In the ancient past, the invention of agriculture formed the seeds for the birth of civilizations. In our present day, agricultural productivity remains one of the biggest factors in the economic growth of developing nations. In fact, many developed nations got their high-income status firstly on the back of their country’s agricultural productivity.
Thanks to revolutions in agriculture through the years, we are now able to support the largest population in the history of humanity. Furthermore, with the globalised nature of our world, we are now able to live in a world of great excess, where food security is never in doubt. You can now have a salad with sundried tomatoes from Italy, leafy greens from Vietnam, sesame seeds from Japan and olive oil from Greece, all by going to your local grocer.
However, globalisation can be a double-edged sword. In an interconnected world market, countries that have the competitive advantage and higher productivity will thrive, while countries with inefficient industries will fall behind.
On the global scale, Malaysia is a country blessed with 7 million hectors of fertile, arable lands and perfect weather for agricultural cultivation. However, despite the advantage we have, our agricultural sector (which is mostly dominated by palm oil plantations), is still woefully inadequate to feed and sustain our population of only 33 million. Case in point, we spent a staggering RM52 billion on agricultural imports in 2018, importing chillies from Vietnam and India, bananas from Thailand and the Philippines and many other crops that our country is perfectly suited to grow for ourselves, and even be a significant exporter on the world market.
Going forward, it is vital that we transform our agricultural sector to be able to not just be self-sustaining, but also have a healthy surplus for exports. If we can increase the productivity and yield of crops, every party can reap immediate benefits; that is, profits to our farmers can be significantly increased; the consumers can enjoy lower prices while our country’s economy growth enjoys a steady increase, concurrently and simultaneously.
Problems in the Malaysian Agriculture Industry
In a 2020 study on Agricultural Productivity Growth and Its Determinants in South and Southeast Asian Countries (Sustainability, MDPI), Malaysia has one of the lowest growth rates of agricultural productivity in recent years, behind Indonesia, Philippines, Vietnam & Thailand.
While there are many elements that affect the agricultural productivity, it’s likely that a major contributory factor for Malaysia’s slower growth is that the industry is dominated by smallholders with an ageing farmer population, with low automation levels and high reliance on workers, resulting in many inefficiencies and low productivity.
If we keep at this pace, the long-term implication for Malaysia is an ever-increasing need for imported crops, because our supply cannot keep up with the increasing demand, locally and on the world market. What’s worse is that in the long run, how far we fall behind will only accelerate because a little thing called ‘The economies of scale’; where the larger the scale of an operation, the more efficient it can be, as such, per unit cost of each produce can be significantly lower.
In this context, if the status quo of Malaysian agriculture sector remains; dominated by smallholders and low automation; while our neighbouring countries modernizes and automates their farms at scale, there will be no way for Malaysian farmers to compete with their productivity per square acre, and therefore with their prices, even on the local level.
The fact is, this is already the current situation, it’s just a question of how much worse the problem can get for our farmers in the future without any intervention. Consider chillies for instance, while year to year prices may vary, on average imported chillies are significantly cheaper compared to our local varieties. In 2018, the average cost of imported chillies, including international transportation cost priced in, was about RM8/kg. On the other hand, our local chillies, grown right here within our borders, costed about RM12/kg. This is one of the many examples that points to a local agricultural industry that can be, and needs to be a lot more productive to avoid being priced out entirely by other countries.
Another contributory factor to the problems we are facing is that of unsustainable and wasteful farming practices. For many farmers, the standard practice is to water, apply pesticides and fertilize crops at fixed schedules; whether there are already enough nutrients, whether it rains or shines, the schedule goes on all the same, wasting precious resources. Multiply that by the number of crops across the entire farm or plantation, and the cost of resources that could have been saved skyrockets. This results in significantly reduced profitability. By just improving one single factor, the allocation and optimization of resources, local farms could have the much-needed cost advantage they need to stay competitive.
On a sidenote, the resource waste isn’t just bad for a farm’s bottom line, it’s also horrible for the environment. Current farming practices generally include planting a single crop on large swaths of farmland. Cycle after cycle of these monocultures causes the soil to be depleted, which then requires large amounts of artificial fertilizers. The inefficient watering practices can then result in fertilizer and pesticide run-offs into rivers and streams surrounding the farm, creating further problems to the ecosystem beyond the farm.
Going forward, farmland will keep getting scarcer as demand for food and development simultaneously increases with population growth; all while climate change results in more droughts, floods and crop failures. In the face of our changing world, it is more vital than ever to use our existing farmlands more efficiently and effectively, to allow Malaysia’s farmers to remain competitive both in our local and global markets.
The Malaysian agriculture sector will require solutions that can increase the productivity, and hence profitability of our Malaysian farms and plantations, while also protecting our soil and local environment to ensure longevity for our produce going into the future.
What could the solution be? The answer is technology. The fortunate thing is, technological breakthroughs in many different fields have come together and provided a solution to this problem. This is the leap that our farmers, with a helping hand from the government and local technology companies, must take, and quickly at that.
