In 2007-08, South-east Asia was hit by an unprecedented shortage of staple food products. A number of factors have been blamed for the disaster, including droughts, a surge in costs, low stockpiles, increasing demand from growing middle-class populations and speculation over commodity prices. In response, the governments of many countries in the region embarked on efforts to ensure that they would not be caught out by food shortages again. Brunei Darussalam was no exception to this, with the Sultanate moving quickly to prioritise food security and increased self-sufficiency as key aims of its economic development plans. Since then, agriculture and fisheries, agri-business, aquaculture, and food research and development (R&D) have all been prioritised, with impressive results in some subsectors.
At the same time, Brunei Darussalam has also been working to make a name for itself globally as a key halal food centre, bringing a rigorous examination and certification programme to the international halal table. This move has won it high praise around the world for improving food quality, from Muslims and non-Muslims alike. Now, with the region seriously impacted by an El Nino event, while economic growth has hit the headwinds of low oil and gas prices, the sector faces some strong new challenges. The introduction of the ASEAN Economic Community (AEC) in 2016 will see more open markets throughout the 10-nation block, yet will also create more competition for local farmers and fishermen, as well as greater opportunities for them to export. There is also a trend of moving towards higher value-added processes, specialisation and mechanisation throughout the sector, a move that may well leave Brunei Darussalam in a better position to cope with any crises ahead.
Climate
Brunei Darussalam’s tropical climate gives it high rainfall and temperatures for most of the year, divided in intensity by the north-east and south-east monsoons. The first of these runs from December to March, and the second from June to October. The heaviest periods for rain are September to January and May to July, with March and April generally drought months. The country has a coastline of some 161 km, with an exclusive economic zone and fishing rights stretching out 200 km from this, far into the South China Sea. There are also four major rivers and their tributaries; water resources and seasonal rains have been major determinants of the agriculture and fisheries industries’ fortunes for many centuries.
Sector Profile
The last five years have seen significant progress in agricultural development, with gross agricultural output increasing from BN$230m ($163.6) in 2010 to BN$366 ($260.4m) in 2015. Agricultural output is expected to further increase to BN$900m ($640.4m) in 2020, driven by major segments such as broiler, vegetables, cut flowers and processing or value-added agro-based industry. At the same time, Brunei Darussalam imported some BN$610.3m ($434.2m) in food in 2015, along with beverages and tobacco at BN$68.7m ($48.9m), and BN$17.4m ($12.4m) in animal and vegetable oils. Total exports of these items stood at BN$9.7m ($6.9m). Thus it can be seen that almost all of Brunei Darussalam’s domestic production in agriculture, fisheries and forestry is consumed domestically, yet even so, most food and beverage products are still imported.
The small size of the sector is largely the result of natural constraints. The whole country is approximately 577,000 ha in size, with only 7193 ha in use for agriculture in 2013, the most recent year for which figures were available at the time of writing. This divided up into 4429 ha for crops and 2764 ha for livestock. The agricultural labour force that year, including those working in food processing, amounted to 13,887 people, 9540 of them working in crops and 2607 in livestock. This was out of a total population of some 406,200. More recent 2014 figures show that out of a population of 411,900, and a total labour force of 203,600, the percentage working in the agriculture, forestry and fisheries sector was around 0.6%. Given these constraints, Brunei Darussalam has adopted a policy of concentrating its resources on particular crops, with the aim of becoming more self-sufficient in one particular product – rice.
Staple Goods & Subsidies
The principle government authority in the sector is the Department of Agriculture and Agri-Food (DAA), which comes under the Ministry of Primary Resources and Tourism (MPRT). The DAA in turn breaks down into divisions for livestock, crops, agricultural engineering, agricultural extension, agri-foods and policy. Also under the MPRT is the Department of Fisheries, which has responsibility for overseeing management, marketing, research, enforcement, conservation and development of the fishing industry (see analysis). Likewise the Department of Forestry, which administers the nation’s forests, also comes under the MPRT.
Another important body is the Supply and State Stores Department (SSSD), under the Ministry of Finance. This sets the prices of two staple commodities – rice and sugar. Cooking oil, plain flour, and condensed and evaporated milk also have maximum prices set, amongst a total of 20 price-controlled commodities. The SSSD also imports and distributes rice and sugar, the former commodity mainly from Thailand, via the Brusiam Food Alliance. The SSSD then sells this to a series of designated local outlets, which then sell the rice on to the consumer.
