16 NKEA Malaysian New economic Model Agriculture

NKEA : Agriculture

Palm Oil Rubber  Agriculture

 Agenda Background of NKEA Agriculture EPPs Brief Overview of EPPs NKEA Agriculture Reflected in Minister KPI 2011 (MKPI 2011)

 Agenda Background of NKEA Agriculture EPPs Brief Overview of EPPs NKEA Agriculture Reflected in Minister KPI 2011 (MKPI 2011)

DEFINATION •

GTP -

Government Transformation Programme (Program Transformasi Kerajaan) Kerajaan)

•

ETP -

Economic Transformation Programme (Program Tranformasi Ekonomi)

•

NKEA -

National Key Economic Area (Bidang Ekonomi Utama Negara) Negara)

•

EPP -

Entry Point Project (Projek Keutamaan Permulaan) Permulaan)

•

BO -

Business Opportunity (Peluang Perniagaan) Perniagaan)

PM introduced nation status

4 strategic thrusts

People First

towards developed

Performance Now

1 3

2

• 12 NKEAs

• 6 NKRAs

• 131 EPPs • 60 Biz Opps

• 29 MKRAs

4

10th & 11th Malaysia Plan

rich country, for everyone & for a long time Making us a

High-Income

Enables all communities to benefit from the wealth of  the country

Target USD 15,000 GNI per capita by 2020

Quality of Life

Inclusiveness

Sustainability

Meets present needs without compromising future generations

12 National Key Economic Areas (NKEAs) Oil, Oil, Gas Gas & & Energy Energy

Financial Financial Services Services Greater  Greater  KL/Klang KL/Klang Valley Valley

Education Education

Tourism Tourism

11 Economic Sectors Wholesale Wholesale & & Retail Retail

+

Business Business Services Services

Greater KL/ Klang Valley Electrical Electrical & Electronics & Electronics

Agriculture Agriculture Comms Comms Content Content & & Infra Infra

Healthcare Healthcare Palm Palm Oil Oil

NKEA Agriculture focused on transforming the Agriculture industry into one with more focus on Agri-business Expanding participation in the regional value chain Capitalising on Malaysia’s Competitive Edge Trapping Premium Markets Ensuring Food Security

16 EPPs

+ 11 Business Opportunities

Additional GNI: RM21.4 billion Jobs created: 74,000

Executive Summary Case for  Change

• Increasing global demand

• Global demand for products that are unique to Malaysia is rapidly increasing, with annual growth rates of between 8.5 % for aquaculture products and up to 10.5% for herbal products and edible birds nests

• Current system inefficient

• Industry currently dominated by inefficient, small scale farmers , often requiring government intervention (e.g. subsidies and price support) to support their income

• Lack of compliance to global food and safety standards, impeding market access • Existence of success models • We already have domestic success models that can be replicated, e.g. integrated, that can be replicated

• Double our national income Aspirations

Themes

commercial scale and market centric models for horticulture (MAFC) and aquaculture (Blue Arch), and estate style seaweed farming (Uni Malaysia Sabah)

• From USD7.5 billion in 2009 to USD16.6 billion by 2020

from agriculture

• Create 74,000 new jobs

• In predominantly rural areas and in East Malaysia where poverty levels are higher 

• Increase farmers income

• By 2-4X, and decrease income gap between urban and rural population

• Capitalising on Malaysia’s

• Unlocking value from our biodiversity, where further packaging and downstream

competitive advantage

• Tapping premium markets

application can increase revenue up to 10x versus raw goods

• Expanding the production of premium grade fruits and vegetables, certified shrimp and premium processed food to fetch up to 5x premium in overseas markets

• Ensuring food security are aligned with GNI objectives

• Increasing productivity of paddy farming and cattle raising, thereby increasing national self sufficiency and saving up to RM 1 billion in subsidies

• Expanding participation in the • Providing support services such as agriculture biotech to the region, acquiring foreign regional value chain

farming operations and undertaking contract farming overseas

Initiatives were identified to leverage Malaysia’s strengths and capitalise on global market trends Theme

Capitalise competitive advantage

Description

Entry Point Projects

• Favourable for swiftlet ranching, seaweed farming, crop production etc due to climate conditions and geographical position

• Swiftlet Nests

• Unlock value from biodiversity by accelerating commercialisation of botanical drugs

• • • •

Mini Estate Seaweed Integrated Cage Farming High Value Herbal Products Integration of Cattle into Palm Oil

