Agriculture for survival

By
Norazmi Talib .
Date: Wednesday, January 19, 2011, 3:19 AM

I'm an agronomist and probably not that well verse on economics.


As for rice, I need to point out several facts.

Currently we imported around 700,000 tons of rice per year i.e. 30% of our consumption and the amount kept increasing.
Malaysian population stands at 27.2 million in 2007 and an additional person added every 56 seconds. By 2017, an additional 5.3 million (20%) mouths to be fed, another 500,000 tons of rice per year needed. Its only 5 years down the road.
Our paddy production is almost stagnant for the past 20 years and land utilization has been reduced to make way for other development. Please take note that building a paddy field take years. The soil needs to be packed in order to retain water.
If the price of rice goes up 5 times (RM15 per kg), most of us will still continue to eat rice but probably at a reduced rate. The ones who are going to suffer are the poor people (30% of the population). You don't need a war from outside to destroy the country but from within.
World rice production is 620 million tons/year whereas total export/import (meaning rice trade) is only 27 million tons (4%), a miniscule. Since rice is the staple food for 3 billion people of the world (half world population - mostly in Asia), even a slight shift in world rice production will have a catastrophic consequences. Local wars, climate change, reduction in planting areas etc are factors that have a negative impact on world rice production.
Thailand, nicknamed, World’s Kitchen, is not one of the biggest producers. The name was given being the world biggest exporter at 9 million tons/year, a third of total world export since their consumption is lower than their production.
The biggest producers are China, India, Indonesia and Bangladesh, in that order. Hence, rice is highly subsidized to feed the poor population. If rice prices were allowed a free rein, most of them might not afford it. Thus, the term "Food Security"
Currently these major producers are producing just enough to support themselves.
Thus, in conclusion, if there is a small reduction in rice production (remember only 4% are being traded world wide), with the mighty financial power of China and India, they will be able to buy it at any price since it is for topping up their cheap local production.
We, on the other hand, might not be able to compete with them hence will have to raise our local prices at unthinkable levels. As you correctly mentioned, with government cofers nearly empty, we can't be subsidizing this high rice prices to support our population.
However, we are still blessed with oil palm, a strictly 'equatorial' crop. You can't produce palm oil more than 5 deg North/South of the equator. Hence, you hardly see it in Thailand, Vietnam, Australia etc. At 5-6 tons of oil per hectare, no other oil crops can match its oil production. Not soya, corn, oil seed etc.
The average FFB price from 1995-2005 (10 years) is around RM285 per ton with production cost around RM110 per ton. Netting about RM175 per ton. Average FFB price now, from 2005-2010 (5 years) is around RM470 with cost of production around RM140 per ton, netting around RM330 per ton, almost double from 5 years ago. The current FFB price now hovers at RM800 per ton!! Imagine if a hectare produces 30 tons per year. Break even now is 2-3 years after fruiting and it will last for 25 years!
We have to look at various food items to sustain our future. Barter trade with food commodities might be a reality if fiat money does not have any value in the future (if you are not keen on gold). We still have ample land in Sarawak for palm oil production but hampered until now due to 'native land rights'. That state is good for another 2-3 million hectares.


On rice production, we might have to plant rice overseas on plantations owned by us. Lands in Kampuchea, Mindanao, Laos and some parts of Indonesia are still available. Aceh for example has 40,000 hectares of idle paddy fields and this can produce around 230,000 tons rice per year (10% of our consumption).


In my limited economic opinion, food items is a must in order to sustain any economic turmoil and steps should be taken to lessen the impact. Remember, we can safely ride the Japanese Occupation due to the fact that our kampung folks have sufficient rice or ubi kayu to eat, but if the same thing were to happen now, I don't know whether we can survive. Hence, during hard times, food; be it vegetables, fruits, staple food etc are most important. People don't want electronics, cars, electrical items etc if they are hungry and have families to be fed. Only food matters most. During that time, barter trade of food items might work.


The mighty Russians are on their knees when they do not have enough food to feed their population. Thus ending the cold war. They are too busy building their army and neglecting agriculture.


On massive bombings (destroying farmland ..editor comment), . Yes, you can bomb a building but not vast plantations. Its hardly worth the effort. Burning and chemical poison also are only to a certain extent, but not all. You can't burn oil palm trees just like rubber. It just doesn't work.


Yes, I do agree ... problem now lies with the riba system. Allah has declared war on the ones who practices it and as we can see now whole nations i.e. US/Europe are going down due to this usury practice. Their financial system is in a complete mess. We, Muslim nations are as guilty for condoning to such practices. It might be that Allah will spatter His wrath upon us, as He had done numerous times in the past. Only then will people start to seek his guidance and follow his path. And only then, will our iman and good deeds improved to accept Islam economic model as our practice.


I remembered one of the brothers in Gaza told me recently, "Alhamdulliah, Allah gave us this mehna. If not, our girls will be just like the ones in Jordan dan Syria". This is the strength of the Palestinians that we have to emulate. We have a lot to learn from them for us to win the battle of the future; which is definitely coming sooner or later.


Wassalam.


Norazmi