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Crop Diversification in the Asia-Pacific region - United Nations in ...

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competitively. The l<strong>in</strong>kage generates considerable employment, <strong>in</strong>come, economic growthand reduces poverty.The cluster-based agro-<strong>in</strong>dustrial development as identified <strong>in</strong> <strong>the</strong> Second IndustrialMaster Plan (IMP2), 1996-2005, seeks to streng<strong>the</strong>n both <strong>in</strong>ter and <strong>in</strong>tra-sectoral l<strong>in</strong>kages<strong>in</strong>clud<strong>in</strong>g <strong>the</strong> development and expansion of <strong>in</strong>termediate and support<strong>in</strong>g <strong>in</strong>dustries.Through this approach, agricultural production will be more specialized to meet <strong>the</strong> needs ofvarious domestic and global market segments. This will encourage <strong>the</strong> production of highquality and high value produce, facilitate product differentiation and <strong>in</strong>crease value-addedagriculture.5. CHALLENGES, OPPORTUNITIES AND PROSPECTS OF CROPDIVERSIFICATION5.1 ChallengesThere are many challenges fac<strong>in</strong>g <strong>the</strong> agricultural sector <strong>in</strong> general and cropdiversification <strong>in</strong> particular. Firstly, <strong>the</strong>re is a need to reduce labour requirements <strong>in</strong>agriculture. There is an acute shortage of farm labour lead<strong>in</strong>g to high employment ofimmigrant workers <strong>in</strong> <strong>the</strong> agricultural sector. This is due partly to <strong>the</strong> slow adoption ofmechanization <strong>in</strong> certa<strong>in</strong> production processes, especially harvest<strong>in</strong>g.Secondly, <strong>the</strong>re is a need to maximize land utilization. Land for agricultural activitiesis becom<strong>in</strong>g more limited due to conversion for o<strong>the</strong>r uses such as <strong>in</strong>dustrial, residential andurban uses. Despite this, <strong>the</strong>re are still substantial areas of idle agricultural land andabandoned hold<strong>in</strong>gs. It is estimated that <strong>the</strong>re are about 400,000 hectares of idle agriculturalland all over <strong>the</strong> country and this has been and cont<strong>in</strong>ues to be a big problem.There is a need to streng<strong>the</strong>n <strong>the</strong> competitiveness of Malaysian agriculture. Theimplementation of <strong>the</strong> agreements under <strong>the</strong> World Trade Organization (WTO) and <strong>the</strong>Common Effective Preferential Tariff (CEPT) scheme of <strong>the</strong> ASEAN Free Trade Area(AFTA) have created greater competition for Malaysian agriculture.There is a need to enhance private sector <strong>in</strong>vestment <strong>in</strong> food production. Totalprivate <strong>in</strong>vestment <strong>in</strong> agriculture dur<strong>in</strong>g <strong>the</strong> 1990-95 period was only RM9.5 billion ascompared to RM84 billion <strong>in</strong> manufactur<strong>in</strong>g.The smallholders need to be transformed <strong>in</strong>to a more commercial sector. Efficiencygaps are still substantial between <strong>the</strong> smallholder and estate sector. The smallholder sectorcont<strong>in</strong>ues to experience problems of low productivity and uneconomic hold<strong>in</strong>gs size.The concerns for environment and susta<strong>in</strong>able development at both <strong>the</strong> domestic andglobal levels require more <strong>in</strong>novative and efficient agricultural practices for economicdevelopment of <strong>the</strong> sector as well as to ma<strong>in</strong>ta<strong>in</strong> <strong>the</strong> ecological and environmental balance of<strong>the</strong> country.5.2 OpportunitiesThere are tremendous opportunities for downstream activities. Where technologiesare available, <strong>the</strong>y should be acquired and tried out. The higher prices for <strong>the</strong> f<strong>in</strong>al products68

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