The US$12 billion reason Mahathir’s Malaysia wants a return to agriculture

As it grapples with a US$12 billion food import bill, the country is considering a renewed focus on agriculture to boost food security and revenue in tandem

Malaysia is also looking to move away from its reliance on palm oil, which takes up a large chunk of the sector’s resources

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The agriculture sector contributed 99.5 billion ringgit to Malaysia’s GDP in 2018. Photo: AFP

Published: 8:00am, 21 Jan 2020Updated: 9:53pm, 21 Jan 2020

In 1991, Malaysian Prime Minister Mahathir Mohamad introduced the concept of Vision 2020 – a plan for the Southeast Asian nation to become self sufficient and fully industrialised in less than three decades. The government’s policies in the 1990s sought to push Malaysians – particularly ethnic Malays, who make up more than 60 per cent of the country’s population – from agriculture to the manufacturing sector.

Now that 2020 is here, however – and Mahathir is back in the driver’s seat after his Pakatan Harapan coalition’s shock victory in the May 2018 election – some policymakers are suggesting a return to agriculture, a former cornerstone of Malaysia’s economy.

Grappling with a high food import bill – about 50 billion ringgit (US$12.3 billion) in 2019 – the government has been actively encouraging youths to take on agriculture and agro-food as professions, paying closer attention to grants and loans given out to farmers and fishermen. It has also cultivated ‘agropreneurs’ who bring technology into farming.

According to the nation’s Agriculture and Agro-based Industry Minister, Salahuddin Ayub, Malaysia’s food import bill had increased by an annual average of 6.5 per cent, with the likes of cereals, cocoa, vegetables, sugar and meat all brought in.

The agriculture sector contributed 99.5 billion ringgit to the nation’s GDP in 2018, with palm oil the sector’s major contributor at 37.9 per cent. But as Malaysia’s palm oil has been caught on the back foot by increasing pressure from the European Union – which is looking to phase out biofuels – and tensions with key importer India, prominent voices such as ex-finance minister Daim Zainuddin are calling for more emphasis on agriculture and the cultivation of the farming industry to reduce unemployment and boost revenue.

Palm oil is the major contributor to Malaysia’s agriculture sector. Photo: AFP

“If we start planting the right thing, we can reduce our imports. Not only that, we can also increase our exports, create employment and increase income. Once we do this, locals can get fresh produce at a lower price. If there is excess, we can export and bring in foreign money,” Daim, an adviser to the current Mahathir administration, told local media recently.

Malaysia was ranked 28th in the 2019 Global Food Security index, a jump of 20 places from the previous year, which the government attributed to its reduction of dependence on imports by encouraging the diversification of crops and improving fruit exports. A report published last year by the government-linked Khazanah Research Institute said while food access was no longer an issue for most Malaysians, food affordability remained an issue.

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