Kuala Lumpur: There is a need to relook the prevailing dynamics of land cultivation to optimise land use due to a lack of resources to promote the agri-food sector, says an economist.
Bank Muamalat (M) Bhd chief economist Mohd Afzanizam Abdul Rashid said vertical farming will help minimise land use and grow crops more sustainably.
“Perhaps, vertical farming is suitable in urban areas, especially when there are plenty of commercial buildings. As for the rural folks, optimising abandoned and heritage lands would be the low-hanging fruits,” he told Bernama. Also, the agricultural sector will need rebranding as the sector requires narratives that embrace new technology and higher income to attract young talent into the industries.
Malaysia has been relying on foreign sources for domestic food cultivation.
Various food items in Malaysia have been consistently below the 100% self-sufficiency ratio (SSR), signalling the need for imports to meet domestic demand.
Additionally, the import dependency ratio for all types of onions stands at 100%, indicating complete reliance on external sources.
According to Bank Muamalat, the import dependency ratio for onions, round cabbage and chilli stood at 100%, 55.5% and 74%, respectively, as of 2022; for mutton, beef and cuttlefish, it is 91.5%, 85.6%, 70.6%, respectively.
“(This situation has) resulted in the country being vulnerable to changes in international prices, and hostility from food-exporting countries could potentially cause a supply shock which could exacerbate an increase in food prices,” Mohd Afzanizam said. With the right policy intervention, it can be a catalyst for economic growth, the economist said, adding that there is a need to go back to basics.
“The focus has always been on the plantation sector which understandably is a commercial venture that would give higher returns. However, our dependence on food imports needs to be revisited.
“If we can do it well, it can be a catalyst for a balanced growth strategy among the states and become a prime mover to alleviate the poverty among Malaysians,” he said.
Mohd Afzanizam noted that addressing food security can be a two-pronged strategy, that is, to increase food supplies and availability, while the other is to use it as a catalyst for poverty eradication.
According to the World Bank, in its Malaysia Economic Monitor released in October 2023, Malaysia recorded 6.2% of absolute poverty, higher than the pre-pandemic level of 5.6% in 2019.
This means that, as of 2022, nearly 490,000 Malaysian households still lived below the average national poverty line of a monthly household income of RM2,589.
Malaysia University of Science and Technology economist and provost for research and innovation Prof Geoffrey Williams said eradication of absolute poverty could happen overnight, as one could identify those in the hardcore poor category and provide regular cash transfers to bring their income above the poverty line.
“Malaysia has been doing this and it has been successful. The eradication of hardcore poverty is based on direct cash transfers and other direct assignments to targeted households. This is the correct approach,” he told Bernama. Williams said direct cash transfers did not cost a great deal and could be incorporated and paid from the existing subsidies budget.
“It will be cheaper than the current subsidies. A RM500 monthly transfer to B40 households would cost RM17.5bil per year. This would incorporate the existing bantuan (help) schemes.
“So taking existing budgets and using the Central Database Hub (Padu) to target recipients is completely affordable to run a Universal Basic Income (UBI),” he said, adding that the UBI threshold should be set based on Bank Negara, the Statistics Department and the Employees Provident Fund (EPF) Belanjawanku mobile application.
“The EPF’s Belanjawanku estimates living wages. Those below this threshold should receive direct cash transfers to top up to the UBI level. This is by far the best way of eradicating absolute, relative and other forms of poverty.
“It is the basis of the new Padu system and can replace all other ad-hoc welfare handouts,” he added.
On whether urbanisation could help to alleviate poverty, Williams said urbanisation happens naturally and may not always solve problems.
“It can be much better to reform economic opportunities outside of major cities by reforming Felda, for example, as suggested recently by (Deputy Prime Minister) Datuk Seri Dr Ahmad Zahid Hamidi,” he added.
In March, Ahmad Zahid said the government will announce new approaches to benefit Felda soon.
He is also determined to implement immediate changes to Felda, especially Felda settlers’ net income to enable them to get out of hardcore poverty.
