The bright side of global food price increases

MYT 8:05:11 PM

PENANG: The global price increase for commodities and food is a blessing to the country's economy as the agriculture sector is now generating better revenue. Second Finance Minister Tan Sri Nor Mohamed Yakcop said commodity and agriculture product prices had risen higher than those of manufactured products and services over the years, which was a good sign to the country's economy.

"The trend is a positive reversal for the agricultural sector, because the global price increase can be translated into better income for local farmers especially those in the palm oil industry.

"The world is changing and we are facing new challenges. In modern history, there has never been a time when agricultural products and commodity prices were higher than manufactured products," he said.

He was speaking at the memorandum of understanding (MoU) signing between Mimos Bhd and Mutiara.Com Sdn Bhd for an agricultural technology transfer project here on Sunday.

Nor Mohamed said it was important to make use of Malaysia's advantage as an agriculture country with the demand for commodity and agricultural products rising. "Apart from opening more land for agriculture around the country, we will also look into ways to increase farmers' productivity through technology," he said.

Nor Mohamed said the agriculture sector only contributed six to seven percent of the country's gross domestic product (GDP) previously while manufacturing and services covered 30% and 51% respectively.

He added that the RM11.4bil allocation for agriculture under the Ninth Malaysia Plan was a 70% increase compared to what the government allocated under the Eighth Malaysia Plan.

"The Prime Minister took a bold but wise step when he shifted the country's focus from the manufacturing and services sectors to agriculture in 2004.

"Small holders in the oil palm business in Felda and other private enterprises are now making money and earning higher income. Some are making RM6,000 monthly," he said.

He added that the government was also focusing more on agriculture to control prices, ensure food security and protect the interest of low and middle-income earners.

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