1. The Scope of the Paper
2. Executive Summary
3. The Second Vision
1. Some key questions
2. Key challenges
3. Paradigm shift needed
4. Position for the future
4. How Malaysia can Execute this Vision
1. Champions of development
2. Phases for reorganization development
1. Phase 1: 

Reorganizing and Consolidation of Farming Units and professionalize farmer’s organization
2. Phase 2:

Joint Government and Private Sector Councils
3. Phase 3:

Rationalization of regulatory agencies
5. Key Issues / Challenges and Recommendations
1. Land & tenure
2. Supporting infrastructure
3. Information and coordination
4. Marketing and distribution
5. Banking and financial support
6. Food processing industry imperative
7. Research and development strategy
8. Education, training and upgrade of farmers knowledge
9. Human resources
10. Certification, standardization and quality assurance of agriculture produce
11. Promotion of consumption of local produce and export promotion
12. Bio-security, disease and pest control and surveillance
13. Sustainable farming methods
14. Other support and services

A P P E N D I X

A:  Issues of Aquaculture in Malaysia
B:  ACCCIM Survey on current status of agriculture in Malaysia
C:  Land issues facing the Vegetable Growing Industry
D:  Large Scale Rice Farming in Malaysia: Issues, Challenges and Way Forward
E:  Creation of Green Agriculture Zone in Malaysia
F:  Sunflower Project for the Rebuilding of the Pig Farming Industry

1. Scope of Paper

The scope of this paper is limited to macro-issues affecting the industry. The members of the Chamber are more familiar with the make up of the Chinese farming sector, therefore greater in-depth analysis were made for the following food sectors, farmed primarily by Chinese household”

• Fruit,
• Flowers,
• Vegetables,
• Pigs
• Poultry
• Aquaculture
• Rice farming

2. Executive Summary

Agriculture for food production in Malaysia has long been neglected, while other commercial agriculture developed.  This is the reason for the present backwardness in organization, technology and management of the food sector. The need for social reengineering has also distorted the efficiency of the market system resulted in a less comprehensive policy framework to allow the sector to grow. Going forward, the following key paradigms must be made:

1. It is food production, not agriculture. The strategy must be based on a total system integrated value chain approach. The consideration is from plate to farm, producing food, not agriculture commodities.
2. Investment and development must be balanced between market orientation and social re-engineering.
3. The role of the government be confined putting in place a policy framework and institutions conducive for the flourishing of the efficient players with support and conveniences in infrastructure, training, development, extension and consultancy services, fiscal incentive and financing, public awareness and education, regulatory supervision and enforcement. The Government-industry partnership works towards getting the industry to self-organize and self-regulate and efficient to be achieved through the market.

1. Land not available to farmers who wish to farm. Uncertain land tenure; 
2. Lack of supporting infrastructure, including competitive freight rates to move produce around;
3. Inefficient distribution and marketing system, often resulting in great price fluctuations;
4. Lack of a proper system of gathering and disseminating market information;
5. Shortage of skilled and unskilled labor, younger generation does not want farming as a career. How to nurture a generation of career professional farmers?
6. Competition from imports. Local produce is often quality and price uncompetitive;
7. Unsafe farm produce, loose enforcement and ignorance of farmers resulting in excessive and wrong use of chemical input in farming;
8. Environmental pollution and damages resulting from unplanned opening up of land for farming;
9. Adoption of farming methods that is environmentally friendly and high yielding, and not to repeat the mistakes of the developed countries. 
10. Inadequate use of knowledge and research developed by various institutes in the country; integration and channeling these intellectual asset to commercial use. 

1. Land and Tenure;
2. Supporting Infrastructure;
3. Information and Coordination;
4. Marketing and Distribution;
5. Banking and Financing Support;
6. Food Processing Industry;
7. Research and Development Strategy;
8. Education, Training and Upgrading of Farming Knowledge;
9. Human Resources;
10. Certification and Standardization of Agriculture Produce;
11. Promotion of Consumption of Local Products and Export Market Development;
12. Biodiversity, Disease, Pest Control and Surveillance;
13. Sustainable Farming Methods;
14. Other Support.

