Overview of Agro-Food Subsector
The Malaysia Productivity Blueprint (MPB) was launched in 2017 to enhance productivity and drive the economy of Malaysia forward. At the national, sectoral, and enterprise levels, various initiatives have been launched to unlock productivity potential. One of the vital sectoral initiatives is the establishment of Sector Productivity Nexus including Agro-food Productivity Nexus (AFPN). The AFPN operates under a public-private partnership governance model, with industry associations and enterprise champions taking the lead.
The agriculture sector can be grouped into two subsectors: industrial commodities and agro-food. In the MPB, the blueprint focused on the agro-food subsector for two main reasons:
1. The industrial commodities subsector is fairly mature given the presence of large and successful Government Link Companies (GLCs), which have contributed to uplifting the productivity of the sector. On the other hand, the agro-food subsector is more fragmented and dominated by small players, who can benefit from more guidance and intervention on productivity improvements.
2. The agro-food subsector is expected to increase its contribution to the total value add of the agriculture sector as a whole.
Productivity Performance
Challenges
- Insufficient focus on value-adding activities and disconnections along the value chain
- Many small players with low levels of productivity
- Issues with quality and standards across the subsector
- Low adoption of technology and modern farming techniques
The agro-food subsector provides an overview of the productivity performance between 2017 and 2022. The subsector experienced a dip in productivity growth in 2018, followed by a resurgent period in 2019. However, year 2020 presented unprecedented challenges with the onset of the Covid-19 pandemic, resulting in a significant decline in productivity. After a year of navigating these complexities, the subsector managed to rebound impressively in 2021, achieving a noteworthy productivity growth rate of 3.1%, which stands as the highest recorded during this five-year period. While the productivity growth experienced a surge in 2021, 2022 instead recorded a decline of -1.4%, marking a sharp contrast.
