PETALING JAYA: Malaysia needs to diversify its agriculture industry to put greater focus on developing a variety of crops other than just oil palm and padi, as we have the climate and trade capacity to be a food export hub going forward.
This was the consensus of experts who also believe that changing diet preferences and improved spending practices necessitated a shift away from focusing on the self-sufficiency of rice and towards providing a wider breadth of high quality food crops to Malaysians.
Speaking during the World Bank Group’s virtual launch of their latest Malaysia Economic Monitor report, Sarena Che Omar, senior research associate at the Khazanah Research Institute said that Malaysia is uniquely positioned to export specialty local products to other countries, but have yet to do so.
“We are right on the equator, and yet we are not taking advantage of selling and exporting our unique goods like exotic fruits or specialty rice that is found in East Malaysia, which you don’t find anywhere else,” she said.
Sarena added that policies governing the food industry must change to allow for greater market competitiveness.
“We want to encourage small- and medium-sized enterprises (SMEs) to come in and push for marketing and trade, but for them to enter, regulations must change.
“Using specialty rice as an example, we have regulations that involve export and the movement of rice, which is great if you want to protect it for domestic use.
“However, if we want to export it, we are not encouraging SMEs by having all these restrictions regulating their growth,” she said.
Animesh Shrivastava, lead agriculture economist at the World Bank Group, said that rice self-sufficiency should no longer be a key concern as the crop is no longer as important to Malaysia as it once was, despite still receiving the lion’s share of the government’s agriculture spending.
“Rice considerably dominates agriculture spending, and this is despite rice accounting for less than 1% of household expenditure. While nearly half (45%) of agriculture expenditure goes towards rice, it has had limited success.
“Reviewing and rationalising the subsidies rice receives would be a good first step in moving the focus away from rice,” he said.
While rice once contributed around half of the average Malaysian’s caloric intake, that has dropped to 25% over the past 20 years, which illustrates the diversification of the Malaysian food bowl and the need to look at encouraging the development of other crops.
“Moving ahead, the main message for Malaysia is that there are many opportunities to improve the diversification of our agricultural output and improve their nutritional quality,” Animesh said.