BY PROF DATUK M NASIR SHAMSUDIN
THE food sector in the country is facing major challenges that will persist for the next decades.
These include providing sufficient food to meet the growing population and rising per capita income as well as dietary changes, eradicating hunger and food insecurity.
The sector is also influenced by the megatrends that will shape the current and future characteristics of the sector. These megatrends include accelerating urbanisation, demographic shifts, geopolitics and shift in global economic power, and technological breakthrough that includes agricultural system technology and food distribution system.
Added to these megatrends, new dimensions in the price equation are the environmental impacts of modern agriculture and the role of crude oil, food safety, and bioenergy. These effects create further constraints on the food supply.
[ihc-hide-content ihc_mb_type=”block” ihc_mb_who=”unreg” ihc_mb_template=”3″ ]The food sector consisting of crops, livestock, and fisheries, however, has yet to match the performance of industrial crops.
This was translated into low self-sufficiency levels (SSL) for basic foods. For instance, in 2021 as reported by DOSM (2022), the SSL was rice (65%), beef (18.9%), mutton (10.7%), and fresh milk (56.7%).
As a result, our country has been a major food importer with a trade balance deficit of RM21.7 billion in 2020. It is also observed that imports of food accumulated to RM482.8 billion over the last 10 years, while exports amounted to RM296 billion.
Food and non-alcoholic beverages have also caused significantly the inflation rates. For instance, the inflation for January to August 2022 increased by 3.1% (DOSM 2022). This was driven mainly by food inflation which has risen by 5.1%.
The increase was mainly contributed by the increase in the subgroup of meat (9.2%), followed by milk, cheese, and eggs (7.3%).
At the global level, Malaysia ranked 42nd out of 113 countries in the Global Food Security Index (GFSI) for the year 2022. The GFSI deliberates three core principal issues of affordability, availability, and quality in food security measures.
In the past, increases in food production have primarily come from the expansion of cultivated land as well as from agricultural productivity increases. Most of the productive land is now being utilised. Hence, future increases in food production will have to be as a result of increases in productivity.
Looking ahead, to ensure the supply of quality and safe food at affordable prices, investment in food production should not only be evaluated in terms of private benefits but social returns and the country’s security and peacefulness. This requires an ecosystem and a mix between food policy, technology, and entrepreneurship.
Conducive Policy – investment in food production should not only be evaluated in terms of private benefits but social returns and the country’s security. To stimulate investment in food production, incentives to the private sector must be provided where the return on investment in food production is at least comparable to that of industrial crops.
In addition, the government needs to implement a land-use policy to enhance food security through the setting aside of adequate areas of agricultural lands and aquatic and other natural resources for food production and other sources of nutrition.
Technology – more funds should be given to investment, research, and adoption of agricultural system technology. Examples of these technologies are mechanization, soil and water sensors, drone, weather tracking, automation, vertical agriculture, artificial intelligence, nanotechnology, agricultural GPS technology, robotics, and precision agriculture.
Entrepreneurship – In order to complement the policy ecosystem and adoption of technology, food production should be practiced by entrepreneurs who can practice commercial production and adoption of advanced technology. Universiti Putra Malaysia (UPM) has the expertise to train agro-entrepreneurs through its Agro-entrepreneurship Incubation Program.
To minimize market disruption as the Covid-19 pandemic still looming, what is important now is that the authority should continue to closely monitor food prices and strengthen market supervision, ensure effective delivery of agricultural inputs including feed, ensure smooth logistical operations of regional agricultural and food supply chains, and ensure the smooth flow of trade and make full use of the international market as a vital tool to secure food supply and demand.
Note: The author is an agricultural economics analyst in the Faculty of Agriculture, Universiti Putra Malaysia. He is also a member of the National Agriculture Advisory Council, the Ministry of Agriculture, and the Food Industry.
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