Agriculture Sector Need More Than Subsidies to Boost Productivity and Food Security

To increase agricultural productivity, a combination of financial, logistical, and technological supports is needed.

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Published in BusinessToday & AstroAwani, image by BusinessToday.

In the previous article published by EMIR Research, titled “How Qatar Flourished in Food Security Despite Geographical and Geopolitical Challenges,” we explored Qatar’s core strategy for enhancing its food security status during crisis.

Qatar’s strategy is comprehensive. It follows the major trends in food security strategies across the globe (Figure 1), and, most importantly, acknowledges the country’s various weaknesses, countering them with the use of technology.

While the circumstances in Malaysia and Qatar are certainly different, it is important that we pursue a similar path towards enhancing our food security.

The 2022 Global Food Security Index ranked Malaysia 41st out of 113 countries worldwide. However, this slightly above-average ranking does not fully depict the current situation in Malaysia.

According to the 2022 report, even though rice production increased by 1.6% annually from 2000 to 2016, our consumption rate also increased by 1.7% annually during the same period, indicating that our rice production has been unable to keep pace with rising demand.

Furthermore, our paddy production has been declining since 2016, from 2.74 million tonnes to 2.43 million tonnes in 2021. Measured in tonnes per hectare, paddy production in 2021 was 3.75 tonnes per hectare, compared to 4.02 tonnes per hectare in 2015 (Abidin & Dardak, 2023).

In 2022, our rice self-sufficiency ratio (SSR) was 62.6%, with the remainder imported from India, Thailand, Vietnam, and other neighbouring countries (The Edge, 2023; The Star, 2023). Besides rice, the self-sufficiency ratios for vegetables, beef, and fresh milk were at the lower end as well, at 44.7%, 14.7% and 57.3% respectively (The Edge, 2023).

Although our poultry production remain stable at over 100% SSR, the production itself is completely reliant on imported feeds, which are vulnerable to sudden trade disruptions (The Malaysian Reserve, 2022).

In fact, we have already seen the effects of disruption after the eruption of war in Ukraine in 2022, which caused global supply-chain disruptions that massively impacted livestock feeds and fertilisers that we also depend on. The disruption caused a chicken shortage in Malaysia so severe, that the then government had to impose an export ban to handle the crisis.

The previous government came up with the National Agrofood Policy (NAP) as a strategy to improve our SSR, and set some ambitiously high targets to be achieved in 2020. For example, the targeted fruit SSR was at 107%, and the targeted vegetables SSR at 95%. We have not achieved any of the targets; in fact, some of our SSRs have worsened, potentially due to the COVID-19 pandemic (Farhana & Roslan, 2023).

The targets set under NAP 2.0, which were expected to be reached in 2030, were much more reasonable. However, the main concern is how we achieve them, which is why the essence of the Qatari strategy could come in handy.

Their strategy focuses on leveraging and conducting constant research into agro-technology, enhancing collaboration between the public and private sectors to support smaller farmers, and striking a delicate balance between import and local production with the goal of maintaining high SSR for certain commodities. Coincidentally, these are the weak points in our agriculture industry.

In a parliamentary session, the Minister of Agriculture and Food Security, Mohamad Sabu, mentioned that it is impossible to reach 100% self-sufficiency, and we should not confuse SSR and food security (The Star, 2023a). However, a high SSR is one of the major factors in food security, and enhancing self-sufficiency is one of the major trends that have shaped the best food security strategies worldwide.

Mohamad Sabu does acknowledge this, and is stepping up the efforts of the Ministry of Agriculture and Food Security (KPKM) to improve our SSR on critical food items, including vegetables and fruits.

EMIR Research has long been advocating for our agriculture industry to integrate technologies more profoundly into the industry, with the aim of increasing productivity. However, the progress has not quite met the desired pace, leading to a decline in certain areas of production, such as paddy, as previously mentioned.

The decline in productivity could partly be attributed to climate change, as weather is slowly becoming more extreme with hotter dry seasons and unexpected floods. These not only leads to shortages in water reservoirs for irrigation but also damage the production of paddy and vegetable alike (Mahmood, Rajaram & Guinto, 2022).

However, one cannot deny that modern technology can help in mitigating the impact of increasingly hostile climate. Climate change impacts the globe equally, yet Vietnam has managed to increase its rice production despite a reduction in cultivated area, due to its focus on innovating cultivation techniques and technology (Ministry of Agriculture and Rural Development of Vietnam, 2022).

The Chairman of the Farmers Area Organisation Pendang Selatan, Adullah Mohamad, has stated that the three main challenges in adopting agro-technology include a lack of knowledge, a lack of acceptance, and a lack of financial resource (The Star, 2024). This statement echoes earlier research by Abidin and Dardak in 2023.

As mentioned by Abidin and Dardak (2023), the Ministry of Agriculture and Food Industry (MAFI, predecessor of KPKM) found that 86.2% of rice farmers own machinery worth less than RM10,000. Despite the government’s efforts to modernise agriculture, the researchers found that only 64% of agriculture entrepreneurs understand the importance of paddy cultivation technology and have knowledge about it. Furthermore, 34% of them think that the prices for cultivation technology are an obstacle to adopting it.

The Malaysia government has been providing support to smaller farmers, but most of it is in the form of monetary support such as subsidies. Although the monetary support has alleviated some of the pressures on the farmers, especially in the purchase of seeds, fertilisers, and pesticides, it has not translated into higher productivity.

To increase agricultural productivity, a combination of financial, logistical, and technological supports is needed. Instead of simply giving money to the farmers or intermediaries, the government needs to get involve in the process of obtaining, delivery, training, and helping to maintain the technology.

This move could limit the interference that intermediaries have against the farmers, where the subsidies in the past have been repeatedly misappropriated, which has reportedly caused a wastage of RM158.08 million due to non-compliance, including awarding subsidies to deceased farmers (The Star, 2023b; New Straits Times, 2023).

If the technology were in the farmers’ hands and fully utilised, it could dramatically increase the production of food items. This would translate into higher income for the farmers and potentially lead to a reduction of future subsidies.

As the climate becomes hotter, and with limited arable land, the government should also collaborate with private sectors to further expand modern agriculture as well as vertical farming in urban setting.

The Qatari government has shown that investment in hydroponic farming works not only against extreme climate and limited arable lands, but also reduces water consumption.

Using the Input-Output-Outcome-Impact (IOOI) framework (Figure 2) to extrapolate the potential benefits of providing technological and logistical support instead of subsidies that are prone to leakage, it becomes clear that the former will provide a better, longer-lasting, and more sustainable impact on our food security and national development as a whole.

By focusing on more comprehensive way of integrating modern technology into our agriculture industry instead of monetary support, the impact is not only on food security but also on the creation of high-skilled job occupations. This is exactly what we need to attract more youth to participate in STEM education and TVET.

Moreover, increased modernisation in the agriculture industry could reduce reliance on foreign workers, as technology could resolve labour issues that threaten our vegetable production and supply. This was forecasted to result in a 40% reduction in one harvest cycle (The Sun, 2024).

With the climate becoming increasingly unstable, geopolitical issues at a new high, and the dreadful Disease X looming in the future, it is unsure when the next disruption of global trade will happen, and how severe it will be.

Thus, it is imperative that the government takes necessary steps to equip our farmers with modern technology, and empowers the agriculture sector to continue research and improve on our farming practices.

Chia Chu Hang is a Research Assistant at EMIR Research, an independent think tank focused on strategic policy recommendations based on rigorous research.

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