The main objectives for the State agriculture sector are to eradicate poverty the hardcore poor in particular, increase the income of farmers to RM4,000 per household by 2020, reduce income disparity between urban and rural areas, achieve food self-sufficiency as well as food security and to be the net exporter of agriculture produce.
The Ministry of Modernisation of Agriculture, Native Land and Regional Development will implement transformational initiatives namely Modernisation and Commercialisation of Agriculture Sector, Acceleration of Native Land Development, and consolidation and streamlining of all regional development programmes and projects.
The past and present efforts to commercialise the agriculture sector have generally focused on providing subsidies, usually in the form of production inputs, materials and small equipment, to smallholder producers and small entrepreneurs. However, the main drawback in this approach is that it focuses on primary production and does not address all issues along the supply chain.
For example, there is not enough attention being given to post-harvest handling, value added processing and marketing. Past attempts to address those issues have not been very effective and serious bottlenecks in the supply chain still remain.
The other major weakness in the present smallholder system is the lack of organised efforts that can ensure reliability of supply in terms of volume and product quality that the market demands.
Hence, other development approaches and new business models that can accelerate agricultural growth must be considered in order to bring about agriculture transformation and achieve a quantum leap in agriculture production and trade. This will help to raise the income of the rural communities.
The new business models must be able to harness the financial resources and business acumen of the private sector, while leveraging on their management and technical expertise. This means agriculture businesses must be developed and managed by corporate entities.
The corporate sector must be given a bigger role in developing and managing commercial agriculture to reduce the financial burden on the Government and to ensure commercial viability.
The State Government, to embark on this new direction, proposes to establish a Special Purpose Vehicle (SPV), to identify commercially viable agriculture businesses for investment purposes. Subsequently, the Ministry proposes to form a subsidiary company to manage and operate the business.
The SPV may finance the business either from its own resources, or may form joint ventures with suitable private partners. The key feature of the SPV business model is to divest itself of its equity in the venture once the business becomes successful and achieves a sound and financial footing.
The equity belonging to SPV will be offered at par to cooperatives or business organisations formed by farmers and land owners. The proposed SPV will be a new corporate entity created under an existing State Statutory Body.
The State Government has decided to provide a venture capital to the tune of RM100 million to enable SPV to operate. The funds will be used as investment capital in the establishment of the new agriculture businesses by the SPV.
Deputy Chief Minister, Datuk Amar Douglas Uggah Embas, who is also the Minister of Modernisation of Agriculture, Native Land and Regional Development, in an interview said his Ministry has been assigned a strategic role in modernising the agriculture sector, accelerating native land and regional development. This is crucial to accelerate the economic growth and development of the State under the Socio-Economic Transformation Plan (SETP).
He said the focus on Regional Development is timely and strategic with the objective to achieve a balanced development to enable Sarawak to leverage on the vast development potentials of an area so that the economic benefits derived from it can be shared and enjoyed by the people. The objective is also to reduce regional disparities in the State.
In this connection the Ministry of Modernisation of Agriculture, Native Land and Regional Development is revamping the land approval process not only to accelerate the development of NCR land but to ensure the development can be implemented successfully and speedily by investors and the landowners.
Datuk Amar Douglas Uggah Embas said his Ministry is fully committed to ensure the successful implementation of the new thrusts. In 2016, the agriculture sector contributed 13.7 per cent to the State economy and provided approximately 300,000 employment opportunities.
More importantly, the agriculture sector has contributed in eradicating poverty and uplifting the livelihood of the Rakyat especially those in the rural areas. Thus, concerted efforts must be pursued to further develop and increase the contribution of this important sector to the State economy.
Agriculture in Digital Economy
He said his Ministry, in support of the State’s agenda to develop the digital economy, will give emphasis on the application of Information and Communication Technology (ICT) along the value and supply chain in developing the agriculture sector. The Ministry’s immediate efforts are to focus on the development of a comprehensive agricultural database with ICT application and e-Commerce for agricultural business transactions.
