5 - Malaysia: The State of/in Village Agriculture

Summary

Abstract

The case of smallholder transformation in Malaysia represents a deliberate and deep government involvement and intervention in the agricultural sector as well as in the lives and livelihoods of rural smallholders. The technocratic approach of modernizing agriculture through in-situ development programmes and land reformation through FELDA schemes has successfully eradicated poverty among smallholders and improved their standard of living. New challenges for smallholders in sustaining production include the difficulties in hiring workers, the low prices of commodities, and the increased cost of inputs associated with Malaysia’s rapid pace of urbanization and intensified globalization. Prospects for smallholders include the diversification of crops and livelihoods, multifunctional rural practices, and continuing government support in addressing food security.

Keywords: government intervention, Malaysia, pekebun kecil, smallholders, subsidies

The development of agricultural smallholdings in Malaysia remains important as an area of focus in Malaysian development policy. Common issues pertaining to smallholders in Malaysia have always related to the problems of underdevelopment and poverty. Most of the studies on small farmers or smallholders have focused on the issue of poverty among Malays (Thompson 2015; Buang 2007; Onn 1991; Omar 1986; Gibbons et al. 1980). Smallholders in Malaysia commonly include rice farmers, rubber tappers, coconut pickers, palm oil producers, fishermen, among others. Since Malaysia gained independence, problems of poverty have been a consistent issue for the government to address. Government intervention reached its peak during the period of the New Economic Policy (1971-1990), when large-scale programmes tasked with the promotion of smallholders were formally established. At present, while government policy continues to focus on smallholders, the contributions of this sector to rural livelihoods have been declining drastically.

The transformation of the agricultural smallholding sector since the early twentieth century has been due in large part to its integration into the global market – particularly since the introduction of rubber. Some other important factors have also included local socio-demographic, economic, and political processes. The introduction of the rubber economy in Malaysia began during the British colonization in the late nineteenth century, following the growth of industries utilizing rubber in Europe. Investment in large-scale rubber plantations was made largely by European merchant capitalists who had established trading in the Straits Settlements of Malaya (Penang, Malacca, Singapore). Many Chinese merchant capitalists were also involved in rubber plantations, albeit at a smaller scale.