• Premium Market for Fruits and Tapping premium markets

• Capitalising on global demand and trends in specific agriculture and aquaculture products e.g.:  – High quality fruits and vegetables for export  – Premium processed food

Vegetables

• Replication of i-ZAQs • Fragrant Rice Variety for Non-irrigated  Areas

• Food Park / Incubator 

• Strengthen productivity of paddy Alignment of food security objective with increasing GNI

Participation in regional agriculture value chain

• Increasing capacity for production of food crops to meet food security objectives • Extracting the most value from production through commercialisiation and reduce subsidy dependency

• Undertaking contract farming activities overseas and providing regional services in niches such as molecular marker discovery • Breeding and agriculture logistics

farming in MADA

• Strengthen productivity of paddy farming in other irrigated areas

• Dairy Cluster  • Cattle Feedlot

• Seed Industry Development • Overseas Cattle JV Acquisition • FDI in Agriculture Biotech

NKEA Agriculture Entry Point Projects EPP #

EPP Title

Project Owner

 

1

High Value Herbal Products

Bhg. Industri Tanaman, Ternakan dan Perikanan

2

EBN Swiftlet Farming

Jab. Perkhidmatan Veterinar  

3

Seaweed Industry

Jab. Perikanan

4

Integrated Cage Farming

Jab. Perikanan

5

Further Integration in Oil Palm

Jab. Perkhidmatan Veterinar  

6

Replication of IZAQ

Jab. Perikanan

7

Premium Market for Fruits and Vegetables

Jab. Pertanian

8

Food Park

Bhg. Industri Asas Tani

9

Fragrant Rice Variety

MARDI

10

Strengthen Productivity of Paddy Farming in MADA

MADA

11

Strengthen Productivity of Paddy Farming in Other Granaries

Bhg. Industri Padi dan Beras

12

Expansion of Feedlotting

Jab. Perkhidmatan Veterinar  

13

Dairy Cluster

Jab. Perkhidmatan Veterinar  

14

Seed Industry Development

Bhg. Khidmat Sokongan dan Pembangunan Industri

15

Participations of MNC

Bhg. Khidmat Sokongan dan Pembangunan Industri

16

Overseas JV/Acquisition

Jab Perkhidmatan Haiwan

A total of RM 18.7 billion is required to implement the EPPs Total RM juta

Investment requirement by EPP RM juta Replication of IZAQ

Premium market for fruits and vegetables

2,666

0.39

1,943

0.52

1,830

0.75

64

1,773

2.56

169

1,422

1.10

839

2.64

93

720

1.92

0

576

1.54

0

525

2.68

3,251

0.41

0 234

0

237

High Value Herbal Products Integrated Cage Aquaculture Farming Food Park / Incubator  Seaweed Farming in Sabah Others (6 EPPs)

GNI/ Investment 0.40

Paddy farming in other granaries EBN Swiflet Farming

Private funding

3,152

Paddy farming in MADA

Participations of MNCs

Public funding

Target GNI of RM 21.44 billion will be achieved by implementing 16 Entry Point Projects (EPPs) and 11 Business Opportunities ▪

2020 GNI contribution from top 10 EPPs (RM million)

RM 18 billion

▪

The top 10 EPPs add up to 93% of the incremental GNI The remaining EPPs have smaller GNI impact, but are important from:

 – A food security perspective (e.g. beef  and milk selfsufficiency) EBN Swiflet Farming

High Premium Value FFV Herbal Products

Seaweed Integrated Paddy ReplicaCage Farming Farming tion of  in Sabah Aquaculture in other  iZAQ Sistem Granaries

Paddy Farming in MADA

Biotech MNCs

Food Park

 – An inclusiveness

Others *

perspective (e.g. new rice variety to improve yield and farmers’ incomes in nonirrigated areas)

* Seed Industry Development (RM 474 mil); Dairy Cluster (RM 326 mil); Cattle Feedlot (RM 183 mil); Cattle Integration with Oil Palm (RM 150 mil); Cattle overseas JV (RM 115 mil); Fragrant Rice (RM 99 mil)

2020 GNI contribution from top 10 Biz Ops (RM million)

RM 3.4 billion

Premium Snack

Ornamental

Herbal Product

Aqua Feed

Nutra from

FDI for  Tropi-

Free Range

Mushroom

SFI Facilities

Aqua Export

Readyto-eat

▪

The GNIs generated from business opportunities are mostly below USD 0.26 billion, as there is a lot of  element of uncertainties which calls for  conservative assumptions to be used

