Agriculture NKEA Fact Sheet The Agriculture NKEA focuses on transforming a traditionally small-scale, production-based sector into a large-scale agribusiness industry that contributes to economic growth and sustainability. This transformation is based on an integrated and market-centric model that comprises four key themes: capitalising on competitive advantages, tapping premium markets, aligning food security objectives with increasing GNI, and participating in the regional agricultural value chain. Sixteen Entry Point Projects have been identified to spur growth in this sector.

List of Entry Point Projects (EPPs) EPP 1: High-Value Herbal Products This EPP looks at improving the product quality and marketing efforts of dietary and herbal supplements to tap the global demand for high-value herbal supplements and remedies. This will be achieved by ensuring that there is sufficient supply of raw materials for research and development (R&D) and clinical trials before production takes place. Additionally, the Ministry of Agriculture (MoA) has established the Herbal Development Office to map the strategic direction, policies and regulations required to spur this industry’s growth. The initial phase of this EPP is focused on ensuring the supply of five main herbs - Tongkat Ali, Misai Kucing, Hempedu Bumi, Dukung Anak and Kacip Fatimah. Investments in this EPP are targeted at both the upstream and downstream segments of the industry, with The East Coast Economic Region Development Council currently managing upstream initiatives ensuring raw material supply. Production of raw materials will however be carried out throughout the country, with Herbal Cultivation Parks to be established in Chegar Perah, Pahang; and Pasir Raja and Durian Mentangau, Terengganu. These parks will supplement ongoing cultivation at 11 herbal clusters set up by the Department of Agriculture located in Perlis, Kedah, Pulau Pinang, Perak, Johor, Selangor and Negeri Sembilan. Activities at these clusters centre on contract farming and the formation of model farms. To further support this EPP’s upstream efforts, the MoA has overseen the establishment of five R&D clusters, which focus on discovery, crop production and agronomy, standardisation and product development, toxicology/pre-clinical and clinical studies, and processing technology. Among developments that have emerged from this initiative include the

expected production of three prototypes from the NKEA Research Grant scheme for commercialisation. Downstream initiatives for this EPP are currently undertaken by eight anchor companies appointed by the MoA, comprising Aning Resources Sdn Bhd, Biotropics Malaysia Bhd, Bioalpha International Sdn Bhd, Nova Laboratories Sdn Bhd, Natureceuticals Sdn Bhd, Natural Wellness Biotech (M) Sdn Bhd, The Mitomasa Sdn Bhd and Phyto Biznet Sdn Bhd. These companies will spearhead the marketing and branding of nutraceuticals and botanical drugs with scientifically-backed claims, ensuring Malaysian herbal products comply with international health standards. This EPP has also expanded by incorporating two Business Opportunities from the Agriculture NKEA. These comprise Business Opportunity 1: Nutraceutical Products, to include other targeted herbs on the nutraceuticals list; and Business Opportunity 2: Foreign Distributor, aimed at establishing a nutraceutical distributor abroad. EPP Lead Herbal Development Office in Ministry of Agriculture EPP Champions:

Biotropics Malaysia Bhd

Novalab Sdn Bhd

Aning Resources Sdn Bhd

Natural Wellness Sdn Bhd

Natureceuticals Sdn Bhd

Bioalpha International Sdn Bhd

Phyto Biznets Sdn Bhd

The Mitomasa Sdn Bhd

Eastern Corridor Economic Regional Development Corporation EPP 2: Edible Bird’s Nest Swiftlet Farming Led by the Department of Veterinary Services (DVS), this EPP strives to increase upstream production of edible bird’s nests (EBN). This will be achieved by building an additional 2,000 new farms yearly and six collection centres while guiding the industry towards developing downstream, value-added products. Four anchor companies; Golden Silver Processing Sdn Bhd, PT Swift Marketing Sdn Bhd, Yanming Resources Sdn Bhd and Duta Sialin Biotechnology Sdn Bhd, have already committed investments to developing processing capacities for these products. The EPP also intends to regulate the industry and improve traceability by registering EBN premises, incorporating traceability systems, enforcing Good Animal Husbandry Practices (GAHP) and Good Manufacturing Practices. EPP Lead

