Shaping the Environmental Shaping the Environmental

Performance of Agriculture.Performance of Agriculture.

By

K.Subramaniam , MCIEH; PJK

MSc(Envt), BSc(Hons)(Envt & Occ.Health), Dip RSH.

IntroductionIntroduction• The agriculture sector in Malaysia The agriculture sector in Malaysia

is an important and have a is an important and have a challenging role as the third engine challenging role as the third engine of growth under the Ninth Malaysia of growth under the Ninth Malaysia Plan (2006-2010) with expected Plan (2006-2010) with expected growth rate at an annual rate of growth rate at an annual rate of 5.0% (MOA, 2007). 5.0% (MOA, 2007).

IntroductionIntroduction• The overall policy thrusts of the The overall policy thrusts of the

agriculture sector will focus towards:agriculture sector will focus towards: greater commercialization and the creation of greater commercialization and the creation of

high-income farmers high-income farmers promotion of greater private sector promotion of greater private sector

investment with various efforts geared investment with various efforts geared towards increasing agricultural productiontowards increasing agricultural production

the provision of better incentives and services the provision of better incentives and services support (MOA, 2007). support (MOA, 2007).

IntroductionIntroduction• A development budget amounting to RM 11.435 billion was A development budget amounting to RM 11.435 billion was

allocated during this period. allocated during this period. • Malaysia welcomed foreign investment in the: Malaysia welcomed foreign investment in the: • agriculture sector, agriculture sector, • technical assistance and capacity buildingtechnical assistance and capacity building• areas such as floriculture, livestock; and, areas such as floriculture, livestock; and, • R&D in biotechnology.  R&D in biotechnology. 

• Malaysia has its endeavor to Malaysia has its endeavor to develop and modernize its develop and modernize its agriculture sectoragriculture sector as envisaged in the National Agriculture as envisaged in the National Agriculture Policy, and the 9Policy, and the 9thth Malaysia Plan Malaysia Plan

• There is no doubt that an There is no doubt that an increased environmental impactincreased environmental impact will occur in Malaysia (MOA, 2007). will occur in Malaysia (MOA, 2007).

Agro-based IndustriesAgro-based Industries• The Industrial Master Plan outlined the development The Industrial Master Plan outlined the development

of agro-based industries comprising products of agro-based industries comprising products processed from processed from fish, meat, fruits and vegetables. fish, meat, fruits and vegetables.

• Agro-based industries to be developed for growth is Agro-based industries to be developed for growth is small compared to:small compared to:the manufacturing; and,the manufacturing; and,resource-based industries spearheaded by:resource-based industries spearheaded by:• palm oil and palm oil products, palm oil and palm oil products, • wood and wood-based products, and; wood and wood-based products, and; • rubber and rubber-based products (MOA, 2006).rubber and rubber-based products (MOA, 2006).

Agro-based IndustriesAgro-based Industries• There are 20,455 companies operating in There are 20,455 companies operating in

manufacturing and downstream processing manufacturing and downstream processing and about 18,271 or 89.3% are SMEs. and about 18,271 or 89.3% are SMEs.

• Only 3,270 companies (16%) are in the agro- Only 3,270 companies (16%) are in the agro- and resource-based industries comprisingand resource-based industries comprising food and beverages, food and beverages, rubber and rubber products and rubber and rubber products and

palm oil and palm oil products (MOA, 2006)palm oil and palm oil products (MOA, 2006)..

2. The General Functions of MOA:2. The General Functions of MOA:i.i. To draw and plan the policy, strategy and Agricultural Development To draw and plan the policy, strategy and Agricultural Development

Programme. Programme.

ii.ii. To undertake the task of monitoring, evaluating and coordinating the To undertake the task of monitoring, evaluating and coordinating the implementation of project/ programme which is carried out within or implementation of project/ programme which is carried out within or beyond Integrated Agricultural Development Project (IADP). beyond Integrated Agricultural Development Project (IADP).

iii.iii. To provide economic analysis services including collecting, analyzing To provide economic analysis services including collecting, analyzing and restoring information /agricultural data scientifically and furnish and restoring information /agricultural data scientifically and furnish the outcome to the end users. the outcome to the end users.

iv.iv. To formulate and implement references services and research To formulate and implement references services and research programme and to introduce agricultural management information programme and to introduce agricultural management information system. system.

v.v. To ensure the participation of Agricultural Ministry  in international To ensure the participation of Agricultural Ministry  in international programme. programme.

vi.vi. Act as one stop agency for the private to get the advice and expertise Act as one stop agency for the private to get the advice and expertise in Agricultural sector (MOA, 2008).in Agricultural sector (MOA, 2008).