The Ministry will, in the near future, encourage more commercial farmers or private companies to venture into a high-tech agricultural production technology such as precision farming in the State.
Datuk Amar Douglas Uggah Embas said the high food import bill of the State at RM4 billion in 2015 is a great concern to the Government. The State’s Self Sufficiency Level (SSL) in 2015 for fruits and vegetables, rice and fish were at 64%, 48% and 93% respectively.
Hence, more efforts are needed to improve the current farming system including new development approaches, with the adoption of modern technology still very low, so that food production system will be more efficient.
He believed the farm productivity could be boosted, besides providing all the prerequisites of modern farming inputs such as farm infrastructure and facilities, seeds, crop care and maintenance, post-harvest and marketing, through the adoption of smart farming technologies, which have to be transferred to farmers to resolve issues related to productivity.
He said the Ministry will be focusing on strengthening agriculture extension as the “Way Forward” to transform agriculture, in the overall efforts of modernisation and commercialisation of agriculture to meet the objective of high income farming community.
In this connection, the Department of Agriculture will intensify agriculture extension services to the target groups. It is pertinent that the Department revamps its current Agriculture Extension System to include the training of specialist technicians on the various subject matters at the grass root level.
This entails the setting up of a dedicated unit within the department to manage the extension programme. The Unit, with the rural agriculture stations, will drive the delivery of extension services closer to the rural farming communities.
Buffalo Production
Sarawak needs to increase buffalo population, which has dwindled from 11,000 heads in year 2000 to 5,500 heads today, to meet the high domestic demand for buffalo meat and from neighboring Negara Brunei Darussalam.
These include the import of breeding buffaloes, implementation of pawah programmes, development of entrepreneurs, making available more land for grazing and undertaking artificial inseminations. An allocation RM17.7 million has been approved under the Eleventh Malaysia Plan to finance these activities.
Datuk Amar Douglas Uggah Embas said agriculture production in Sarawak especially in the agro food sector faces many obstacles when it comes to marketing and sales as the domestic market is small; the State has to look to export markets to enable the agriculture sector to grow.
Hence, there is a need to organise and facilitate the marketing process along the whole supply chain, starting from production to post-harvest handling, processing, packaging and marketing to ensure that local agriculture produce can find ready markets both locally and abroad.
However, export markets have very stringent standards for product quality, packaging and labeling, which must be complied with. In this regards, the difference can be subjected to non tariff barriers imposed by the importing country. An example is the Sanitary and Phyto-Sanitary (SPS) requirements that most countries put in place to protect their local industry.
Datuk Amar Douglas Uggah Embas said trade in agriculture produce may also be governed by bi-lateral or multi-lateral agreements, which are generally designed to facilitate trade in specific products between countries. The local agriculture products, in addition to regulatory impediments, have to be content with the logistics of delivering goods from local farms to consumers abroad.
He said proper management of logistics is crucial in order to reduce costs and increase competitiveness with the generally under-developed transport infrastructure and distance from potential markets.
The State production base is also quite diversified, comprising smallholders, small entrepreneurs and large-scale producers. Consequently, there is a need to develop strong linkages between producers and exporters in order to ensure reliability of supply in terms of volume and quality.
He said most marketing activities would inevitably involve business to business (B2B) arrangements between local exporters and their business partners in importing countries. Hence, there is a need for a corporate entity to manage export of agriculture produce from the State given the multi-faceted and complex nature of the processes involved
Datuk Amar Douglas Uggah Embas said the State Government has proposed to set up Sarawak Agriculture Products Export Corporation, which is expected to be the gateway for the export of all agriculture products from the State, to play that role.
The Corporation will make greater use of information and communication technologies (ICT) in linking producers with buyers. This will be in line with the State Government’s vision of a digital economy for Sarawak.
The agriculture production from corporate entities, entrepreneurs and smallholders can have better access to overseas markets with the establishment of Sarawak Agriculture Products Export Corporation and application of ICT.
His Ministry is promoting the Anchor Out-Grower Farming approach that will leverage on the strength and capacity of the private sector as the Anchor Farmer in large scale farming in major food production areas.
The anchor farm would act as a prime mover in driving the production of large volume of quality agricultural product and at the same time provide assured market access for small holder producers, which will become the out grower farmers to the anchor farm and to be linked through contract farming mechanism. The agreed quantity, quality standards and price of agricultural produce will be determined through the negotiation between the anchor company and the smallholder growers.
The Ministry, to complement this initiative, has planned to set up several Collecting, Processing and Packaging Centers (CPPC) at strategic locations in the State. The Ministry, with the anchor farming and CPPC initiatives put in place, hopes to be able to enhance the production of large volume of quality agricultural produce to meet the domestic and export market requirements and also to resolve the marketing issues faced by the smallholder growers.
Accelerating NCR Land Development
The Government has formulated various policies and programmes to improve the livelihood of rural communities. However, the Ministry felt that further improvement ought to be made to the existing NCR-JV Model to bring forth greater benefits to the landowners. The Ministry is proposing the Leasing Model as an alternative development model to complement the existing JV Model.
The proposed Leasing Model will be based on an agreed fixed monthly rental per hectare between the landowner and the Investor. The payment of rental will commence from first year of planting and continue over the lease period of 60 years.
The Leasing Model will ensure immediate, consistent and sustainable returns to the NCR landowners. This is a good and practical model to accelerate NCR land development. One of the critical components of the Leasing Model is the quantum of rental which should be acceptable to both the landowner and the Investor.
The Government has put in place various development models for Regional Development in the State in the form of Rural Growth Centers (RGCs), Highland Development Agency, Agropolitan, Integrated Agricultural Development Areas (IADAs) and Upper Rejang Development Agency (URDA).
The Ministry has decided to revamp the development concept and the mode of implementation for Rural Growth Centers (RGC) in spearheading regional development. In this respect, the Ministry will engage with the various stakeholders in formulating strategic plan.
The main role of Divisional level committee of transformation of Rural Economy is to set policy directions, plan, coordinate and monitor and evaluate the implementation of approved programmes and projects for the rural economy.
The committee, to coordinate programmes and projects of 31 Federal and State Agencies, has been established in all Divisions. The committee, in executing its function has engaged with the various stakeholders to seek their views, suggestions and concerns on the implementation of rural transformation programs and projects.
Members of the committee, being chaired by Resident and the Divisional Department of Agriculture as Secretariat, comprise the relevant State and Federal Agencies and Statutory Bodies.
A total of 65 out of 82 registered vessels or 79% of the vessels have docked and landed their catches at Tanjung Manis Integrated Fishing Port. The fish landing has increased by 58% from 12,000 metric tonnes in 2015 to 19,000 metric tonnes in 2016.
The Government is committed to implement the key initial interventions based on the recommendations by the Cabinet Committee on Socio-Economic Transformation, which has determined six Key Result Areas to speed-up economic growth.
The primary objective is to achieve the economic transformation namely to increase investment in the industrial sector and SMEs participation especially in oil and gas and timber downstream industries and to modernize and commercialize the agriculture sector by enhancing the overall supply chain of the agriculture industry to raise income of farmers.
The other Key Result Areas are to create new growth in the services sector with special focus on tourism industry that will create tremendous spin off to the domestic economy, to increase business opportunities in urban centers through urban development and urban renewal, to increase participation in entrepreneurship, to develop landfills and waste management facilities that are environmentally friendly and to enhance the protection and conservation of lakes, water catchments and forest.
The State Government has approved an allocation of RM80 million to implement various programmes and projects under the Key Result Area (KRA) on Modernizing and Commercializing the Agriculture Sector under the Cabinet Committee on Socio Economic Transformation (SET).
