Development of Agribusiness Enterprises - Asian Productivity ...

Malaysia is basically an agricultural country, being one of the largest producers of
rubber, oil palm, cocoa, pepper and tropical timber in the world. Agriculture in Malaysia is
dominated by oil palm as a major crop that covers approximately 2 million ha, followed by
rubber plantation (1.8 million ha) and cocoa plantation (400,000 ha). Paddy is the main food
crop, accounting for 650,000 ha. A variety of miscellaneous crops such as fruit, vegetables,
flowers, tobacco and tapioca are also grown on small areas.
In recent years, the Malaysian agriculture sector has declined due to a shortage of
labor, exhaustion of land resources and increasing emphasis on industrialization. The rapid
expansion of the manufacturing sector has altered the relative importance of agriculture in
the Malaysian economy, particular with regard to output and employment.
GOVERNMENT MINISTRIES INVOLVED IN AGRICULTURAL
AND RURAL DEVELOPMENT
The principal government ministries involved in the administration and development
of the agriculture sector are the Ministry of Agriculture, the Ministry of Primary Industries,
the Ministry of Land and Cooperative Development and the Ministry of Rural Development.
The objectives of the rural development programs in Malaysia are poverty eradication
and restructuring of society. In 1990, poverty was still prevalent among 22 percent of the
rural population compared with 8 percent in the urban areas. To eradicate poverty among the
rural population, the government is carrying out various development programs with special
emphasis on agriculture. The focus on agriculture is understandable as approximately 80
percent of the rural population are involved in agriculture and agriculturally related activities.
NAP3, which guides the national development of agriculture, was founded on a vision
of sustainable development of a dynamic agriculture sector. Under NAP3, the growth of
agriculture was seen as being market-driven, commercialized, efficient and competitive. The
overriding aim is to maximize income through optimal utilization of resources.
GOVERNMENT POLICIES IN AGRICULTURAL COOPERATIVES
In order to accelerate the development of rural cooperatives, the government
established statutory bodies such as FOA and the Fisheries Development Authority (FDA)
to enhance the development efforts. Since then, through concerted efforts, attempts have
been made to identify the farmers’ needs and develop them via the principle of self-help
cooperation.
Under NAP3 the government has underlined several policies to enhance the prosperity
of farmers institutions including:
(a) self-help, self-improvement and change to spearhead innovations and active
participation of FOs and agro-based cooperatives in the modernization process of
agricultural development;
(b) the establishment of a financial institution to effectively meet the current and
prospective credit needs of farmers’ institutions;
(c) the introduction of a human resources development program specific to farmers’
institutions. The objective is to meet the increasing need for capable management and
technical personnel for managing the institutions on a self-reliant and self-financing
basis; and
(d) the formation of a federation of farmers’ institutions.
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