Department of Veterinary Services (DVS) EPP Champions:

Golden Silver Processing Sdn Bhd

PT Swift Marketing Sdn Bhd

Yanming Resources Sdn Bhd

Duta Sialin Biotechnology Sdn Bhd

EPP 3: Mini-Estate Farming for Seaweed This EPP, driven by Department of Fisheries (DoF), aims to transform the seaweed farming industry into a high-yielding commercial-scale business by clustering farms under the seaweed mini-estate initiative. Through this initiative, total production of seaweed is expected to rise from 13,500 metric tonnes in 2010 to 150,000 metric tonnes in 2020. Measures under this EPP place emphasis on improving downstream infrastructure and research and development (R&D) efforts to process dry seaweed into high-value products (e.g. semi-refined carrageenan and alkaline-treated chips), as well as exploring further uses of seaweed. In line with this, this EPP’s project team has targeted the production of 8,640 MT of alkaline treatment chips and semi-refined. Other efforts undertaken for this EPP include plans by the Sabah State Government to gazette another 3,000 ha of land for seaweed production. Meanwhile, three universities, The National University of Malaysia (UKM), Universiti Malaysia Sabah (UMS) and Universiti Sains Malaysia (USM), are in the midst of commercialising eight seaweed products. EPP Lead Department of Fisheries EPP Champions:

Pertubuhan Peladang Kawasan Semporna

Avanova Group Sdn Bhd

Perdana Seaweed Farm

SALS Agriculture

NIZH Goodwill Sdn Bhd

VC United Sdn Bhd

Madesjaya Sdn Bhd

Sebangkat Reef Eco-Plant

UMS Link Sdn Bhd

Ko-Nelayan Negeri Sabah

Kluster Look Butun

Kluster Gelam-Gelam

Kluster Koperasi Bajau Laut

Kluster Kuala Merotai

Permata Sekitar Sdn Bhd

EPP 4: Integrated Cage Farming By integrating cage farming, this EPP seeks to increase the production of high-value fish species (e.g. sea bass, grouper, tilapia and lobster) to account for 28% of total aquaculture production by 2020. The Department of Fisheries (DoF) will also identify anchor companies to train, set standard operating procedures and guidelines for the industry, helping to create an integrated approach for large-scale production – from hatchery to processing. EPP Lead Department of Fisheries (DoF) EPP Champions:

Pegagau Specialty Farming Sdn Bhd

Y.S Inno Fisheries Sdn Bhd

Trapia Malaysia Sdn Bhd

Plentiful Harvest Sdn Bhd

Prima Bumisetia Sdn Bhd

Darvel Bay Hybrid Aquaculture Sdn Bhd

Organic Aquaculture Sdn Bhd

Lobster Aqua Technologies Sdn Bhd

EPP 5: Cattle Integration in Oil Palm Estates This EPP, led by the Department of Veterinary Services (DVS), focuses on integrating and rearing an additional 300,000 heads of cattle in large oil palm plantations by 2020. The integration will be implemented by estate owners through a cattle breeding and rotational grazing programme, in compliance with Good Animal Husbandry Practices (GAHP).

Two programmes were incorporated to support this effort: A feed programme to increase the supply of locally developed feed to address the rising cost of production; and a breeding programme through artificial insemination to fast-track the breeding of good quality cattle. In 2012, DVS and PEMANDU identified the need to integrate cattle-rearing, representing the upstream segment of beef production, with the downstream, production segment. Following this, EPP Livestock: Full Value Chain was developed to incentivise downstream players to move upstream and vice versa through collaboration with players under EPP 12: Expansion of Cattle in Feedlots and EPP 16: Overseas Acquisition/Joint Venture of Cattle Farms. For 2013, this EPP targets the integration of 17,300 more heads of cattle in palm oil plantations, with 5,400 cattle to undergo artificial insemination. The feed programme, meanwhile, is expected to increase production of complete feed to 35,500 MT. EPP Lead Department of Veterinary Services EPP Champions:

