Making agriculture great again

The person in charge of bringing this change to the country is MoA Minister Salahuddin Ayub


There was once a time when the agriculture sector contributed nearly 40% to Malaysia’s total GDP.

At that point, the country’s development policy was focused on industrial crops for export markets, while the vast palm oil and rubber plantations made the country a leading producer of the two commodities.

During this period some five decades ago, agriculture was the key driver of the national economy and provided the benefits of foreign-exchange income, capital creation and employment.

Today, while the country continues to be among the world’s largest producers of palm oil and rubber, the agricultural sector’s contribution to GDP stands at only 8.5%.

Favourable policies towards the manufacturing sector in the 1980s altered the relative importance of the agricultural sector, which led to shortages of labour, higher cost of production and competition for land with other sectors.

While the new ideas had allowed Malaysia’s economy to grow at an impressive rate of 8% per annum until the late 1990s, the reduced dependency on the agricultural sector created new concerns on the shortage of food for both local and global consumption.

The rise in world population, the threat of a trade crisis and climate change have forced governments all over to relook into their agricultural policies — including Malaysia.

With a massive national debt, slowing global growth and increasing worries on food security, the country now has every reason to put new life into a once-thriving sector of the local economy.

The person in charge of bringing this change is Agriculture and Agro-Based Industry Minister Datuk Salahuddin Ayub.

In an hour-long interview with The Malaysian Reserve at his office in Putrajaya, Salahuddin spoke about his plan to cultivate other commercial crops, reforms in the Ministry of Agriculture and Agro-based Industry (MoA) and his experience as minister, four months after the historic May 9 general election (GE).

Growing into the Role

Salahuddin has the presence of a man on a mission.

Four months into office, his room still lacked décor that reflects his personality and conversational pieces that would stimulate an exchange with his guests.

He opted to sit at his desk for the interview and offered little cartons of milk that was given to the ministry in abundance.

It was clear. The man had a simple character — practical and very much focused on his job. Looking at his turbulent history in politics so far, it is easy to understand why.

The 56-year-old Pulai MP’s journey as federal minister has seen many ups and downs.

His early days in politics saw him lose a state assembly seat in his home state of Johor in 1999 before he won a federal seat in Kubang Kerian, Kelantan, in 2004 as a member of PAS.

His 32-year involvement with the party included roles as PAS Youth chief and PAS VP until his eventual exit to join splinter group Parti Amanah Negara as its deputy president.

His resounding victory under the Amanah banner in the recent GE made him a favourable candidate to assume a ministerial role under Prime Minister (PM) Tun Dr Mahathir Mohamad’s leadership.

After a rough start in adjusting to his new role as a federal minister, Salahuddin said he is more confident and determined to deliver his duties.

“I am enjoying it and learning very fast. I am more confident now after going through all the obstacles and difficulties in my early days in the ministry. The learning curve is very interesting and now my learning moves into areas of policies.

“God willing, with my strong determination, I will deliver and people will benefit from all the assets and incentives from this ministry,” he said with conviction.

New Malaysia, New Direction

Salahuddin has already paved a new way forward for his ministry which places high emphasis on food security, as well as higher income for farmers who remain largely in the bottom 40% (B40) income quadrant.

His plan would include an initiative called “Source of Earnings and Sustenance” which will promote agriculture as a new source of livelihood in Malaysia.

“Under this new policy, we would introduce new crops including durian, coconuts, pineapples, corn grains, jackfruits and other crops that will bring new income to our farmers in the country,” he said.

To achieve this, Salahuddin will appoint a new chairman in each of the 13 agencies under the MoA including the Farmers Organisation Authority, Fisheries Development Authority of Malaysia and the Malaysian Agricultural Research and Development Institute.

“We are waiting for the PM’s approval,” he added.

Salahuddin said the new leadership at these agencies constitutes reforms that will allow people to benefit directly from government programmes.

“We will focus on good governance and integrity, enhance the delivery system, as well as curb bureaucracy hurdles so that all policies can reach the people efficiently,” he said.

Changes in Tekun, Agrobank?

Apart from managerial changes, the minister does not expect any removal of agencies within his ministry.

However, he said there is a chance that the National Entrepreneurial Group Economic Fund (Tekun) will be transferred to the Ministry of Entrepreneur Development (MED).