Millennium Development Goals (MDG)Millennium Development Goals (MDG)

• Malaysia is committed to achieve the Millennium Malaysia is committed to achieve the Millennium Development Goals (MDG) set by the United Development Goals (MDG) set by the United Nations Millennium Summit in the year 2000.  Nations Millennium Summit in the year 2000. 

• The first of the eight goals is to The first of the eight goals is to eradicate extreme eradicate extreme poverty and hungerpoverty and hunger.  . 

• The FAO estimates that there The FAO estimates that there 850 million food 850 million food insecure peopleinsecure people (14.2%) out of the world's (14.2%) out of the world's population of nearly 6 billion. population of nearly 6 billion.

• The immediate target is to reduce that number by The immediate target is to reduce that number by half by 2015 (MOA, 2007).  half by 2015 (MOA, 2007). 

Environmental Performance in Environmental Performance in AgricultureAgriculture

• There is a need to improve environmental performance in There is a need to improve environmental performance in agriculture, through agriculture, through enhancing the beneficial, and; enhancing the beneficial, and; reducing the harmful reducing the harmful environmental effects environmental effects to ensure the to ensure the sustainability sustainability

of resource useof resource use. .

• Agriculture has a complex relationship with: Agriculture has a complex relationship with: natural resources and the environmentnatural resources and the environment, and, andattributing specific environmental effects to agriculture is difficult and attributing specific environmental effects to agriculture is difficult and

not fully understood. not fully understood.

• Agriculture is a major user of: Agriculture is a major user of: land and water resources land and water resources yet needs to maintain yet needs to maintain • the quantity and quality of those resources the quantity and quality of those resources • in order to remain viable. in order to remain viable.

• Agriculture activities:Agriculture activities:

a)a) generates waste and pollution generates waste and pollution

b)b) yet it also conserves & recycles natural resources, yet it also conserves & recycles natural resources,

c)c) changes landscapes; and, changes landscapes; and,

d)d) habitats for wildlife. habitats for wildlife.

• Many environmental effects are not confined to agriculture Many environmental effects are not confined to agriculture

itself and also with itself and also with off-farm effectsoff-farm effects. .

• The impacts are often concentrated locally and regionally, The impacts are often concentrated locally and regionally,

although some are of national and international significance.although some are of national and international significance.

• The The main driving forces main driving forces in determining agriculture’s environmental performance:in determining agriculture’s environmental performance:

a)a) Agricultural and environmental policies, Agricultural and environmental policies,

b)b) markets, markets,

c)c) farm management practices, farm management practices,

d)d) structural change, structural change,

e)e) technological developments; and, technological developments; and,

f)f) socio-cultural preferences socio-cultural preferences

• They interact and sometimes give conflicting signals. They interact and sometimes give conflicting signals.

• It is no simple task, however, to identify and measure the respective influence of It is no simple task, however, to identify and measure the respective influence of

all these driving forces. all these driving forces.

• The The heterogeneityheterogeneity of the natural resource base, farm structures of the natural resource base, farm structures

and production systems used by farmers, and the and production systems used by farmers, and the assimilative assimilative

capacity of ecosystemscapacity of ecosystems differ from place to place.differ from place to place.

• These influences on various factors have environmental These influences on various factors have environmental

outcomes such as: outcomes such as:

a)a) identification and measurement, identification and measurement,

b)b) the predominance of dispersed, non-point source pollution in the predominance of dispersed, non-point source pollution in

agriculture; and, agriculture; and,

c)c) lengthy delays in the manifestation of environmental lengthy delays in the manifestation of environmental

outcomes, outcomes, e.g. pollution of groundwater.e.g. pollution of groundwater.

