Second Malaysia Plan - Agriculture

Agriculture

The Second Malaysia Plan continued the initiatives that previous five year plans, such as the First Malayan Five Year Plan, had taken. Although expenditure on other development increased substantially, by about M$1 million, funding for rural development was also increased. The Second Malaysia Plan focused on diversifying crops grown in Malaysia; the 1974 Green Book Program aimed to make Malaysia self-sufficient in food production by encouraging farmers to grow vegetables, such as long beans, chilies, etc., and rear livestock—the Veterinary Department going as far as to distribute cattle. Fertilisers, seedlings, insecticides and herbicides were subsidised. Double-cropping of rice was encouraged, so farmers could harvest twice in one year and effectively double their output. The Farmers' Organization Authority was established in 1973 with the goal of coordinating agricultural cooperatives, farmers' associations, and government agricultural agencies.

Growth in small-scale agriculture was viewed as crucial to creating jobs and reducing rural poverty, and government agencies such as FELDA (the Federal Land Development Authority) vastly increased the scope and size of their development programs. RISDA (the Rubber Industries Smallholder Development Agency) was given the task of diversifying smallholder estates; RISDA set itself the ambitious goal of developing 150,000 acres (610 km2) during the Second Malaysia Plan. The main aim was to diversify into palm oil through the planting of oil palms. The Malaysian economy relied heavily on rubber at the time—at its peak, Malaya (Peninsular Malaysia) alone produced more than half of the world's rubber. However, the Great Depression, which depressed rubber prices, greatly set back the Malayan economy. The Malaysian government thus aimed to avert another incident by diversifying the agriculture sector. However, RISDA overreached itself in attempting to so quickly reappropriate land; by the end of the Second Malaysia Plan, only 40,000 acres (160 km2) had been developed, with only half this number comprising oil palm estates.

The land development and resettlement policies instituted by the government, however, failed to make an impact on rural poverty. The government managed to resettle only 40,000 people, despite an estimated 535,000 families engaged in agriculture living below the poverty level. Due to inefficiencies in the program, the beneficiaries of resettlement and development were not always those with the greatest need. It was also alleged by some that there had been too much emphasis on the difficult process of resettlement and development of new areas, instead of increasing productivity in existing farms. Matters were complicated by the Constitution, which gave the states much control over land development, and thus requiring the federal government to negotiate with individual state governments. Non-Malay rural families also did not benefit much due to this, as the Constitution reserved portions of land for the Malays, and state governments were not anxious to receive destitute non-Malays.

Although the Second Malaysia Plan greatly modernised the "rice bowl" states of Kedah and Perlis—virtually eliminating the water buffalo by replacing it with tractors—most smallholders and individual farmers did not benefit technology-wise. In the corporate agriculture sector, the Malays held only a 0.3% stake, as opposed to 70.8% held by foreign interests. In the noncorporate sector, the Malays held 47.1%. Due to limited capital, many Malays were still engaged in "lower productivity activities" as the Second Malaysia Plan ended.