• A market friendly, professional and enlightened administration with policies directed towards incorporating best global practices compatible with local conditions and developing local expertise. 
• A committed private sector dedicated to developing globally competitive clean and green produce, from farm to table.

In response to Prime Minister’s Dato’ Seri Dr. Mahathir Mohamad’s vision of making Malaysia a net agriculture produce exporting nation, this initiative critically and constructively examines the many issues that are fundamental to the success of the vision. 

Malaysian businesses are excited at the enormous opportunities to this renewed enthusiasm and await the right policy framework to allow optimal exploitation of Malaysia’s rich ecological endowments for food production. Malaysia is in a good position to leverage on the lessons provided by other agriculture nations, and benefit from the knowledge and best practices of other nations.

3.1. Some Key Questions
To develop a FOCUSED strategy for Malaysia’s agro-based and food production industries, we examine the present state of the Malaysian economy and sweeping global trends. 

First the following questions are pertinent and must be answered:

1. Which “food” sectors or crop / livestock product should we focus on to: 
• Reducing the import bill. Whether we have the competitive conditions to produce them efficiently vis-à-vis imports.
• Among the cluster of imported food, which ‘highest value” crop sectors (vegetable, fruits, feed, meat, etc) should be prioritized for development? Would import substitution also made for global competitiveness of these products, inclusive of consideration for social costs?
2. If agriculture is to cease as a subsistence or social reengineering tool, i.e. they must be commercially sustainable and profitable, what organization changes will be needed to reform smallholdings, and how?
3. How can the present fragmented farm sector be reorganized into bigger economically profitable set-ups, while retaining the skills and knowledge relevant to local conditions?  What is the role of the government agencies, farmers’ organizations and professional bodies? How to systematically build consensus among farmers, get their cooperation?
4. What kind of farming system and production methods; for example, should we continue expanding conventional chemical based to natural and sustainable methods that are compatible with our natural environment? How do we ensure maximum or optimal productivity with minimum damage to the Eco-system and the society?
5. What is the state of the upstream food processing industry? How could an upstream food processing industry be developed in parallel, to drive the expansion and modernization of agriculture? How should foreign investment and linkages be built in this area?
6. If we accept that it is time to review the existing government machinery and institutional framework in order to fulfill the objectives of the new food production strategy; should a comprehensive rationalization program be carried out to assess the relevance of various ministries and agencies? How should resources be realigned and each of these institutions rethink their focus? What about coordination among the agencies and integration with industry?

• Should departments be reorganized along functional lines instead of crop divisions?
• What about a co-coordinating council between the various ministries covering trade and industry (opening, development and expansion of markets), health and safety (food safety and quality assurance), environment and bio-security concerns (pollution, resource use and Eco-balance), manpower (migrant labor and technical expertise) and land use (optimization for efficiency and certainty of land tenure)?

1. The state of the present Malaysian economic structure presents a key challenge:

Two decades of rapid industrialization and commercial crops have overlooked the development of the local food production sector, resulting in a set of higher cost/factor conditions that are not conducive for the development of the food sector using the conventional approach. The competition for competitive factors of production present daunting challenges:
• Cheap land: use of land for alternative higher yielding economic activities.
• Cheap labor: shortage of local labor and those willing to work in the farms at lower wages. 
• Shortage of a generation of technically competent and educated farmers.
• Shortage of technical and skilled personnel’s in the food production sector.
• Dietary habits entrenched with imported products.
• Reorganizing a highly fragmented farming sector.
2. To overcome challenges of factors of production uncompetitive to food production, Malaysia has to carefully plan transitional phases. The government and nation must accept that to make the transition, agriculture will have to continue with its present labor intensity until a new generation of farmers emerge and a critical mass of coporate players willing to invest in developing larger scale farms are formed. During this interim, pragmatic policy direction especially as liberal foreign labor policy is essential.
3. Impact of Global Trends: The world’s great agriculture nations face many problems from market slumps to environmental degradation resulting from intensive conventional farming. While Malaysia’s natural and ecological conditions are excellent for agriculture production; our country needs to find a niche for its agriculture in an increasingly open and competitive global market.

