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Introduction
The National Agro-food Policy (NAP) implemented by the government of Malaysia can have profound implications for various stakeholders such as farmers, investors, labor force, and consumers. The paper is aimed at examining various aspects of this program and its potential impacts.
Analysis of the policy
Overall, the NAP has been necessitated by several factors. In particular, Malaysian policy-makers focus on the possibility that the price of crude oil will gradually increase during the period between 2010 and 2020. Therefore, it is vital to make agriculture of the country more sustainable in terms of energy consumption. This requirement is particularly relevant if one speaks about the potential impact of climate change which can make wheat production less cost-effective. Additionally, policy-makers paid attention to such an issue as the rising prices of food products throughout the world.
In turn, it is vital to ensure the food security of people living in Malaysia (Dardak 2015). This detail became very important after the food crisis which affected the Asian markets in 2008 (Tey 2010, p. 501). Furthermore, this program is supposed to improve the competitiveness of local enterprises. These businesses should be able to operate at the international level. Finally, it is vital to improve the quality of food. One of the main objectives is to make sure that businesses comply with the safety standards that are adopted by Malaysian regulators and international organisations. These are the main needs that governmental officials took into account.
This policy includes several important elements. At first, one should mention the adoption of regulations that can facilitate the work of farmers. For instance, it is possible to consider the reduced tax rates for these businesses. Apart from that, policy-makers focus on the development of infrastructure that can be critical for agricultural businesses. For instance, they invest capital in the construction of roads and improvement of the water supply system. It should be mentioned currently many lands are not occupied, because there are no infrastructural resources. So, one of the tasks is to address this problem because it impairs the work of many businesses.
Furthermore, the goal of this policy is to provide training to farmers. These people should learn about the best practices that are adopted by agricultural businesses throughout the world. This step is vital for increasing the efficiency of local businesses. In addition to that, the government intends to provide petrol and diesel subsidies to small and medium-sized enterprises (The Government of Malaysia 2013). Thus, these businesses will have more opportunities for growth and improving their competitiveness in the market.
Finally, policy-makers want to increase the profitability of these enterprises. One of their intentions is to decrease the role of mediators. In particular, one should speak about the relations between farmers and retailers that deliver food products to consumers. Overall, the main task of this program is to offer incentive to various local businesses and potential investors. These are the main aspects that should be taken into account.
Impact on the agricultural sector
Provided that this policy is implemented successfully, it will produce several beneficial impacts on the agricultural industry. In particular, it will increase the role of small businesses in this sector of economy. They will increase their market share relative to foreign corporations and large local businesses. As a result, this sector will become more competitive. Moreover, large businesses will not have many opportunities for dictating their terms to consumers and setting higher prices. So, food products will become more affordable to local clients and travelers.
Apart from that, this program can make agricultural sector more attractive to investors. Moreover, this policy can increase professional standards for people who choose to work in these businesses. One should not suppose that these people may be regarded only as unskilled laborers. As it has been said before, these people should learn about the best practices and the use of innovative technologies. Finally, Malaysia can become a leading exporter of various food products. Additionally, this sector of the economy will be driven by innovations, rather than conventional practices. This is one of the points that should be made.
However, this program will be beneficial, if governmental officials effectively use financial resources that are available to them. This argument is particularly relevant if one speaks about the financial incentives offered to various businesses. Secondly, the state should eliminate bureaucratic barriers that can prevent investors from bringing capital to the agricultural sector. If these requirements are not met, this policy will not bring any tangible benefits. More likely, it will only lead to increased expenditures. So, policy-makers should remember about this risk.
Conclusion
On the whole, this discussion shows that the program implemented by the Malaysian government can increase the role of agricultural businesses in the economy of the country. This policy is largely based on the premise that it is important to offer various incentives to potential investors and entrepreneurs. Moreover, the activities of these people can made more effective, if they know about business models and production practices that have been tested in different settings.
References
Dardak, R 2015, Transformation of agricultural sector in Malaysia. Web.
Tey, Y 2010, ‘Malaysia’s strategic food security approach’, International Food Research Journal, vol. 17, no. 20, pp. 501-507.
The Government of Malaysia 2013, Agriculture: FAQ.
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