Moreover, the DAA’s Agriculture and Agri-food Incentive Scheme (SIPA) provides farmers and agri-food producers with a range of subsidised inputs. These include paddy seeds, fertilisers, food packaging materials and chemical insecticides, all sold at a 50% subsidy. When farmers have produced crops from these inputs, they may also qualify for SIPA’s Paddy Guarantee Price Purchasing Scheme, under which the DAA buys rice from local producers at a fixed price that is higher than the price at which the same rice is then sold to consumers. To qualify farmers must only grow local rice varieties recommended by the DAA. This arrangement acts as a major incentive for farmers to plant local rice strains that otherwise would be uneconomical compared to cheaper imports.
In addition, to help farmers cultivate crops more efficiently, the DAA established the Rice Farmer Field School in 2010, which gives hands-on help in crop management at the padi farm itself.
Local Strains
Incentives to plant local strains of rice have been an important part of ongoing schemes in the Sultanate to increase rice self-sufficiency. These form a key part of Wawasan Brunei 2035, the national long-term development plan, which was being drafted at the same time as the 2007-08 food security crisis. Divided into a series of shorter-term programmes, the self-sufficiency drive is also a pillar of the 10th Brunei National Development Plan (10NDP), which runs to 2017. These plans set an ambitious target of 60% rice self-sufficiency by 2015, a target that the country has missed by a considerable margin. According to the minister of primary resources and tourism, Dato Ali Apong, the April 2015 target date saw rice self sufficiency at just 4%.
The minister blamed the shortfall on a lack of irrigation and a major outbreak of crop diseases. Indeed, rice yields have been in long-term decline in Brunei Darussalam. In 1975 yield peaked, at 2.9 tonnes per ha, with output falling to its lowest recorded point, 0.51 tonnes per ha, in 2009. Meanwhile, regional competitors such as Vietnam have seen their yields steadily increase, with current levels there averaging 5-6 tonnes per hectare. Neighbouring Kalimantan, which has fairly similar growing conditions, also manages to produce 2.8-3.2 tonnes per ha.
There is clearly room for improvement. The DAA has therefore been looking at developing some new, high-yield rice strains. One promising variety is Brunei Darussalam Rice 5 (BDR5), a hybrid of Laila and beras pusu (a local strain), which can be planted twice a year. It is also highly drought tolerant and can potentially produce 3-5 tonnes per hectare. Another variety being field trialled is MRQ76, a Malaysian strain that also gives higher yields. In contrast, the current, popular, local Laila variety, which the Sultan renamed himself in 2009, quickly dries up in drought conditions and usually takes around 115 days to harvest, making it difficult to harvest more than once a year.
More effort is also being made to boost the mechanisation of rice production, also in an attempt to boost yields. Farmers were encouraged to use planting machines under Wawasan Brunei 2035 and the 10NDP, with a system of subsidies introduced to reduce the cost of purchase. Yet such machines have not always been appropriate for the conditions; soil in some regions has proved unstable for heavy machinery. Soil type is also the source of another challenge for padi farmers, namely acidity. The head of Koperasi Setiakawan, one of the Sultanate’s more successful cooperative farms, recently told local media that much of Brunei Darussalam’s soil is too acidic for mass cultivation of rice without greater inputs of lime-based fertilisers. These would have to be applied over some time in order to make the soil more productive. The government does issue a 50% subsidy for fertilisers, although sometimes supply shortages need to be filled with purchases of imported varieties from the open market. Yet some progress has been made, with the DAA able to announce in March 2016 that production had risen 44% in 2015, year-on-year. The new total was 1983 tonnes, up from 1382 tonnes in 2014 and 1237 tonnes in 2013. The DAA attributed the increase to a combination of better weather and better strains, with both BDR5 and MRQ76 being tested. The effect of the latter was most evident in Temburong District, where output rose from 300 tonnes to 5000 tonnes, while the area under cultivation remained the same at 238 ha. Brunei-Muara District saw its planted area rise from 270 ha to 378 ha.
A further significant find in the assessment of the 2015 rice harvest was that there had also been a decrease in the number of padi farmers, from 891 to 835, between 2014-15. This may point to an increase in farm size and better mechanisation, with productivity per farmer rising from 1.55 tonnes per farmer to 2.37 tonnes per farmer over the 12 months.