• The sufficiency and regularity of food supplies is The sufficiency and regularity of food supplies is

largely assured in European countries (OECD). largely assured in European countries (OECD).

• Generally rising prosperity and awareness have led Generally rising prosperity and awareness have led

to to

a)a) greater public demand for food produced in ways that greater public demand for food produced in ways that

also conserve; or,also conserve; or,

b)b) enhance the natural or aesthetic environmentenhance the natural or aesthetic environment..

• The environmental performance of agriculture has evolved The environmental performance of agriculture has evolved

within the context of a long history of agricultural policies within the context of a long history of agricultural policies

in EU countries (OECD) , most of which deliver support in EU countries (OECD) , most of which deliver support

through commodity production-linked measures through commodity production-linked measures i.e. i.e.

a)a) market price support, market price support,

b)b) output payments, and output payments, and

c)c) input subsidies, input subsidies,

• This is largely aimed at supporting farm incomes.This is largely aimed at supporting farm incomes.

• Agricultural policy Agricultural policy reforms reforms and and trade liberalisationtrade liberalisation have reduced the have reduced the

importance of production-linked policy measures, but remain dominant in EU importance of production-linked policy measures, but remain dominant in EU

countries (OECD). countries (OECD).

• Economy-wide environmental regulations increasingly impact on agriculture. Economy-wide environmental regulations increasingly impact on agriculture.

• Markets functionMarkets function : :

a)a) by government intervention by government intervention

b)b) to match the demand and supply of agricultural commodities but, to match the demand and supply of agricultural commodities but,

c)c) with regard to many environmental goods and services, with regard to many environmental goods and services,

d)d) they either function badly or are non-existent. they either function badly or are non-existent.

• Frequently, the nature and quantification of the public’s demand for Frequently, the nature and quantification of the public’s demand for

““environmental performanceenvironmental performance” from agriculture is not at all clear.” from agriculture is not at all clear.

• Agri-food sector in EU (OECD) countries has witnessed:Agri-food sector in EU (OECD) countries has witnessed:

a)a) a steady trend in output growth, a steady trend in output growth,

b)b) largely through higher productivity, but largely through higher productivity, but

c)c) with mixed results on environmental performance. with mixed results on environmental performance.

• In the next half-century agriculture, worldwide, will be In the next half-century agriculture, worldwide, will be required to: required to:

a)a) double its output if it is to meet double its output if it is to meet

the expected increased global the expected increased global

demand for food, and; demand for food, and;

a)a) reduce hunger. reduce hunger.

• The challenge is whether agriculture can efficiently The challenge is whether agriculture can efficiently produce the food to meet this growing world demand produce the food to meet this growing world demand over time without over time without degrading natural resourcesdegrading natural resources: :

i.i. productive soils, productive soils,

ii.ii. unpolluted air, unpolluted air,

iii.iii.clean and sufficient supplies of water, clean and sufficient supplies of water,

iv.iv.conserved habitats, biodiversity; and,conserved habitats, biodiversity; and,

v.v. landscapes – and do so in ways that are landscapes – and do so in ways that are socially socially acceptableacceptable..

• In EU (OECD) countries environmental concerns in In EU (OECD) countries environmental concerns in

agriculture have been directly addressed through different agriculture have been directly addressed through different

combinations of: combinations of:

a)a) specific agri-environmental policy measures; specific agri-environmental policy measures;

b)b) agricultural policy measures that include environmental conditions; agricultural policy measures that include environmental conditions;

c)c) economy-wide environmental regulations and policies; economy-wide environmental regulations and policies;

d)d) zoning regulations; zoning regulations;

e)e) research and development, research and development,

f)f) education, and extension service provision; and, education, and extension service provision; and,

g)g) facilitation of co-operative, voluntary and market-based approaches.facilitation of co-operative, voluntary and market-based approaches.

• Policies have some impact on the environmental performance of Policies have some impact on the environmental performance of

agricultureagriculture, ,

i.i. the challenge has been to analyse the extent to which the policy measures and the challenge has been to analyse the extent to which the policy measures and

mixes of policies have facilitated or impeded that environmental performance, and mixes of policies have facilitated or impeded that environmental performance, and

ii.ii. to assess the economic and social costs involved. to assess the economic and social costs involved.