Attention must be paid to how the prospect of the industry will be affected by:
• trade liberalization and opening up of final and producer markets
• environmental considerations
• consumer tastes and behavior
• institutional pressures and regulatory environments
• market structures and competition for factors of production
• advances in technology
• competition and production efficiency

1. From commodities to final food production, reverse thinking to begin from the table to the farms. In other words, demand driven. A successful agriculture sector is driven by an integrated final food production sector and hence it must be developed in parallel.
2. A new look at food security; should countries produce sufficient food for their own population vis-à-vis their ecological and socio-economic conditions? Should concern for food security a consideration in determining the allocation of scarce economic resources? The Chinese government has recently announced its intent to open its food market and declared that food security need not be achieved through own production. China’s recent attitude change in food security makes interesting food for thought for Malaysia.
3. Farmers have to get organized and teamwork vital to speedily achieve economies of scale, technology diffusion, supply management, production, and marketing and distribution economics.
4. The role of the Government, what change agents can be utilized to shift the leadership and thrust from government-led to that of the private sector? What is the strategy to develop an agro-based and food production industries in Malaysia? 

The modern agro and food production industry must encompass the following aims:

1. Green and Clean: Te industry takes care to maintain a balance between growth and sustainability; between profit and social cost. 
2. High Value Output: Produce high value output both for export and local consumption
3. Sustainable: Production methods must be sustainable and maintain balance of the ecology. 
4. An Integrated Value Chain Approach: Upstream and downstream activities of food production need to be fully integrated; inputs, farming, post harvest processing, marketing and customer service.

4. How Malaysia can Execute this Vision

4.1. Champions of Development

The Malaysian Agro-based industry has been dominated by commercial non-perishable crop production and the local food production sector is plagued with fragmentation and underdevelopment. 

To correct the situation, the following collaboration is recommended:

1. Government Support

The government leadership recognizes that leadership and drive are to come from the private sector. Policy framework must be progressive to result in minimal government intervention in the process to empower the private sector; farmers be encouraged and farmers organizations need to be strengthened towards self-regulation.
2. Private Sector Commitment

Private sector and the various industry organizations provide the leadership and are the driver and manager of the transition and development. Private sector mindset shift is needed; reversing the emphasis; from being production oriented to market-led. Farmers must accept and adjust to teamwork as quickly as possible.

The low level of cooperation and the underdeveloped professionalism of industry organizations is one of the key bottlenecks to development. Effort must be focused to improve on the above.

PHASE I:
Reorganizing and Consolidation of FARMING UNITS and Professionalize Farmers’ Organization

As survey results shown in Appendix B, existing farming units are uneconomical. Lack of certain land tenure is the root and source of a whole chain of challenges plaguing the sector.  A systematic consolidation of farm units is fundamental. The very cultural nature of the industry and the shallow management skills and absence of teamwork do not augurs well for cooperatives to flourish. It is more effective to take the corporate route, where smaller units are counseled and guided into forming joint venture companies to apply for land and jointly run their enterprise.

The professional capabilities of many existing farmers’ organizations are low. It is proposed that rationalizing and streamlining of these organizations in the country be carried out. Recommend that the government make a grant of RM1 million to each of the following national associations to help them beef up the management and professional capabilities of their organizations:

• Federation of the National Livestock Farmers Producers Association
• Federation of the Vegetable Growers Association, Fruit and Flower Growers Association.
• Any other Associations identified by the industry and the government.

Food Processing Industries
A sophisticated food processing industry is the basis of successful agriculture. Industry linkages must exist, therefore the right policy framework must be in place to encourage parallel growth of this sector. Representatives from Food Processing Industries Associations and Farmers’ Organizations set up dialogue councils to communicate development strategies, share knowledge and to iron out any inefficiencies in the production and marketing system.

Phase II: Joint Government and Private Sector Councils

Proposed an Agriculture Legislation be set up to authorize the formation of industry councils (along the model of PORLA) as mechanisms for the development (see appendix for one example on funding, governance, composition and role).

The following sectors are identified:

1. Malaysian Flower Council (MFC) 
2. Excellent Vegetable Bureau (EVB) 
3. Tropical Fruit Council (TFC) 
4. Tropical Aquaculture Board (TAB) 
5. National Pork Producers' Council (NPPC) 
6. Malaysia Poultry Producers Council (MPPC) 

The various ministries in charge of agriculture, primary commodities, environment, health and land are to be streamlined and reorganized to realize the vision of NAP3. 

