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ETP ANNUAL REPORT 2011
Agriculture
The Agriculture National Key Economic Area (NKEA) focusses on
transforming a traditionally small-scale, production-based sector into
a large scale agribusiness industry that contributes to economic growth
and sustainability. This transformation will be based on an integrated
and market-centric model that focusses on economies of scale and
value chain integration
The transformation strategy comprises four key themes:
1.
2.
3.
4.
Exhibit 11.1
182
Capitalising on competitive advantages
Tapping premium markets
Aligning food security objectives with increasing Gross
National Income (GNI)
Participation in the regional agriculture value chain
Based on the four themes, the NKEA Agriculture Lab in 2010
mapped out 16 Entry Point Projects (EPPs) and 11 Business
Opportunities (BOs). These initiatives are expected to generate
RM28.9 billion in incremental GNI and 74,600 jobs by 2020.
One of the significant milestones in the Agriculture NKEA this year
was the development of an incentive procedure that allows the
private sector to undertake the planning and implementation of
Normal Procurement Procedure NKEA Incentives Procedure
Duration 420 days 60 days
Government cost 100% project cost 30% project cost*
Payment to private sector Forward payment Reimbursable basis
Construction design outcome May or may not meet private sector’s specifications Built by private sector
Project cost overrun Borne by government Borne by private sector
Project off-take by private sector Depending on interest by private sector Secured, private sector’s own project
* for applicable EPPs
a desired project. Previously, agriculture projects with the private
sector were subjected to Treasury Instructions and detailed
planning by the government department was required before
any project could be considered for approval. All procurements
would be conducted through the government departments. This
procedure could take up to six months to complete and there
was a constant risk of mismatch in terms of the specifications
given by the government department against those needed by
the private sector.
In October 2011, PEMANDU and the Delivery Management Office
(DMO) in the Ministry of Agriculture (MoA) obtained approval
from the Ministry of Finance for a new disbursement mechanism
specifically designed to implement the EPPs under the Agriculture
NKEA. The table below shows a comparison of the normal
procurement procedure and the new mechanism: