THE NEED FOR AGRICULTURAL SECTOR IN AGRICULTURAL ECONOMICS
Agriculture is an important sector to the country's economical development. It was one of the highlighted issues during Tun Abdullah Ahmad Badawi's as Malaysia's Prime Minister. Abdullah firmly believed that industry can create riches and reduce poverty particularly among those from rural areas. Among the major thrusts of the Malaysian economical development since her Independence in 1957 has been and continues to be the rural development programmes. The rural sector performs a pivotal role in the country's economical growth, interpersonal and politics development. The Malaysian current economic climate depended on the rural sector in the first development level for agricultural source and output and therefore the country's export revenue and progress in the 1960s and 1970s. Agriculture sector can be generalized into two categories - professional commodities and food sub-sector. Industrial commodities under Ministry of Primary Sectors (KPU) provision is dependable in making sure high quality production of pepper, palm oil, rubber, cocoa and lumber and timber. On another be aware, Ministry of Agriculture and Agro-based Industry (MOA) must oversee crop creation, livestock and fisheries activities. Like any other producing economies, the growing monetary importance of the manufacturing sector implies that the rural sector has satisfied its role as the provider of labour, land and capital required for industrial.
2. 0 THE IMPORTANCE OF ECONOMIC IN AGRICULTURAL
The agricultural sector has added to the growth and major contributors to national income and export earnings. The agricultural sector at first derived from increase development of livestock, fisheries and other miscellaneous crops. The NAP provided for a thorough and coordinated long-term insurance plan for a highly effective development of the agricultural sector. The NAP called for agricultural-industrial linkage through the broadened development of agro-based establishments, mainly in handling, storage area and handling of agricultural goods to increase their value-added before export. There exists some of significance of monetary in agricultural sector:
2. 1 Diversifying and shielding the economy
Agricultural is thought a vital to the economy of Malaysia. It play a role in diversifying and shielding the current economic climate from external impact. The upsurge in cash flow of major commodities, particularly palm oil as food commodities, permit sector to retain its labor force and tolerate the economical downturn. There also important in especially in diversification to increase the overall economy activity in Malaysia. This is a few of example that will help for increasing the market such as:
- Integration of cattle in palm oil plantation
- Mixed farming
- Processing activities
- Development of rural area
We will bring development to rural areas by promoting the agricultural sector by minimizing imbalance in urban-rural development especially in the less developed states. Rural development generally identifies the procedure of improving the quality of life and monetary well-being of people surviving in relatively isolated and sparsely populated areas. Rural development has traditionally centred on the exploitation of land-intensive natural resources such as agriculture and forestry. However, changes in global creation systems and increased urbanization have improved the type of rural areas. Progressively more tourism, niche market manufacturers, and recreation have replaced source removal and agriculture as dominating economic drivers. The necessity for rural neighborhoods to plan development from a wider point of view has generated more focus on a broad selection of development goals rather than only creating motivation for agricultural or tool based businesses
- Increase food production
The sector contributed not only as a supplier of raw materials to the source of information based sectors, but also in term of food production. Food production capacity is faced with an ever-growing variety of challenges, including a global population expected to grow to almost 9 billion by 2050 and a dropping proportion of arable land to human population. Based on the Food and Agriculture Firm of the United Nations or FAO. These crop loss would be doubled if existing pesticide uses were left behind, significantly nurturing food prices. Even after harvest, plants are subject to harm by pests or diseases. Insects, rodents or molds could harm grains. Furthermore to increasing crop produces, crop safeguard products found in stored products can also lengthen the practical life of produce, prevent huge post-harvest deficits from pests and diseases, and protect food so that it is safe to eat. The crop coverage industry's primary target is to enable farmers to grow an abundant supply of food in a safe manner and stop costs from increasing. Food production processes reap the benefits of continual developments in agricultural technologies and procedures; in fact, a population now nearly twice as large has more food available per capita than 40 years ago.
- Improve balance of trade
The food transfer bill has been a long status problem in Malaysia. The commercial balance or net export, is the difference between the monetary value of exports and imports of output in an market over a certain period, measured in the money of that overall economy. It is the romantic relationship between a nation's imports and exports. A good balance is actually a trade surplus if it involves exporting more than is brought in; a negative balance is known as a trade deficit or, informally, a trade difference. The total amount of trade may also be divided into a goods and a services balance. There exists some factor that improving balance of trade in market Malaysia:
- The cost of development such as land, labour, capital, fees and incentives in the exporting overall economy.
- The cost and availability of raw materials, intermediate goods and other inputs
- Exchange rate movements
- Multilateral, bilateral and unilateral taxes or limitations on trade
- Non-tariff barriers such as environmental, health or safeness standards
- The option of adequate foreign exchange with which to pay for imports.
2. 5 Economic in Malaysia restructuring
The Second Malaysia Plan stepped up authorities involvement in the economy, with the primary goal of increasing Malay financial interests, especially in the areas of developing and agricultural. To avoid directly hurting Chinese economic interests, the program focused on huge economic progress, with the purpose of expanding both Malay and non-Malay shares of the overall economy in absolute terms, while increasing the Malay show in relative terms as well. THE NEXT Malaysia Plan hoped to attain greater decrease in poverty and boost the involvement of the Malays in the private sector by imposing certain restrictions on private firms that would advantage Malay job and economic possession.
3. 0 Future Potential customers and Challenges
Internally, the agriculture sector proceeds to face inefficiencies arising from structural flaws such as land fragmentation, labour lack and increasing cost of inputs. As a consequence, productivity, produce and success from smallholdings continue steadily to lag behind plantations. Paddy farming continues to face long-term inefficiencies arising from the Government's insurance plan to continue guaranteed minimal price for paddy and structural defects. As a result of government intervention in cost setting and circulation, structural defects have grown to be institutionalized and tolerant to change. It becomes even more difficult to effect a big change now because subsidies to paddy farmers have grown to be politicized as used as vote gathering tools.
Inputs to agriculture creation such as capital and labour will continue to be constrained in response to demand for these very same inputs by Malaysia's fast increasing manufacturing sector. This is already leading to the slowdown of capital investment in the agricultural sector which would eventually trickle to naught and could trigger capital outflow out of this sector.
Externally, the price tag on agriculture commodities will continue to be subjected to swings and shifts popular due to the interplay of substitutionary and complementary products. Source and end result of goods as from time immemorial continue being subject to the vagaries of environment, pestilence and seasonality.
Trade obstacles and protectionist agricultural plans will continue steadily to protect agriculture from reforms in many countries, distorting the free market and institutionalize market flaws and inefficiencies.
Agriculture occupies a dominant position in the Malaysian current economic climate. Since the time of United kingdom colonial government, agriculture has assumed quite role to be the backbone and traveling pressure behind the power and success of the Malaysian current economic climate. Agricultural exports such as rubber, oil hand and cocoa are a significant source of export earnings and have significantly added to the development of the agricultural sector and the current economic climate all together. Agriculture is also an important sector in overall economy of Malaysia due to its food contributions, especially rice for home usage. In addition, the sector continues to be the largest source of employment in the united states. Today, marketing, handling, syndication of agricultural products etc. are all accepted as part of modern agriculture. In the course of economic development, agriculture utilizes most people. This means raising the level of the nationwide income and standard of living of the common man. The fast" rate of expansion in agriculture sector offers progressive outlook and further desire for development. As a result, it helps to set-up proper atmosphere for basic economic development of the economy. Thus, financial development will depend on the rate at which agriculture grows.
- Zulkifly Hj. Mustapha. 1988. Development of Malaysian Agricultural Development. In Malaysian Agricultural Policy: Issues and Guidelines. ed. Fatimah Mohd. Arshad et Al. Serdang
- Idris Jala. (2013, September 30). The Superstar, Business News: Agriculture is a sector that is still important to Malaysia's market.
- Azmi Shahrin Bin Abdul Rahim, 2005. A critical assessment the contribution of agriculture sector in the progress of the Malaysin overall economy.