Food Safety
A coordinating but independent council, reporting directly to the Cabinet, to be set up between various ministries, state governments and agencies concerned, modeled after the United States Food and Drug Authority to ensure proper enforcement of food safety and quality assurance standards. Existing institutions are inadequate to serve this purpose, past food safety issues have contributed to great erosion of public confidence The credibility of this council has enormous bearing on consumer confidence and export markets.

5. Key issues and Recommendations
The Joint Councils will work together to resolve the following issues hindering the full development of the various sectors:

5.1.  Land & Tenure 

1. Issues/ Challenges:
1. Majority farmers are farming on uneconomical holdings, majority of which do not have certain land tenure, including many farming on illegal plots and TOL leases. (More details in Survey Results in Appendix B).
2. Lack of certainty of land tenure has caused excessive exploitation of land, with no investment made to renew the condition of the soil, and no considerations for ecological care, such as the building of water retaining / recycling system to retain the farm chemicals for a sufficient period to allow the farm chemicals to disintegrate into less toxic or harmless forms before discharging into natural river courses. 
3. Farmers facing an uncertain future can have a very shifting and short term mentality leading to the excessive use of fertilizers and pesticides and other chemical input to maximum yield, little attention to upgrade skills, build infrastructure and automation
4. Since the uncertainty and short-term mentality are embedded with farmers, it is meaningless and pointless to have any regulations imposed on them. Also the enforcement of regulations is also wanting.
2. Recommendations:
1. National Agricultural Products Zoning Information to be disseminated widely among farmers. This should include designated zones for pig farming. 
2. As market and climatic conditions are changing, it is advised that zoning be done on a broader category rather than to nail down on specific crops. 
3. Government to develop supporting infrastructure in these designated zones to allow for focused and efficient development. 
4. Matching farmers needing land with idle land available through speeding up the setting up of the National Land Registry. The National Land Registry to iron out the discrepancy and paradox existing between Federal Policy and State Implementation shortcomings.
5. A mechanism to be developed to eliminate present problems associated with the application of bigger lots and the terms of leases, and the industry association is a key anchor to assist the government to achieve this.
6. A minimum economic lot size is determined for efficient farming through joint consultation with the industry. Existing small farmers are encouraged to apply in-groups through cooperation in a limited company committed to farming.  The following considerations to be considered to overcome abuse and manipulation:
1. The majority partner of the limited company must be an experienced and qualified farmer or farming family committed to farming. His credential is to be verified by an independent consultant company and confirmed by the local industry association. At any one time, a qualified farmer (owner/operator) who is committed to farming or a public corporation having substantial activities in the food production industry must hold majority holding of this company.
2. Uncertainty of TOL leases. Yearly renewable or short term renewable is not practical, as its uncertainty is an obstacle to investors making infrastructure development. 
3. For commercial viability, a 30-year period lease is the minimum period for reasonable investment return. For commercial rice framing without government supports such as input and out subsidies, infrastructure support etc., a lease period of minimum 60 years is required to commensurate with heavy capital investment in irrigated, mechanised infrastructure development, risky nature of food production as well as the banker’s acceptance of chargeability lease of land collateral for project financing. 
4. To ensure the land is used for its intended purpose, no sub-lease would be allowed. Land must also followed strictly the National Land Use Masterplan.
5. A financial arrangement to be developed to assure investor and farmer confidence that both would adhere to their terms and promise.
We urge the Federal and State government to make this a top priority item and work through the industry associations to secure cooperation at the grassroot level.  The government provides legal titles and formalizes land leases to farmers who have already developed and farmed on land outside main urban centers. During the course of this project research, we learnt that there 
have been cases where existing farmers on illegal land made application for land and received summons in return!  In good faith, we urge the authorities to ensure that such awkward situation not be allowed to happen again.

1. Issues/Challenges: 
1. Lack of proper supporting infrastructure such as feeder roads, irrigation systems, storage facilities hampers growth.

