Business Potential for Agricultural Biotechnology - Asian Productivity ...

Business Potential for Agricultural Biotechnology Products
than 1,000 (0.6%) had an academic background in biotechnology. Through 2003 local universities
had produced more than 3,000 graduates in this field of study, but not all are effectively employed
as biotechnologists, since employment opportunities in the biotechnology field are still
limited in both the public and the private sectors. In 2003, fewer than 100 companies were involved
in producing biotechnology products, even fewer in agrobiotechnology. Most of the biotechnology
activities, including R&D, were carried out by government institutions.
Public awareness of agro-biotechnology products is also low. In a survey conducted in
1999 by the ASEAN Food Information Center on Malaysians’ perception of GMOs, only about
18% of the respondents were aware of food biotechnology and about 50% did not know about
biotechnology. A survey by the Far Eastern Economic Review, however, showed that 75% of
Malaysians are very concerned about genetically modified food. These studies indicate that
either people do not understand what biotechnology is or the issue of GMO is of great concern.
In a survey of 1,400 Malaysian Muslim respondents around Kuala Lumpur conducted by the Institute
of Islamic Understanding Malaysia (IKIM), results showed that 66.7% had heard of biotechnology
but only 52.2% know what it is about (Ministry of Finance, 2004). The survey also
showed that while 67% could explain genetically modified organisms (GMOs), genetic engineering,
and biopharmaceuticals, only 40% knew what cloning is. This indicates that the acceptance
level is low but promising.
Competition in land use is another critical issue in agriculture. Competition with other
sectors, especially housing and manufacturing, has restricted increase in the amount of land
suited to agriculture from 5,535,000 ha in 1990 to 6,173,000 ha in 2004 (11% increase in 14
years). The limited land suited to agriculture has resulted in low productivity and a higher cost of
production. Agrobiotechnology techniques and practices can be used to overcome these issues.
The total workforce in agriculture is expected to decline from 1.5 million workers in 1995
to 980,000 in 2010. With the current land and worker shortages, the cost of production has
increased steadily for the past 10 years. Malaysia has lost its competitive advantage to neighboring
countries such as Thailand, Vietnam, and Indonesia. It must transform its agricultural sector
into a modern and dynamic one through technology and innovation, and biotechnology is one of
the alternatives.
Intellectual property rights (IPR), patents, and plant breeders’ rights (PBR) are crucial for
development in agricultural biotechnology. A patent is a right granted to inventors by the government
to prevent others from imitating, manufacturing, using, or selling a specific invention
for commercial use during a certain period, usually 17 to 20 years. The patent holder, in turn, is
obligated to disclose the invention to the public. Plant breeders’ rights are granted to plant breeders
by the government to prevent others from producing or commercializing materials of a specific
plant variety for a period of about 15 to 20 years. Malaysia has not yet granted patent protection
in agricultural biotechnology. This can constrain development, since ownership rights are
not guaranteed.
Opportunities
The market potential for halal food (food processedaccording to Islamic law) is significant.
Its global market value was estimated at USD400 billion in 2004. Malaysia intends to tap this
market. As a Muslim country, it is a potential hub for the halal market. Current halal food
production is relatively limited (around MYR10.9 million annually). There is a great opportunity
to explore this market, a the use of biotechnology techniques and practices can advance the
manufacturing of food products. Halal food products that can potentially be produced using biotechnology
practices, including the production, biogeneration, and modification of foods and
bio-ingredients, are natural food or food ingredients, modified palm oil, and feed or feed supplements
from herbs.
Malaysia has the second-highest per capita income in the region, with an increase of 8.5%
from MYR14,838 (2003) to MYR17,741 (2004). In terms of purchasing power parity, it was
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