High purchasing power and a better quality of life will lead to higher expectations on the part of consumers, including a wider range of food.
THE Agriculture and Agro-based Industry Ministry is in the midst of drafting a new policy for the agro food sector as the Third National Agriculture Policy will terminate in 2010.
This new policy will cover the period between 2011 and 2020, which is a critical time when Malaysia plans to achieve an advanced high-income economy.
The success of this policy will determine whether Malaysia will be food-secure or highly dependent on imports for our daily meals, taking into consideration the demands of a high income population.
Increasing our dependency on imported food is not a sustainable long-term strategy. The vulnerability of the country’s food supply has increased as shown by the impact of recent increases in oil prices, input prices and global food prices on our domestic supply and prices of food items.
In the future, we can expect global demand for food to continue to increase as a result of population growth and increased income.
Current estimates by the Food and Agriculture Organisation (FAO) project that there is a need to increase global food production by 70% by the year 2050 to sustain food demand.
However, the world is faced with many constraints to produce more food as arable land for agriculture and water is becoming increasingly scarce.
There are also new emerging issues and challenges such as disease outbreaks, high energy prices, competitive use of food for biofuel and climate change which have a direct negative impact on food production.
The formulation of a new agriculture policy in a high income economy will also be affected by demand-side considerations.
In 2020, we envisage that the population will have high purchasing power and a better quality of life.
Naturally, this will lead to higher expectations on the part of consumers. They expect safe and quality food; they want variety in the food they consume; they are knowledgeable, health-conscious and are highly concerned about what they eat and how food is produced.
In a high income economy, discerning consumers will opt to choose food which offers better nutrition and will have the purchasing power to select from a diversified diet.
The problem of malnutrition, particularly the “hidden hunger” caused by missing micronutrients due to the consumption of food low in nutritional content and variation, will be a problem of the past.
In light of increasingly sophisticated consumer demand, as well as the need to reduce dependency on imported food, what then should be the policy implications for local food producers?
The policy framework over the next 10 years is to create value based on consumers’ need for quality, safety, nutrition, functionality and environmental sustainability.
Underpinning all this is the necessity to increase productivity and competitiveness of food production in the country leveraging on innovation-based growth.
Food safety and quality must start from where food itself starts – at farms.
To achieve this, the Agriculture and Agro-based Industry Ministry has introduced farm accreditation schemes to ensure that farmers adopt good farming practices, including soil and water management, judicious use of fertilisers and pesticides, waste disposal and proper post handling.
These practices include Good Agricultural Practices, Good Hygiene Practices and Hazard Analysis and Critical Control Point systems. As the demand for safe food increases, we can expect more and more farmers to adopt these accredited schemes.
However, food safety does not end on farms. A “whole chain traceability” mechanism has to be adopted to improve food safety and to ensure consumer confidence in food labelling. Food traceability has to be enhanced in the coming years.
Traceability along the supply chain from farm to table requires close collaboration among various government ministries, namely the Agriculture and Agro-based Industry Ministry, Health Ministry which enforces the Food Act, Domestic Trade, Cooperatives and Consumerism Ministry as well as food producers and those who process them.
The production of quality products to meet the demands of consumers in a competitive environment requires the supply chain to be short and efficient so that fresh produce can speedily reach consumers.
Discerning consumers with high disposable incomes will pay premium prices for freshness in the food they consume.
Sophisticated consumers are equally concerned about food production and its effect on the environment. Research and development on green technology has to be intensified.
Consumer demand will ensure a viable market for organic products, biodegradable packaging materials, energy-efficient farming and processing machinery as well as products which utilise agricultural by-products.
The wealth of crop diversity in Malaysia and its potential to deliver improved nutrition and better health can be developed to provide consumers with greater choice in local produce.
A wider range of improved local varieties of rice, fruits, vegetables and herbs can provide high income consumers with the variety they demand.
In the final analysis, food producers must embrace change and produce safe and high quality food at competitive prices.
The private sector must play a dominant role to ensure domestic food production remains competitive in a globalised world. Under such a situation, it will be the small farmers who will need the most support to transform their production processes and practices in order to meet consumer and market demands.
The new Agro-food Policy will address these concerns and put in place the necessary policy support to ensure domestic food production remains viable and sustainable in a competitive business environment.