• While much work has been undertaken both in individual countries and in While much work has been undertaken both in individual countries and in

the OECD, in many cases the results are preliminary. the OECD, in many cases the results are preliminary.

• ResearchResearch is at a relatively early stage in understanding and measuring the is at a relatively early stage in understanding and measuring the

complex relationship between complex relationship between

a)a) policies, policies,

b)b) agricultural production and agricultural production and

c)c) environmental outcomes, environmental outcomes,

d)d) in order to evaluate policies and draw general and widely applicable conclusions.in order to evaluate policies and draw general and widely applicable conclusions.

• Agriculture has a significant impact on the environmenAgriculture has a significant impact on the environment in EU (OECD) t in EU (OECD)

countries as a major user of natural resources accounting for around: countries as a major user of natural resources accounting for around:

a)a) 40% of total land and 40% of total land and

b)b) nearly 45% of water use and, nearly 45% of water use and,

c)c) in many countriesin many countries, dominates and shapes the landscape. , dominates and shapes the landscape.

• Contrary when compared to other economic activities: Contrary when compared to other economic activities:

i.i. agriculture has both harmful, agriculture has both harmful,

ii.ii. beneficial effects on the environment, and;beneficial effects on the environment, and;

iii.iii. by changing the quality or quantity of soil, water, air, biodiversity and landscapes.by changing the quality or quantity of soil, water, air, biodiversity and landscapes.

ConclusionConclusion

ConclusionConclusion• There are a plethora of reasons for re-looking into this traditional There are a plethora of reasons for re-looking into this traditional

agro-food sector. agro-food sector.

• 1. The issue of 1. The issue of food securityfood security and the and the high food import bill high food import bill incurred by our nation require a strategic need to diversify our incurred by our nation require a strategic need to diversify our economic activity base to ensure that the production in food economic activity base to ensure that the production in food crops in which we have a crops in which we have a comparative advantage comparative advantage is actively is actively promoted as a new source of wealth.promoted as a new source of wealth.

• 2. 2. Enhance competitiveness Enhance competitiveness by opening up of our market through by opening up of our market through

the implementation of AFTA and WTO will require our local the implementation of AFTA and WTO will require our local producers to increase their productivity and competitiveness in producers to increase their productivity and competitiveness in order to compete in our domestic market and globally. order to compete in our domestic market and globally.

Conclusion• 3. The Agriculture Census 2005 shows that there 3. The Agriculture Census 2005 shows that there

are about 820,000 agriculture operators in Malaysia. are about 820,000 agriculture operators in Malaysia. • These These agriculture operators contribute to 8% of the agriculture operators contribute to 8% of the

total workforce in our nationtotal workforce in our nation. . • The bulk of the The bulk of the hardcore poor hardcore poor are located in this are located in this

rural-based sector rural-based sector and we have the responsibility to and we have the responsibility to help them achieve a better standard of living. help them achieve a better standard of living.

• According to the Households’ Survey 2004, about According to the Households’ Survey 2004, about 79% of the 36,500 households identified as 79% of the 36,500 households identified as hardcore poor were in the rural areas.hardcore poor were in the rural areas.

Conclusion• 4. It makes 4. It makes economic sense to diversify our sources of growtheconomic sense to diversify our sources of growth and to re-look into and to re-look into

the the untapped potential untapped potential of the agriculture food sub-sector as the next engine of of the agriculture food sub-sector as the next engine of

growth. growth.

• In fact, during the height of the recession in 1985 when our nation registered an In fact, during the height of the recession in 1985 when our nation registered an

overall negative growth of -1%, overall negative growth of -1%,

– the agriculture sector had the distinction of achieving a positive growth of the agriculture sector had the distinction of achieving a positive growth of

2.5% compared to the: 2.5% compared to the:

• manufacturing sector which registered a decline of 3.8%, manufacturing sector which registered a decline of 3.8%,

• mining recorded a decline of 1.4% and mining recorded a decline of 1.4% and

• construction sector contracted by 8.4%.construction sector contracted by 8.4%.

• Hence the great importance in agriculture! (MOA, 2008).Hence the great importance in agriculture! (MOA, 2008).

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