Lack of support program from the national carrier has hindered the development of exports of perishable produce.  Malaysian Fruit farmers could not get space aboard Malaysian Airlines because of their small volume and could not commit to block bookings. The freight system and rates are not conducive to the growth of exports. For example, we learnt that due to the existing cartel arrangement in road transportation, cost of haulage from Kuantan to Westport is more expensive than freight from Westport to Australia, further impeding growth. Such unhelpful situation must be improved upon soonest possible.
2. Recommendations:
1. Develop a privatized operation to build and operate a national chain of cold rooms with the latest post-harvest technology to prolong shelf life and processing plants along the national transportation system grid and near to clusters of production on a B.O.T basis. These support facilities are to be developed on a phase by phase basis to keep in step with the development of the production sector.  Government supports this venture just like the way the government looks at other infrastructure. It must be noted that such facility will also help to smoothen demand and supply conditions, thereby stabilizing prices.
2. State governments build feeder road networks, electricity and water sources facilities in line with the national agriculture produce zoning. Consultations are made with local farmers’ organizations and private investors.  It is proposed that a development blueprint be tabled for dialogue and discussion to solicit opinions and expertise from the private sector.
3. Once the State has built supporting infrastructure, State government will make it mandatory for farm owners to build drainage and ecological balance structures to prevent erosion of the physical landscape that could cause danger to the larger population.
4. Critically examine the transportation system and its rates and to clear bottlenecks. Freight costs provided by the present cartel system are uncompetitive and not conducive to growth. The successful agriculture export nations have generous support from their national carriers. For example in Holland, KLM provides concession rates to support the Dutch flower exporters. Concessionary rates for electricity are also available to green house cultivators in Holland.

1. Issues/Challenges:
1. Vegetable, Poultry and other produce often experience oversupply and price slumping because of un-coordinated and occasionally official encouragement to increase supply, causing untold problems to farmers and wasting national resources.
2. Timely information on the state of agriculture in Malaysia is sadly lacking. The National Statistics Department must provide timely and detail information on production, pricing and import conditions, in a easy to analyze format and in a language accessible to the operators. The Department’s current system of survey, collection, compilation, analysis and dissemination of information to the industry are due for review.
2. Recommendations: 
1. Effort be made to compile database on demand conditions; first with domestic conditions and later on work on export markets targeted.
2. Supply conditions: a database of production, number of farmers, size of production of various sectors. Compilation of supply conditions needs to be institutionalized and channel through the industry associations.
3. Import conditions: Detail breakdown of import, their sources and volume and prices is needed to reflect the true state of the industry.
4. Prices and its movement. A mechanism to be developed to broadcast this information to the sector.

1. Current challenges:
1. persistent problem of highly unstable volatile prices caused by mismatch of demand and supply.
2. multi layers of middlemen between farmers and retailers.
3. farmers lack professional skills to organize themselves into modern marketing cooperatives.
4. industry associations not able to provide the leadership and organization.
5. Improved domestic infrastructure, especially the North South Highway has dramatically altered supply conditions. For example, produce from the North can now reach the South in good time. There is urgency to improve the transportation and post handling infrastructures in farm produce area. 
6. Lack of post harvest facilities to prolong shelf life of farm produce.
2. Recommendations:
1. The joint council install an effective mechanism to collect information on:
• Number of farmers
• Land cultivated, type of crops and estimated production levels
• Projection of supply condition
• Allow these information to be available promptly to producers
2. A training and consulting programs be made available to help farmers organize into joint venture companies that will market and brand their own products.  A good practice exists in the vegetable sector where 11 farmers who independently farmed some 100 acres but collaboratively market their produce. Know-how in this area should be spread to existing small farmers to help them overcome marketing challenges.
3. The joint industry council can further help by mounting nation-wide food promotion campaigns.

