Agriculture Sector Contracts 2 Percent

THE agriculture sector contracted 2% during the first half of 2009, mainly due to lower production of palm oil.
However, output of the non-commodity sub-sector, including livestock, fishing and other agriculture, expanded strongly with the implementation of various programmes.

These include high-impact projects such as permanent food production parks, national feedlot centre and contract farming. These programmes focused on commercialising and modernising farming practices.

For the year, value-added of the agriculture sector is expected to fall 2.3% on lower output of palm oil and rubber. In spite of the drop, the sector’s share of the GDP rose to 7.6%.

Value-added for the palm oil sector declined 3.3% during the first half of the year due to lower crude palm oil (CPO) production. This was due to unfavourable weather coupled with increasing replanting exercise.

For the first nine months, CPO production fell 3.7% to 12.5 million tonnes. Production is expected to drop 4.1% to an estimated 17 million tonnes for the whole year.

Oil palm cultivated areas expanded 3.9% to 4.57 million hectares as at end of June, from 4.4 million hectares a year ago.

Private estates accounted for 60% of the total planted area, 27.4% managed by Felda and other government agencies, while the remaining 12.6% by smallholders.

Total planted area is expected to reach 4.65 million hectares this year.

For the first nine months of the year, CPO prices averaged RM2,234 per tonne. Full-year average price is projected at RM2,300 a tonne.

Value-added of the rubber sector registered a 31.5% drop during the first six months of the year. This was due to a decline in rubber production.

For the first seven months till end-July, rubber production fell 29.7% to 466,501 tonnes on weak demand and reduced planted area.

Full-year production is envisaged at 840,000 tonnes. About 95% of total production are by smallholders.

Value-added of the livestock sub-sector grew 5.2%, driven by higher production of poultry and cattle.

Other agricultural sub-sector, comprising padi, pineapple, tobacco and others, rose 8.8% during the first half of the year.

Source : The Star

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