Strategy For Moving Forward
The agricultural sector will be the main focus of the Northern Corridor initiative, and transformation of this sector is a key objective under the Blueprint. The Northern Corridor will be made into a modern “Food Zone” for Malaysia. Key outcomes targeted for the Northern Corridor’s agricultural sector are as follows:
Increasing the agricultural sector’s contribution to the Northern Corridor’s GDP
Under the Blueprint, it is targeted that the growth of the agricultural sector will be accelerated, increasing its share of the region’s GDP from 12% currently to 15% in 2012.
Increasing exports of agricultural products
Both upstream and downstream agricultural activities will be promoted, and it is planned that exports of agricultural products including fresh and processed fruit, and meat products will increase. With large-scale farming and improvements in productivity, the excess from domestic consumption will enable the NCER to export around RM48 billion worth of agricultural produce by 2012.
Increasing rural income levels
Increases in rural income levels will be achieved through programmes that diversify sources of income from existing land, improve productivity of land and improve agriculture value-add.
Three strategic thrusts will be implemented to achieve these objectives:
Promoting commercial farming in partnership with local communities
To address issues regarding scale, technology adoption and marketing, the Northern Corridor initiative will encourage corporations to invest in the agricultural sector in both upstream and downstream areas. Whilst many agricultural projects in the Region can be economically viable, it has to be emphasised that the projects need to be done by working with the in situ community. This is because the bulk of the land that is available for agricultural use is already privately owned by the community. Most undeveloped state government-owned land is classified as environmentally sensitive and is either already gazetted or in the process of being gazetted as protected areas.
In view of the need to get corporations to work with the local community, a special-purpose vehicle will be set up to amalgamate land management, and professionally farm the land either in-house or on an outsourced model. In addition, private sector firms will be provided with financial incentives to undertake similar efforts to organise economically-sized lots.
The financial incentives will promote a number of models for partnership between large corporations and the community. For example, for existing smallholders with land, the corporations can help organise them, by providing seeds for the variety of the crop in demand by the market, synchronising planting and harvesting activities, distributing fertiliser in bulk and disseminating agronomy best practices. Large corporations must work together with the community to ensure that their produce meets the required standards to be marketable, and will help with the packaging and labelling that is necessary to meet customers’ needs. Prospective agro-preneurs without land can work together with large corporations on a contract farming model.
Crop specialisation
Besides depending on paddy as the main agricultural produce for the Northern Corridor, new agricultural produce with high economic potential will also be promoted. The farming concept of “one district, one product” will be re-introduced, to ensure sufficient scale of operations. For example, in the planting of corn, a contiguous area of around 60,000 hectares is required to support one canning line in a factory. Crop specialisation through zoning is therefore important to ensure economic sustainability not only in upstream activities, but also downstream collection, processing and distribution.
The identification of specific crops to be farmed or agricultural activities to be performed will ultimately be left to the private sector, which would need to conduct proper technical and commercial feasibility studies. However, a number of areas with high potential have been identified, such as livestock farming on a feedlot basis, aquaculture, coastline fish-farming and commercial-scale fishing, as well as the farming of fruit, vegetables and herbs such as mangoes, dragon-fruit and ginger. Entrepreneurs will be encouraged to invest in these areas through the provision of assistance such as skills development, access to good seeds and financial incentives
Additionally, the Northern Corridor implementation organisation will assist in creating a strong regional brand for these high potential produce. Quality and consistency will be controlled through seeds and standards bodies, while a professional marketing company will be appointed to promote the regional brand and what it stands for in domestic and overseas markets. This will significantly improve marketability of the produce.
Introducing world-class agricultural technology
The pace of R&D will be stepped up and be made more market-driven through a private sector-led Seeds R&D Centre. Leading agricultural practices and marked improvements in planting materials will be developed and disseminated in the NCER to boost efficiency, productivity and enhance the quality of agricultural produce. This includes better seeds for all major crops that will be promoted in the Northern Corridor. An example would be using biotechnology to develop paddy seeds that have roots and stems suitable for the soil in the area, improved yield and higher resistance to diseases and pests.
Additionally, compliance with international standards such as GAP and HACCP will be promoted and higher-end downstream research, e.g. discovery of active ingredients, will selectively be pursued.