1. Issues/Challenges:
1. Lack of banking expertise in financing agriculture.
2. Conservatism of Malaysian bankers, majority is risk-averse and does not appreciate how value is generated.
3. Strict requirement of collateral denied credit to smaller entrepreneurial and innovative farmers.
2. Recommendations: 
1. Banks must play its part in this strategy, by changing its conservative attitude.  Banks need to invest in developing expertise on agriculture; increase the number of consultants who truly understand agriculture and food production.
2. Innovative venture and incubation funds should be created to help younger farmers to set up new farming enterprises.
3. For loans below RM100,000, it is recommended that banks will grant without collateral, but disbursed in trenches upon certified production of progress reports of farm development. Qualification of farmers is to be provided by the local industry association, verified by an independent accounting firm or by the banks' own experts. For loan above RM100,000 and less than than 1.0 million, provide loan up to 100% of the market value of the collateral instead of the present 70% of the market value, applying the same oversight procedures and standards.
4. A review of present financing schemes is due:
3 F loans: quantum, interest rates to be reviewed in line with prevailing interest conditions;  for example, post-1997 interest overall reduction did not benefit 3F loans. Application procedure to be simplified.
• Tie loans with training hours as one way of upgrading Farmers’ education.
• More innovative loans are provided for higher value agriculture such as honey production, restoration of soil and converting them to chemical-free farming.
• More innovative venture capital scheme is made available to develop niche farming.

1. Issues/Challenges:
1. The development of high value-added resource-based products is still limited.
2. Malaysian exports consist of primary and intermediate products.
3. 70% of the total raw materials used in the food processing industries are imported.
4. Farmers are reluctant to produce on contract for food processing companies. As such, inconsistent supply resulted in many small and medium scale agro-based firms to operate below capacity.
5. Halal license requirement is too expensive for the smaller producers.
2. Recommendations:
1. Processing Industry, without which it is hard to realize the potential of Malaysian’s agriculture and avert disaster related to bumper harvest and deflation in the global market.
2. Farmers DO NOT adhere to agreements to sell to food processor once prices for their raw produce improves.
3. Special development program is created to bring in food processing technology and equipment. Import tariffs to be liberalized on these equipment.
4. Food Tech and Food Science be made a priority subject in institutions of higher learning. Encouragement is made to food producers who innovate on traditional Malaysian food offerings.
5. To provide tax rebate incentive etc. to encourage the farming sector to employ 100% local worker through investment in mechanization and human resources development to upgrade productivity. 

1. Issues/Challenges:
1. R & D is not marketed oriented. There is a gap between research conducted by present institutions and the needs of the market. For example, the Josapine pineapple seedling selling for RM0.80 per unit goes to show the size of gap between government researchers and market reality.
2. Planting technology, care and management of farm, pest control, disease control and post harvest technologies are critically needed by farmers, and not efficiently transferred from the existing institution to the farmers. 
3. Develop policies and conditions to allow academic and researchers in government universities to own equities in ventures that commercialize their intellectual capital.
2. Recommendations:
1. Involve existing institutions including the National Academy of Science.
2. Streamline and re-staff government research institutes with competent and experienced personnel’s sensitive to market needs. The success of other great agriculture nations of the world shows INTERGRATION and COORDINATION is not less important than the development of expertise or new knowledge; we need people who understand the market, and how to commercialize the findings of the research, as well as how to develop mechanism to get farmers to adopt these new knowledge.
3. Make full use of research by local institutions of higher learning. Award researchers accordingly and adequately. Venture capital fund be available to help starts ups, and allow academia and researchers to participate.
4. Build and share with the private sector, a database of Malaysian expertise on agriculture and provide opportunities for private sector participation.
5. Engage the small farmers by making research available to them free of charge or at a small fees and sending consultants to the farms to help them upgrade.  Field consultants must understand how to train and work with farmers, and harness knowledge and experience from the ground.
6. Research on post harvest technology and management is given priority.

