Malaysia is well known as the second-largest producer of palm oil in the world. The country also produces other valuable agricultural commodities, including natural rubber and Malaysia’s staple food, rice. Nevertheless, challenges like flooding and other natural disasters caused mainly by climate change, as well as labor shortages, have put the agriculture sector at risk.
Key agricultural commoditiesThe agriculture industry in Malaysia relies heavily on the farming sector and its cash crops, palm oil and rubber. These crops are grown mainly for their commercial value to be exported all over the world. The value of Malaysia’s agricultural exports increased by more than 30 percent in 2021, with palm oil and palm-based products as its major export commodities.
Food crops, including rice, fruits, and vegetables were the second most important commodities. However, the country’s production of food crops was not enough to meet local demands. Malaysia’s imports of rice reached more than one million metric tons in 2021, making up about 30 percent of the country’s demand for the staple food commodity.
Livestock was also essential for the country’s agriculture sector, with the poultry industry’s contribution to GDP reaching around 10 billion Malaysian ringgit in 2021. That same year, chicken was the most popular type of meat among the Malaysian population, of which 63.5 percent are Muslims. The per capita consumption of poultry in Malaysia was ten times higher compared to other livestock products.
The challenge of climate changeClimate change has become the main challenge farmers in Malaysia now have to face. The government has tried to mitigate the impacts of climate change on the agricultural sector and increase efforts toward more sustainable farming by allocating more money to the agriculture sector in the 2023 budget.
Moreover, the country also had to deal with the aftermath of the COVID-19 pandemic, which caused a shortage of foreign workers due to travel restrictions. Many large palm oil plantations mainly rely on labor force from neighboring countries. Although the number of non-Malaysians employed in the agriculture sector bounced back in 2021, the temporary labor shortage had an impact on Malaysian palm oil production.
The future of the agriculture sector in Malaysia is still uncertain amidst current challenges. An impending El Nino forecast to return in mid-2023 could potentially cause a prolonged drought. Nonetheless, with additional efforts from the Malaysian government to support this sector, the agriculture industry will likely survive these challenges.