FELCRA

Espek Livestock Sdn Bhd

Laka Temin Silaj Sdn Bhd

Ladang Rakyat Terengganu Sdn Bhd

Pertubuhan Peladang Negeri Pahang

Narajaya Enterprise

Aqil Berjaya Enterprise

Kulim Livestock Sdn Bhd

YPJ Plantation Sdn Bhd

Pertubuhan Peladang Negeri Johor

FELDA Plantation

Johor Corporation

Felda Farm Products Sdn Bhd

Sawit Kinabalu Sdn Bhd

Ladang Dafa Sdn Bhd

Rimbunan Hijau Sdn Bhd

Sarawak Land Consolidation and Rehabilitation Authority

Sarawak Plantation Agriculture Development Sdn Bhd

Nurinfra Mutiara Feedmill Sdn Bhd

Nakasia Dagangan Sdn Bhd

Kris Biotech Sdn Bhd

Palm-Gen Sdn Bhd

Falcon Livestock Sdn Bhd

VAM Incorporated

Ar-Raudhah Bio-tech Farm

EPP 6: Replicating Integrated Zone for Aquaculture Model (IZAQs) to Tap Market for Premium Shrimp Led by the Department of Fisheries (DoF), this EPP focuses on improving the production of fully-certified export quality shrimp for premium markets by establishing an Integrated Zone for Aquaculture Models (IZAQs). IZAQs comprise networks of industrial scale and land-based aquaculture zones, with each zone, equipped with integrated infrastructure consisting hatcheries, grow-out areas, a processing plant and feed mills, championed by an anchor company. Smallholders and SMEs are expected to participate in this project through contract farming or profit-sharing agreements with anchor companies. By 2020, this EPP targets for the establishment of 10,000 ha of IZAQs, while the total production from anchor companies that have completed construction of their IZAQ is expected to reach 23,000 MT at the end of 2013. EPP Lead Department of Fisheries EPP Champions:

JEFI Aquatech Resources Sdn Bhd

Hannan Corporation Sdn Bhd

Pegagau Speciality Farming Sdn Bhd

Blue Archipelago Bhd

LKPP Corporation Sdn Bhd

Sunlight InnoSeafood Sdn Bhd

Asia Aquaculture Sdn Bhd

QL Aquamarine Sdn Bhd

KB Aquaculture Sdn Bhd

BioDesaru Sdn Bhd

EPP 7: Premium Fruits and Vegetables Led by the Department of Agriculture (DoA), this EPP aims to export local premium fruits and vegetables to the Middle East and Europe, which import more than 50% of the global production of higher quality local fruits and vegetables that comply with food safety standards. The DoA has identified 3,000 farmers who will be placed under anchor companies that will manage the integrated supply chain model, gain market access and export the produce. Six high-value non-seasonal tropical fruits (rock melon, starfruit, papaya, banana, pineapple and jackfruit) and three high-value highland vegetables (lettuce, tomato and capsicum) have been identified as target produce for this EPP. Among other initiatives undertaken through this EPP include:

Leveraging existing Permanent Food Production Zones (Taman Kekal Pengeluaran Makanan – TKPM) to boost the production of the identified fruits and vegetables. To support this effort, the DoA will collaborate with more states to raise the value of premium fruits produced to at least RM40 million in more TKPMs. This will be achieved by establishing an additional 1,000 ha of land to be used as production zones. Additionally, one-stop centres will be established in respective states to expedite land approval for stakeholders who wish to obtain premium fruit and vegetable farmland.