1. Issues/Challenges:
Programs and courses conducted in languages the  participants are not comfortable in and in venues too far away from the farming community is one reason  rural farmers do not participate in these programs.
1. The absence of learning culture among farmers, preference for quick fix solutions has been very entrenched. Change programs ought to take this into consideration and allow for adequate time for conversion to take place.
2. The absence of appropriate commercial and large scale food production courses available by local institute of higher learning both private and public. E.g. Number of prober rice farming and processing courses in any of our local higher institute of learning while the whole up and down streams of rice industry commands a total turnover more than RM 3.0 billion annually.
2. Recommendations:
1. Focused on developing extension services, sending field officers to help farmers in the farms. Taiwan and China have very successful extension programs that were pivotal in upgrading farmers’ knowledge and getting them organized.
2. Courses conducted by various government departments to be conducted in language farmers’ are comfortable in; including the Chinese language.
3. Courses to be conducted near to farmers’ location
4. Make certain training for upgrading are compulsory and support it by the provision of a study loan and tax deduction allowance or even imposed a minimum number of hours for renewal of license.
5. Provide a grant to train and develop a competent faculty and technical consultants to support this upgrading.  The Government is urged to draw expertise from the private sector and pay attention to practical expertise over academic achievement in the selection of candidates.
6. Give special encouragement and boost to the development of skilled management and technical personnel at university levels to encourage the nurturing of agriculture expertise. It is proposed that Universiti Putra Malaysia focus on Agriculture as its specialty.
7. More effective education and knowledge transfusion: Today’s information and communication technology should be fully exploited to make the transmission of knowledge and information. Content of these programs to be reviewed to make them more interesting and interactive and farmer-centered.  Programs on TV1 are broadcast on the wrong time; they are dull and not interesting. (In contrast, Australia has very interesting programs, which could serve as lessons for us).  Privatizing this function to get the best and most creative content provider to execute this function is one solution.

1. Issues/Challenges:
1. Before all the above issues are resolved, farming will remain a labor-intensive operation. And there is acute shortage of skilled and interested people in farming.
2. The existing tenure of foreign labor if far too uncertain, and volatile, makes reliability a big problem in committing investment to farming.
3. Young people do not want to become farmers, opt for the cities and more urban-type of employment. A survey of those University graduates who studied farming are mostly involved in the provision of services to the farming sector, and not in managing farms.
2. Recommendations:
1. The terms of foreign labor to be liberalized. The yearly or two-year renewable term carries too high a cost for employer. Also the high turnover makes the training of these workers wasted.
2. Open up to more sources of recruits. Let the industry decide where are the best sources of recruits of its foreign labor, as it will affect their long-term development plan. For example, many companies have plans to set up satellite farms to take care of markets in other ASEAN and Asian regions, recruiting from their target markets will help them train up personnel for their expansion.
3. More stringent control measures are implemented to prevent migrant workers from running away from the employers who sponsored their trip here. This includes imposing strong penalty on employers who employed runaway workers.
4. To provide tax rebate incentive etc. to encourage the farming sector to employ 100% local worker through investment in mechanization and human resources development to upgrade productivity. 

1. Issues/ Challenges:
1. Quality Assurance is key to consumer confidence in both domestic and export markets. 
2. Malaysia lacks an internationally recognized Agriculture Standard.

Past problems cast doubt on government credibility, further hinders export market development. Problems with vegetables and pork exports to Singapore puts hundred of millions of export revenue at stake. (Industry figures show export revenue earned on Singapore-bound vegetable at RM100 million and live pigs at RM500 million.)
2. Recommendations:
1. The Government facilitates with the Industry Councils to create an independent quality assurance body with widely acceptable global standards. It is proposed that this is a privatized entity, preferably a third party renowned global player. This way we can ride on the prestige and reputation of a credible organization to break into global markets.
2. All produce put on sale in the market are encourage to submit themselves to such standards.
3. Empower the Joint Council to regulate its members. For example, penalty for not observing pesticide rules is to de-list of membership from the respective association. It is compulsory for farmers to belong to a particular industry before they are granted the license to farm.  Self regulation has proven effective in many farming communities around the world. For example, in some farm communities in Japan, farmers discipline each other, if produce from the area shows unacceptable level of quality standard, produce from the entire area will be banned from the market.

