The agriculture sector is a key component of the Malaysian economy. As at 2014, the sector makes up 9% of GDP and contributes 12% of the total national employment. The agriculture sector can be broken down into two subsectors namely industrial commodities and agro-food. The blueprint focus on the agro-food subsector for two main reasons:
1. The industrial commodities subsector is fairly mature given the presence of large and successful Government Link Companies (GLCs), which have contributed to uplifting the productivity of the sector. On the other hand, the Agro-Food subsector is more fragmented and dominated by small players, who can benefit from more guidance and intervention on productivity improvements.
2. The agro-food subsector is expected to increase its contribution to total value add of the agriculture sector as a whole.
The current key challenges which impact the productivity levels of this subsector have been identified as follows:
- Insufficient focus on value-adding activities and disconnections along the value chain
- Many small players with low levels of productivity
- Issues with quality and standards across the subsector
- Low adoption of technology and modern farming techniques.
Establish industry-led collaboration with educational institutional
- Linking downstream demand to upstream supply
- Embed robust contract-farming model across the subsector
- Encourage players to move into high value add products and markets
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