Development of Agribusiness Enterprises - Asian Productivity ...

are necessary with the private sector and entrepreneurs who have the technology,
marketing outlets and capital/resources to increase food production. Special attention
is being given to paddy, fruit and vegetable production. The state government is
expected to allocate land to FOs for food production; and
(b) Effective organization of farmers’ groups – Farmers are being encouraged to become
members of FOs. Several incentives have been introduced to attract the younger
generation to take up membership. Currently, there are approximately 500,000 farmers
involved. Youths should be persuaded to stay in the agriculture sector to operate the
agro-based industries and other agriculturally related activities. They need to be
trained as new highly potential entrepreneurs. The Ministry of Agriculture organizes
a Malaysia Agricultural, Horticultural and Agro-tourism Show each year as a platform
to promote appreciation of the most successful farmers of the year as well as to update
them on the latest global agricultural technology.
Information and Communication Technology to Increase Productivity
Recently, the government proposed a comprehensive e-agriculture scheme to
encourage information and communication technology (ICT) usage in the farming sector,
especially in the case of small-scale farmers. However, FOs do not have the expertise,
experience and capabilities for venturing into this sector. Therefore, it will be necessary for
the government to support FOs in obtaining ICT facilities to enable them to improve their
efficiency and effectiveness in agricultural business activities. In addition, the farmers also
need to be educated and trained in computer usage and how the Internet can help them to be
competitive in their business.
Under the initiative of the National Information Technology Council (NITC) eeconomy
working group, a proposal was presented to the government to kick-start the
project. It is now waiting for the allocation of funds to implement it. Three major areas are
covered by the pilot plan, i.e., the farmers’ network, the resource center and the trading
exchange network, with a special target of selected fruit and vegetables in the initial stage.
Requirement for Competent and Experience Staff to Manage the Farms
A large plantation farm requires a competent staff to manage it on a cost-efficient basis.
Since the returns from agricultural projects are unpredictable, FO members hesitate to invest
large amounts of capital in this sector. As a result, they have limited sources of funds to run
their farms and hire competent management personnel.
In order to overcome the above constraint, the government has continued to invest in
agricultural schemes. Under the Eighth Malaysia Plan, several development schemes have
been approved for the implementation of food production projects.
Weaknesses in the Marketing System
The lack of funds and marketing outlets has restricted the FOs in the marketing of
agricultural products to the consumer. Most FOs depend on wholesale markets as outlets for
their products. This has resulted in price instability, due to the influence of supply and
market demand.
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