Sabah: Agriculture earmarked for expansion and innovation

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Efforts to broaden the role played by agriculture in Sabah’s economy are gathering strength as the state drives forward a raft of ambitious programmes ranging from encouraging agro-tourism to addressing food security concerns.

Agriculture has traditionally formed the backbone of Sabah’s economy, employing approximately 33% of the population and contributing around 23% to GDP. The government’s plans to expand the sector, which remains dominated by palm oil, rubber and cocoa, have been largely welcomed, although critics warn of the need to keep the spotlight on education and research and development, which they say will prove crucial in driving innovation and boosting productivity.

In December, the director of the Malaysia Productivity Corporation, Burhanuddin Saidin, said that Sabah’s fledgling agro-tourism industry could be instrumental in boosting both the state’s productivity levels and its appeal as a leisure destination.

He said goat-rearing, mushroom-growing and bee-farming projects already under development, alongside state initiatives such as the Sabah Agriculture Park, which is home to rare wild orchid and fruit species, highlighted the industry’s potential. “Agro-tourism ... has ... great potential to generate lucrative income to Sabah and continuous effort is being undertaken by the Ministry of Agriculture and Food Industry to further enhance the state’s agro-tourism,” he stated at the Malaysia International Agriculture, Horticulture and Agro Tourism Exhibition.

Some of the RM463.01m ($152.86m) allocated to agriculture in the 2013 budget will spearhead Sabah’s efforts to increase its food supply, including a joint initiative between the state and federal government to transform Kota Belud into a rice granary. A total of 800 ha have been allocated to the Kota Belud Padi Estate “rice bowl” project, which is being rolled out following an agreement signed in November between the Ministry of Agriculture and Food Industry and the Kota Belud Farmers’ Organisation. A range of innovative techniques will be introduced under the initiative, including double-cropping and flood mitigation, together with a tertiary level water management system.

The project falls under the umbrella of the broader National Key Economic Area initiative, which aims to increase the average production of rice grain for each farmer to 8.5 metric tonnes per ha by 2020. Hopes are high that the “rice bowl” initiative, which also offers incentives valued at RM1.6m ($530,000), could produce its first harvests in May 2013.

Improving food security through agri-food initiatives is a key aim of Sabah’s government. The state has become self sufficient in chicken products, and intensive farming techniques have helped Sabah grow enough fruit and vegetables each to achieve 94% and 89% self-sufficiency, respectively, in 2012. However, around 70% of rice and meat consumed in 2011 were imported.

In December, Prime Minister Datuk Seri Najib Tun Razak expressed concern at the low level of rice production in rural areas, saying that more research and development was needed to help the local industry innovate, increase production and push primary commodities up the value chain.

His views echoed earlier comments made by the Minister of Agriculture and Food Industry and Deputy Chief Minister Datuk Yahya Hussin in November. “The transformation of [the agriculture sector] has to be further enhanced, from the planting stage to the marketing of agriculture produce, through programmes to produce more agro-entrepreneurs, encourage good agriculture practices and upgrading of infrastructure,” the minister said.

In December, the minister also highlighted the importance of ensuring that trainees based in agricultural training centres were provided with the necessary facilities, equipment and learning environment. “In line with the changing times and as part of future training programmes, the application of mechanisation and modern technology is very important to agricultural entrepreneurs to help them face the many challenges and obstacles in a competitive world,” he told media.

While initiatives aimed at boosting food productivity are gaining pace, concerns have been raised that the dominant palm oil industry is limiting agri-food development. Yahya acknowledged in December that 300,000 ha of land suitable for paddy was already covered with oil palm, leaving just 35,000 ha for food crops.

In the same month, former Sabah chief minister Yong Teck Lee suggested the state could buy all the oil palm fruits and initiate bio-diesel production on the back of falling palm oil prices. “This can be the win-win solution for both parties,” he said. Palm oil fruits are currently trading at RM360 ($118.9)-RM380 ($125.5) per metric tonne, down from a previous high of between RM700 ($231.09) and RM800 ($264.11).

With palm oil prices falling, Sabah’s move to diversify its agricultural dependence away from the commodity looks to be timely. However, its efforts to cultivate new segments of the industry that rely on innovation have highlighted the importance of developing human resources, while also encouraging greater private sector participation.

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