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Grass-roots entrepreneurism

Article - September 9, 2014
Malaysia has taken agriculture and transformed it into agribusiness, benefiting from the results of value-added products on today’s market.

Profit maximization objectives and money appropriated for research and development offer farmers new incentives to invest in technology like the use of special genomes to increase crop yield and high-tech systems for waste refinement.

To motivate innovative Malaysians to get involved, the Malaysia Pineapple Industry Board (MPIB) and the government work together to allocate land and housing for young entrepreneurs. "Last year we got 5,000ha in Pahang," says CEO Haji Sahdan bin Salim.

Meanwhile, more than 112,000 families are involved in Felda Global Ventures (FGV) palm oil plantation schemes. According to CEO Emir Mavani Abdullah, "We have not only contributed to the social wellbeing of these households, but we have also created the necessary infrastructure along the way." Benefiting from new schools, hospitals, banks and other amenities, many working in the industry are now self-empowered and earn professional wages.

Farmers earn more money partly because national production now focuses on higher market-value products. Mr. Sahdan of MPIB illustrates: "We used to have 70 percent of production sent to factories and only 30 percent for fresh fruit exports." Since 2000, that figure has been reversed, and considering the annual consumption of fresh pineapple in the EU has increased 16 percent in the past five years, production is significantly more cost-effective than ever before.

Professor Dr. Tan Sri Yusof Basiron, CEO of the Malaysian Palm Oil Council, on the other hand points out that Malaysia and Indonesia dominate their industry, producing "more than 85 percent of the world’s total production of palm oil." An advantage for the third-largest producer of palm oil and the largest sugar refinery in Malaysia, FGV looks to develop the upstream and downstream markets equally by adding edible goods to its repertoire of oleo-chemicals. It has clearly been a fruitful strategy as they reported profits of RM905 million (£169m) in 2012.

Agriculture comprises only 7.6 percent of GDP and 14.8 percent of national employment, but Malaysian business leaders are intent on capturing premium markets like the EU and Asean. Commodity crop organizations like the Malaysian Cocoa Board are working to improve quality, regulate market activities and disseminate information to help farmers comply with international food safety standards.

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