Plantation agriculture: some factors impinging on the future of the industry

Abstract

Agriculture played a pivotal role in the history of economic development in Malaysia. This is best reflected by the significant contribution it makes to the nation's gross domestic product at present more than one-fifth of the total. Although this proportion has declined over the last decade, largely because of the rapid expansion in the manufacturing sector, the contribution of agriculture in absolute terms has grown steadily to M$5.8 billion in 1980. Its importance becomes more manifest if one considers the fact that it is currently the source of more than one-third of total foreign exchange earnings and about two-fifths of total employment. Despite an active policy of diversification, agriculture more specifically, the plantation industry continues to occupy a pre-eminent position in the Malaysian economy. There is a continuous need to generate revenue and employment from this sector, and to improve the rural standard of living as part of the declared policy of poverty eradication. Great emphasis, therefore, is given under the Fourth Malaysia Plan (1981-1985) to development programmes aimed at increasing production and income of cultivators, livestock-holders and fishermen through raising productivity levels, expanding employment opportunities and modernising agricultural practices. Towards this objective over 21 percent of the M$42.8 billion allocated for public development expenditure during this planned period has been set aside for agriculture and rural development.