This article first appeared in Forum, The Edge Malaysia Weekly on December 23, 2024 - December 29, 2024

If one does any sort of analysis on national strategic plans for countries, one is certain to find that Malaysia has a situation that flummoxes. This bewildering situation is one where there are national master plans, then individual states have plans, then federal ministries, too, have plans. Do they cascade from an all-ruling plan of master plans? I don’t know, actually, as, and here’s the thing, some of these state and ministerial-level plans are kept secret.

Any economist would tell you that a major part of making plans and actions work is expectations management. That means, letting the economic agents, that is, people like you and me, be informed as to what the plans are about, what the road map is, and what the public’s role is in executing the plan and helping to make it a success.

Thus, those who are keen to help in one area or another — but are restrained by the withholding of data, statistics and the halatuju (direction) of things — actually rejoice when a plan is made available to the public. Such was the case with the availability of the National Agrofood Policy 2021-2030 (NAP 2.0) that we economists could see where the sector is, and where we could perhaps pitch in to help. The importance of agriculture? Food.

The NAP aims to, inter alia, strengthen food security. It breaks down the agricultural sector into four subsectors, being paddy and rice; fruit and vegetables; livestock; and fisheries and aquaculture.

The NAP outlines five policy thrusts:

1. Emphasis on modernisation and smart agriculture;

2. Strengthening market and product access;

3. Human capital development;

4. Food system sustainability; and

5. Creating conducive business ecosystems and governance.

Six policy objectives have been set:

1. Drive income growth and facilitate better quality of life for food producers;

2. Raise production output with quality harvest by increasing productivity;

3. Establish more agile and resilient value chains with high value-added activities;

4. Improve the food safety and nutritional well-being of Malaysians;

5. Embrace greater economic, social and spatial inclusiveness; and

6. Encourage greater adoption of sustainable consumption and production.

The implementation of the NAP comprises six policy objectives, five policy thrusts, 21 strategies and 77 action plans. That’s a lot of things to have in mind.

The interesting thing about the NAP is that it actually shows the self-sustenance levels (SSL) that Malaysia has for key foods, as shown in the table.

Several things can be immediately noticed:

1. Malaysia is only self-sufficient in chicken meat and eggs. Nothing else. However, as one would recall, chicken prices have been volatile due to the simple fact that chicken feed was all imported. One understands that efforts are underway to grow corn locally to serve as chicken feed. To protect those efforts, the imposition of tariffs is needed.

2. Beef is perilously low in self-sufficiency. That must change. Cattle farming is big business because of the economics of it. Hence, it needs to be approached in a big way. It is not for smallholders.

3. In fisheries, the country is almost self-sufficient. However, the fatal flaw is that it is mainly “inshore fishing”, which is now almost “farmed out”, and efforts are underway to basically re-equip the fishing fleet from small boats to ocean-going ships. This takes time and requires much money, a hard task given the economics of fisheries.

The NAP itself is a massive document that not only addresses the problems and challenges that confront the agriculture sector, it also sets the main targets per category of agriculture, as well as all the other supporting objectives that need to be done.

In this, we would try to strengthen the effort with the following suggestions:

1. Very little was mentioned about opening new land for agriculture. This, in our opinion, is the key to rapid movement towards meeting SSLs, especially so in rice, fruit, vegetables, cattle and aquaculture. In short, everything except actual fishing, although new ports and canneries would require land. Actual budgeted allocations made would be the best signals given.

2. In this respect, and for the need for geographical relocation given the ruinous floods that occurred in November and December 2024, which hit the rice-growing area of Kedah especially, it brings focus to opening new fields in Sarawak and Sabah. These two states are large and sparsely populated, hence ripe for opening new tracts of land for agriculture.

3. This means greater coordination and cooperation between the federal and state governments in opening new land (a state issue), spending on transport access (a joint issue) and on irrigation (a state issue where federal funding could come in). Further, on fisheries, boat-building funding, new ports and their facilities, cold storage and canneries could see the private sector, state and federal governments play a part.

4. To encourage new entrepreneurs as well as aid strategic planning, definitive pro forma sample business plans that capture the costs of operations by location, crop and herd need to be made available. These would not only help new entrants identify capital needs but also target optimal sizes of herds and plantation acreage (this is one of the main weaknesses in paddy farming in the country). Further, agriculturists would certainly benefit from financial management knowledge as well as being kept informed of new scientific discoveries in genetics leading to better seeds, crops and animals. In the US, from as far back as 40 years ago, farmers have listened to agriculture futures prices on the Chicago Board of Trade (now CME Group) and trends to help them choose crops.

It is heart-warming to note that the Ministry of Agriculture and Food Security is placing greater emphasis on increasing food supply. The worst-case scenario did happen — countries that thought they could just go overseas and buy the food their people needed found that there was not only a shortage globally, but supplier countries simply moved to protect their own interests by refusing to sell. There even came a point where some countries had to send their top leader to go buy food for their country.

In short, food security would best mean that Malaysia is domestically growing and rearing its food needs. It will not be possible to do everything, of course, due to resource constraints and all that, but certainly, staple foods need to be targeted first.

Huzaime Hamid is the chairman and CEO of Ingenium Advisors (www.ingeniumadvisors.org), Malaysia’s financial macroeconomics advisory

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