Tekun and 16 other agencies were put under eight different ministers after the MED was dissolved in 2009 by the previous Barisan Nasional government.

The agency is now expected to be returned to the MED after the PM decided to re-establish the ministry.

“I will have to fight to retain Tekun under the MoA because they are giving microcredits to the smallholders of farmers at the grassroots level. I have some plans to uplift Tekun’s role to be similar to Grameen Bank in Bangladesh,” Salahuddin said.

If his attempt fails, Salahuddin expects Agrobank to take up the role of offering microcredits to small farmers instead.

“I am satisfied with their current role, but I feel they can do more in fulfilling their social obligations.

“We had a meeting two weeks ago with Agrobank and they presented their objectives, vision and mission, and what they are going to do next year.

“My emphasis is still for them to play their role in helping the B40 group,” he said.

A ‘Rice Bowl’ in the East

Malaysia produces about 2m tonnes of rice each year, which is below the self-sufficiency level of 3m tonnes (Pics by Muhd Amin Naharul/TMRpic)

In addition to elevating the income of farmers, a key challenge for the new government is also to ensure the country’s food security level.

Currently, the government’s effort to increase the country’s self-sufficiency ratio on rice to about 80% from the present 72% is facing some challenges due to the shortage of land in Peninsular Malaysia.

Malaysia produces about two million tonnes of rice each year, which is below the self-sufficiency level of three million tonnes.

To cope with the shortfall, the country imports rice from Thailand, Vietnam, Pakistan and India each year, making it the 14th-largest rice importer globally.

Salahuddin said a viable option would be to look at Sabah and Sarawak as the new jelapang padi (rice bowl) of the country.

At present, the title is synonymous with the state of Kedah, which produces nearly half of Malaysia’s total production of rice.

The massive scale of the rice industry in the state had even prompted the Kedah state government to ban the conversion of paddy fields to housing and industrial lots.

“We are looking at a new ‘rice bowl’ because we are experiencing a decrease in arable land. This is our great challenge with the new development that is coming in. We will explore Sabah and Sarawak because they have more land there,” Salahuddin said.

Apart from paddy fields, the government is also looking to expand the plantation of corn grains, coconuts and pineapples in the two eastern states.

“I have engaged the chief ministers in Sabah and Sarawak and one of the important discussions was on land.

“I hope these two states can provide enough land for us. We are looking at planting corn grains, coconuts and pineapples there. If these two states agree to provide land to achieve our goals, we will have enough land,” Salahuddin said.

The minister is looking to boost the country’s production of pineapples and durian following his visit to China earlier in August. Salahuddin is also encouraging more exports of coconuts and related products of the fruit as it is the fourth-most important industrial crop in Malaysia after oil palm, rubber and rice.

Budget 2019 and the NAP

Like every other ministry, Salahuddin hopes to get a higher allocation in the upcoming Budget 2019.

However, he is also mindful that the country’s fiscal position may make a raise impossible.

“Surely, I would prefer a higher allocation in the budget so it can be distributed to drive the industry’s growth. But with the current financial constraints, we will have to work smart.

“We will need to use all the resources given to us efficiently and deliver the best, even if the allocation is lower than last year’s,” he said.

In 2018, the agricultural sector was given a RM6.5 billion allocation, the highest amount received by the ministry.

Of the total, about RM2.3 billion was expected to be channelled as incentives for the purchase of fertilisers and production input for fishermen, rubber smallholders and farmers.

Salahuddin said the government must be ready to clean up and update its data of farmers and fishermen in order to ensure that the allocation would be utilised in a proper way.

“Any incentives or subsidies must reach genuine fishermen and paddy farmers who are in real need. By cleaning up our records, we will get a more accurate figure on the real industry players who are in need of government support,” he said.

Commenting on the National Agrofood Policy 2011-2020 (NAP), Salahuddin said the government will discuss a new version of the NAP after the Malaysia Agriculture, Horticulture and Agrotourism Show 2018 this November.

“The food security issue (highlighted in the NAP) cannot be solved by just the MoA. It crosses a number of other ministries. As such, we will need to establish the National Food Security and Drugs Council. I will bring this up in the Cabinet meeting later,” he said.

He cited the monopoly issue involving Padiberas Nasional Bhd which involves a special committee of eight different ministries to address the problem.

“The same goes here.”