Irrigation Boost
Another key to raising the output of rice and other crops is the Sultanate’s irrigation network. High-yield rice often requires a great deal of water. Aware of this issue, Brunei Darussalam embarked on a National Irrigation Plan in 2009 to undertake a comprehensive upgrade of the Sultanate’s irrigation systems, many of which had remained unchanged since the 1980s. The DAA is promoting the Imang Dam expansion, which will see the capacity of a key reservoir in Mukim Pengkalan Batu grow by 10%. The dam currently feeds padi farms in the Brunei-Muara District, with the increase in available water potentially enabling farmers there to plant two rice crops a year of higher-yield varieties.
As part of the same three-project irrigation development scheme, nearby holding ponds in Limau Manis and Bebuloh will get a boost from the Irrigation System Capacity Expansion plan, while the Limpaki Seed Production Irrigation Pipeline should also boost output in this area. These three projects taken together will cost some BN$9m ($6.4m).
Fruits Of The Land
Taking into consideration some other agricultural commodities, Brunei Darussalam has been a lot more successful in its drive to self-sufficiency. By late 2014 the then-Ministry of Industry and Primary Resources – the MPRT’s predecessor – was able to announce that the Sultanate had achieved near-self sufficiency in the production of chickens and eggs, with 80% of its seafood products and tropical vegetables also originating domestically. In terms of tropical fruit, the figure was around 50%.
The most recent detailed figures from the DAA, for 2013, show local production in the broiler industry already at 97.1%, with 23,062 tonnes produced and 23,762 tonnes consumed. In eggs, total consumption that year was 132.38m, while production reached 127.98m, giving a self-sufficiency ratio of 96.7%. The broiler segment is expected to grow, with estimated gross output value of BN$300m ($213.5m) in 2020. The focus is to promote private sector investment venturing into large-scale, modern and high-technology broiler production systems. With the domestic market near to saturation, the aim is to increase output to serve regional and international markets.
Vegetables, meanwhile, saw 12,774 tonnes produced and 21,543 tonnes consumed, giving a ratio of 59.3%, but when only tropical vegetables are considered, the ratio rises to 81.7%. In fruits, the 2013 figures showed local production accounting for 21% of consumption, or 28.9% of tropical fruit consumption, with the totals being 18,335 tonnes of all types of fruits consumed and 3855 tonnes produced. This segment is also set to grow, with emphasis given to promoting private sector investment in high-technology vegetable production systems such as vertical farming and LED lighting techniques. Segment revenues are expected to grow to BN$150m ($106.7m) by 2020, up from BN$34m ($24.2m) in 2015.
In terms of floriculture, the Sultanate aims to increase the commercialisation of the segment. The target is to increase output and gross value to reach BN$40m ($28.5m) in 2020, compared to just BN$200,000 ($142,000) in 2015. With growing demand for ornamental plants and floriculture, the focus will be on fostering greater private sector involvement the use of high-tech greenhouses.
Halal
Brunei Darussalam has made a concerted effort in recent years to promote itself as a centre for the fast-growing global halal industry. The Sultanate is doing this via a major investment in its halal certification scheme, Brunei Halal (see Industry chapter). While other countries also have such schemes, certification by Brunei Darussalam implies a much tougher series of standards, both in terms of religious observance, and in terms of overall food quality. Much of the throughput of the halal segment is thus likely to be in processed foods, a sector that the Sultanate has been keen to encourage in recent times. This dovetails with its plans to increase the value added in agricultural production, boosting the sector’s contribution to GDP and helping diversify the economy away from reliance on oil and gas, a major aim of Wawasan Brunei 2035. Agri-business is clearly the future direction the government would like to see the country take. Increased agri-technology is closely associated with this, too, and is also the rationale behind the Halal Industry Innovation Centre and the Halal Science Centre at the Brunei Bio-Innovation Corridor (BIC). Taking advantage of the wide range of free trade agreements, international companies can use the BIC and the Sultanate as a gateway to a potentially enormous and lucrative halal market.
Outlook
While the Sultanate continues to try to boost its food self-sufficiency, it is also likely to encounter some contrary market forces, with agreements such as the AEC working to try and remove all barriers to imports and exports, as well as reducing subsidies and government supports. That said, the clear focus by the authorities on boosting production is a promising sign for the future of the sector.
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