New jobs will be created and income levels will be enhanced through higher  productivity and adoption of better standards Additional new employment by EPPs and BOs ‘000 People Total

-25

11

3

Average monthly income RM per month

21

18

36

Avg. monthly income of paddy farmers in Muda area

11

5 1

4.3 x

6

1,400

35 6

99

12 21 2

2009: Individual owner operators on 2ha farms

2020: Operate 10ha farms on profit sharing basis

Avg. monthly income of papaya farmers

1 9

6,000

2

4x

-25

4,100

Paddy

Horti culture

Herbs

Swiflets

Live stock

Aqua culture

Biotech

Total

1,000

2009

2020

Avg. monthly income of herbal out growers

Average monthly income RM per month

3x < RM1k

RM 1-4k

>RM 4k

2% 4% 10% 50%

48%

28%

72%

44%

56%

46%

54% 96%

89%

4,100

1,000

2009: Individual out growers on 60 years old • Idle land is already being managed on an outsourced basis (e.g., Ladang Merdeka)

• LPP, DID and DoA Different setup

• 35% of farmers’ income are from non-farming

• In some areas e.g. IADAs

/ non-paddy sources

eg Barat Laut, the 3 functions are co-located but in others e.g. KETARA, the functions are run separately

• KADA is set up similar to MADA, which is a statutory body with relative autonomy Similar agency • Functions of KADA/MADA cover those setup typically performed by 3 other agencies (LPP, DID and DoA ) i.e. supervision of PPKs, irrigation & water management, extension services

• KADA covers an area of 32,167 ha Large area

coordinate the functions required to support the granary

• Less than 30,000 ha with Smaller areas

some granaries i.e. Kemasin Semerak and KETARA approximately 5,000 ha

EPP 12 :

Project Details

Expansion of  Feedlotting

•

Establishment of 300 satellite farms to support the

current anchor company, National Feedlot Corporation and other potential anchors for feedlotting operations.

•  Anchor company will oversee the operations of the entire value chain while focusing on the integrated and consolidated downstream processing.

• Downstream operations will be improved by enforcing GNI Impact RM

Jobs Created

182.4

2,000

certification of abattoir, cold-chain delivery of chilled cuts, promoting market awareness of buffalo meat vs beef, and developing downstream (beef byproducts).

million

Scope of Public Funding Development Expenditure

Operational Expenditure

2011 Allocation

2012 Allocation

-

-

-

-

Through increased supply from integration, dairy operations and anchor  companies with overseas stakes, feedlotting activity can be expanded Integrated Downstream Operations

 Anchor X has own farm overseas

Cattle from oil palm

Cattle from dairy farms

• Needs to be upgraded and/or privatized

• Certified & Halal meat Abattoirs

processing and slaughter 

• 0% Wastage (capitalize

Satellite Farmers

on all cattle parts)

DVS land

Anchor / NFC

Independent Small / medium feedlotters

Plantation companies produce fodder  Feed mills

• Premium packaging with Premium packaging and cold chain

grading to educate consumers

• Cold chain delivery of  chilled cuts

• Market awareness & Anchor X

NFC

25% ssl Market 40% ssl

Consolidated & Integrated Downstream

differentiation between frozen buffalo meat and fresh beef 

• Development of products for beef byproducts (Pet foods, leather, gelatin, food processing)

KPI 2011 for EPP #12 KPIs

Target 2011

1. Total number of heads

19,800

2. Total kg of beef produced (mil MT)

2,800 MT

3. Ratio of domestic production vs total consumption

1:3.3 (51,161 MT : 170,475 MT)

Project Details

EPP 13 :

Dairy Cluster 

GNI Impact RM

Jobs Created

326

• Establishment of dairy clusters led by anchor  companies to produce milk on a large-scale basis and oversee the operations from production to marketing. • Upgrading of the existing cold-chain milk facilities to ensure the quality of milk from farm to market is maintained • Identified anchor players includes Dutch Lady Milk Industries, Evergreen Livestock, and Fonterra.

800

million

Scope of Public Funding Development Expenditure i.Purchase of female animals to kickstart operations ii.Upgrading of farms for contract farmers under anchor  companies iii.Upgrading of milk processing facility Operational Expenditure

2011 Allocation

2012 Allocation

RM 32.0 million

RM 32.0 million

-

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