Food Industry in Malaysia

Despite Malaysia being one of the top plantation countries in crops such as Oil Palm and Rubber, we have been a net food importer for a long time. According to the latest Quarterly Bulletin from Bank Negara Malaysia, Malaysia’ foods imports forming about 24% of our total food supply. As of August 2019, Malaysia’s food imports have reached RM34.2 billion, indicating increased dependency on food purchases. Some numbers on the food industry in Malaysia:

  • 30% – 40% of our rice consumption is imported
  • More than 70% of our beef supply is imported
  • Malaysia imported RM 7.1 billion worth of cereal in 2018 followed by coffee, cocoa, tea & spices at RM 7 billion, and feedstock at RM 5.9 billion
  • Vegetable import value is RM 4.6 billion, fish & crustaceans are RM 4.1 billion, fruits at RM 3.9 billion, meat at RM 3.9 billion, sugar at RM 3.8 billion and dairy products at RM 3.8 billion

All of these statistics show that Malaysia has yet to attain self-sufficiency in our food supply.

The diagram below shows the Self Sufficiency Ratio of Malaysia by selected food items:

Many of these food products can actually be planted and produced locally, thus bringing more income to the local farmer, creating job opportunities and reduce import value. The local farmers could also target the foreign market by exporting some of the items such as poultry meat and eggs which have high self-sufficiency ratios, thus improving the balance of trade for Malaysia. Malaysia’s government targets to increase the self-sufficiency level for food from the current 70% to 80% by 2023. To achieve this, it will take participation from every party in the ecosystem:

  • One of the main reasons for the high food import is the low production from local farmers. Hence, the existing farmers should actively seek for different ways that would increase their production level. With the emerging 4IR technologies, smart farming which uses sensors, automated irrigation systems, vertical plantation and various modern farming methodology could be a near term solution.
  • The government will also need to realign the current initiatives and incentives to incentivize more farmers to plant rice, vegetables and fruits and also participate in the livestock industry. Some of the areas that could be explored are the funding for 4IR technology adoption, farmers’ capabilities building and also open up the export market for greater global access.
  • Lastly, Malaysian should be more aware of this burning topic of high food import and be more supportive of the local production. Various awareness programs could be introduced to inform Malaysian on the current food import situation and thus influencing the buying behaviour.

Smart Farming as the way forward

Smart Farming or Precision Agriculture is gaining more traction as the people are slowly recognizing the benefits coming for the emerging 4IR technologies. Not long ago, precision agriculture was still something that only large farms could afford due to its high CAPEX on IT infrastructure and the complementary technologies (hardware and software) required to make it work. However, as new technology breakthrough continues to find its ways to the industry, the emerging 4IR technologies such as IoT, smart sensors, cloud computing, mobile apps, drone and geofencing are democratized and adopted by more and more farmers. The picture below from Digitalnewsasia gives an interesting depiction on how a Smart Farm would look like in the future.

Some technology use cases on how smart farming could transform the agriculture industry:

Drone Technology

Drones also are known as unmanned aircraft systems (UASes) which are a flying robot that can be remotely controlled or fly autonomously through software-controlled flight plans in their embedded systems. It allows researchers to take to the skies and capture visual information. Drone technology makes it easier to capture visual information, mine, and utilize data through enhanced computer models. It can be used in several ways which as below:

Scouting/Monitoring plant health – Drones equipped with special imaging equipment called Normalized Difference Vegetation Index (NDVI) use detailed colour information to indicate plant health. The basic principle of NDVI relies on the fact that, due to their spongy layers found on their backsides, leaves reflect a lot of light in the near-infrared, in stark contrast with the most non-plant object. When the plants become dehydrated or stressed, the spongy layer collapses and the leaves reflect less NIR light, but the same amount in the visible range. Thus, mathematically combining these two signals can help differentiate a plant from the non-plant and healthy plant from the sickly plant. This will allow the farmers to monitor crops as they grow so any problems can be dealt with fast enough to save the plants.

Monitoring Field Conditions – Drones can provide accurate field mapping including elevation information that allows growers to find any irregularities in the field. Having information on field elevation is useful in determining drainage patterns and wet/dry spots which allow for more efficient watering techniques. This will allow for precise application of fertilizers, eliminating poor growing spots, improving soil health for years to come and beware of firing spot.

Precision Agriculture

Precision agriculture is referring to the optimisation of inputs like water, fertilisers, pesticides and tools to enhance yield, quality and productivity. The farming management concept centres around observing, measuring, and responding to inter- and intra-field variability in crops using satellite farming or site-specific crop management (SSCM). The concept of precision agriculture is one in which agriculture work is not actually made more precise, but instead the agricultural system as a whole move from a statistical approach to a quantitative approach. Therefore, it is not an exaggeration to say that the scope of precision agriculture is the entire agricultural system. As a system of agriculture, three divisions of technology must be utilized in order to fully develop precision agriculture:

First Division – Monitor the condition of the environment where the plants are growing by using advanced sensor platform. The information collected including the yield of crops, moisture content of the soil, soil nutrients, moisture stress, and the occurrence of pests or weeds, climate by location, temperature humanity and etc.

Second Division – Based upon outcomes determined in decision-making and crop management, machinery will release seeds, nutrients, and chemicals to the crops.

Third Division – Processing of computerized geographical information and databases along with the farmers’ prescribed inputs in order to drive the control systems of various farm machinery.


Blockchain can be defined as a distributed electronic ledger that uses cryptographic software algorithms to record and confirm immutable transactions and/or assets with reliability and anonymity without a central authority and that allows to automate contracts that relate to those assets and transactions (smart contracts). Food safety is one of the concerns of consumers today. The implement of blockchain technology enable the consumer to track the source from where the food has originated or grown through food supply chain tracking. This supply chain tracking ensures that the supplied eatables are safe to eat. The capability of blockchain technology provides a transparency traceability and secure the entire process of food transportation in good condition.

Written by Ivan Yee, Principal Consultant at 27 Advisory

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