tubes, footwear and other rubber-based products. Local utilization of rubber has been projected to rise from the current 181,400 tons (14 per cent of the present production total of 1.3 million tons) to 400,000 tons by 2010 (20 per cent of the expected production of 2 million tons).

The palm oil-based downstream industry is still in its infancy but it is expected to grow rapidly. A number of products can be produced including oleochemicals, vitamin E and cocoa butter substitutes. Since most of the palm oil produced by Malaysia is expected to be exported as refined palm oil for industrial and food uses, downstream processing of palm oil will be based on imported palm oil.

A wide range of possibilities exist in the food-based product sector. Fruit can be canned, pickled and turned into juices. Vegetables can be pureed, and tapioca can be processed into starch and other high-value products like sweeteners, fructose, dextrose, maltose and high fructose glucose syrup.

Local grinding of cocoa is expected to increase from 69,200 tons (26.4 per cent of current production) to 100,000 tons in 2010 (20 per cent of the projected total production). It can be processed into cocoa paste, cocoa powder, cocoa butter and chocolate products.

Coconuts can be turned into desiccated coconut, coconut cakes and candies, for example. Malaysian production of desiccated coconut, which accounts for only 16 per cent of world demand, can be expanded further.

Meat can be canned and made into sausages, thus providing a useful import substitution source as imports of sausages amounted to M$ 6 million per year from 1988 to 1990.

Animal feed can be made from agro-industrial wastes. As deep-sea fishing expands, processed products like canned tuna, sardines, crustaceans and molluscs would increasingly become more important.

Reduced logging rates and the ban on the exports of saw logs should ensure a steady supply of raw materials for the local wood-based industry. The ban on exports of rattan should also be continued. The manufacturing of furniture, wood mouldings, joints and panels should be emphasized in order to cater to expanding domestic and world demand for such products.

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