 

1. Issues/Challenges:
1. For years Malaysians are used to import products. To cause a change in this mentality, extensive and focused promotion must be made. This involves institutional advertising and concerted promotion on the part of the government and producers. The Taiwan Agriculture Standard is one such program where concerted messages are directed at local consumers to make the distinction between Taiwan produce and imports, a campaign the government spearheaded to make the distinction for local produce in preparation of WTO opening.. Financial support must come from the government, this can be in the form of advertising and promotion grant given to the industry councils to execute the promotion programs aimed at boosting consumption.
2. Local produce is often not price and quality competitive compared to imports.
2. Recommendations:
1. Make market development of Malaysian farm products a priority, both at home and abroad.
2. Joint effort between government and industry to promote Malaysian made products among the people. For example, average consumption of vegetables among Malaysians is only about 30 kg per capita, compared to 100-120 kg per capita in the more developed world. The government must support for example, a vegetable and fruit consumption campaign via national media and grass root activities. The Malaysian Ministry of Health, National Health Foundation, National Cancer Society and The Kidney Foundation should be encouraged to come out to support a healthy diet campaign, this will work to the benefit of the nation in a reduced medical bill and a healthier nation.
3. It is especially recommended that the national electronic media be fully used to make the campaign effective. Messages and presentation must be interesting and appealing. Supporting materials such as posters, celebrity spokesperson, leaflets, website should be set up to facilitate and build preferences for Malaysian grown produce.
4. Malaysian trade offices, tourism office and embassies located abroad are recruited into a worldwide campaign to promote Malaysian agriculture produce. This campaign has to be focused and coordinated through the industry councils.
5. Re-install exports allowance and strengthen the quantum of benefit (from 5% to a more attractive quantum). A more comprehensive export promotion program is devised to boost final food production for export, not agriculture commodity export.

1. Issues/Challenges: 
1. Our existing quarantine and importing of foreign input and products are too liberal so much so that new strains developed by foreign companies find easy way into our market. One example is genetically modified food and seeds.
2. This could bring adverse consequences to our ecology and affect the health of Malaysians.
3. The Nipah Virus epidemic exposed the unpreparedness of the local livestock industry in combating virus and disease outbreak.
2. Recommendations:
1. Government to revamp and tighten quarantine arrangements to reduce the risk of contamination of local environment through imports, movement of people and produce.
2. Develop and enforce a strict biosecurity code, applicable to livestock and plants, including GMO materials.
3. Disease control and compensation mechanisms must be developed as soon as possible to prepare for outbreak of viruses and diseases. The local poultry and livestock, inspite of the lessons of the Nipah Virus, have not instituted constructive reforms and remain highly vulnerable.

1. Issues/Challenges:
1. Excessive used of fertilizers and other chemicals, ignorant farmers often overused such inputs, leading to wastage and pollution of the environment, especially water.  As experience in foreign countries shown, conventional agriculture actually carries a high social cost.
2. Careless chemical based farming led to the production of unsafe food. Farmers themselves have to grow food on a separate plot of land for their own consumption is a good indication of the extent of the problem.
3. Loss of topsoil will take thousands of years to renew.
2. Recommendations: 
1. The federal government to initiate a national blueprint on sustainable agriculture and land use to be strictly enforced in all states.
2. Form a technical council comprises experts in the area to advise the government with the purpose of disseminating information and educating farmers.
3. Provide support for farmers who wish to convert their farm to organic and sustainable production. For example, a combination of subsidy and loan can be made out to farmers to tie over the period of conversion before the converted farm becomes productive again. On an average, it takes THREE years for a farm to be fully converted to the organic mode of production. The United Kingdom has in place a conversion subsidy to help farmers to exploit the opportunity of the organic food market and to restore ecological balance.
4. Provide fiscal incentive for farms that utilize and recycle waste as input for farming. For example, farms that produce their own compost and organic fertilizer will receive tax exemptions.
5. Incentive and Fiscal program be installed to encourage the setting up of Green Farm services, such as organic fertilizer plant, recycling of waste etc. A national award for Green Business is also recommended. (See Appendix E on A Proposal to Pahang State Government to lead the creation of Green Agriculture zone in Janda Baik.)

1. Water Resources
2. Weather Forecast
3. Electricity, Roads, Clinics, Schools and Agriculture Support stations need to be built and upgraded to support the surrounding farming community.
4. Infrastructure for processing, packaging and preparation for export should be planned and considered. 
5. If commitments were made to develop a more congenial and conducive environment in the rural areas, more talent would stay back.
6. Liberalize import tariffs on inputs such as pesticide, fertilizers, and equipment. High tariffs have led to smuggling of such inputs from neighboring countries.

Feedback Welcomed!

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