This EPP has also expanded by incorporating Business Opportunity 9: Packaged Fruit Production such as Jackfruit. This involves establishing minimal processing operations to export ready-to-eat fresh jackfruit, juice and vacuum-fried chips to markets such as China. On its part, the Ministry of Agriculture has targeted to increase the total export value of Malaysian premium fruits and vegetables to RM400 million. This will be achieved by strengthening ties with Malaysia’s existing trading partners to create more markets for the country’s fruit and vegetables. This EPP also works in synergy with the Rural Development National Key Result Area under the Government Transformation Programme. Under this effort, the DoA is collaborating with the Ministry of Rural and Regional Development to provide land for private companies to expand while increasing the income of rural communities under the NKRA’s 21st Century Village initiative.1 EPP Lead

Department of Agriculture (DoA)

EPP Champions:

1 The 21st Century Village initiative aims to transform the liveability of rural areas and

develop villages into agriculture-driven economies.

Exotic Star Sdn Bhd

K.C Kwang & Sons Sdn Bhd

JTP Trading Sdn Bhd

Fresh Momentum Sdn Bhd

Pertubuhan Peladang Negeri Pahang (PASFA)

Far-East Import Export Sdn Bhd

EPP 8: Food Park

This EPP, driven by the Ministry of Agriculture (MoA), aims to consolidate the local processed food industry by developing an integrated food park facility. The food park will produce ready-to-eat packaged food by SMEs. The packaged food will be marketed and distributed by anchor companies who will also obtain product certification, package, brand, market, manage suppliers and help develop small fragmented players through apprenticeship training. EPP Lead Ministry of Agriculture – Agro-based Industry Division EPP Champions:

Rukun Saksama Sdn Bhd

Duria Resources Sdn Bhd

Pertubuhan Peladang Negeri Johor

Sunlight Inno Seafood Sdn Bhd

EPP 9: Fragrant Rice Varieties in Non-Irrigated Areas This EPP focuses on planting fragrant rice (e.g. Jasmine or Basmati-type) on rain-fed areas to increase the average national paddy yield, reducing Malaysia’s dependence on imported rice. Initiatives under this EPP also seek to produce premium organic rice, with anchor companies appointed to undertake the planting and commercialisation of fragrant rice varieties developed by MARDI (Malaysia Agricultural Research & Development Institute). As at June 2013, this EPP’s anchor companies have planted 297 ha of the 750 ha of fragrant rice varieties targeted by MARDI for planting to increase total production to 2,500 ha. MARDI will also identify more anchor companies to commercialise the fragrant rice varieties produced while supporting the existing four players in their production and marketing efforts. Additionally, MARDI will continue R&D efforts to produce new fragrant rice varieties and agronomic packaging to support the commercialisation of these products.

EPP Lead Malaysia Agricultural Research and Development Institute (MARDI) EPP Champions:

Infoculture Sdn Bhd

Paddytech Resources Sdn Bhd

Bionic Agro Sdn Bhd

Birinbaru Enterprise

EPP 10: Strengthening Productivity of Paddy Farming in MADA Led by MADA (Muda Agricultural Development Authority), this EPP aims to establish Malaysia’s long-term food security and increase the income of paddy farmers. This will be achieved by adopting the estate farming approach under a single management in the Muda vicinity in Kedah, introducing a land amalgamation scheme for 50,000 ha (51% of the total 96,558 ha) of paddy fields by 2020. The adoption of technologies will also be intensified across the production chain of the paddy and rice industry, such as the introduction of new seed varieties, use of new nano fertilisers, improved irrigation, and larger scale farm mechanisation. These initiatives aim to raise the paddy yield from 5 MT per ha to 8 MT per ha by 2020. The Muda granary area accounts for 37.1% of national rice production and 24.1% of the total rice cultivation area in Malaysia. Together with rice industry regulator BERNAS, MADA is finalising the establishment of a special purpose vehicle (SPV) to implement initiatives to streamline the whole value chain of the industry, from seed production to the sale of rice. In 2013, MADA aims to amalgamate another 5,000 ha of land in the Muda area, bringing the total to 15,000 ha of land amalgamated under the estate farming model. A central management is expected to manage the amalgamated land to increase the income of participants by 5%. Meanwhile, the construction of infrastructure for seven irrigation blocks will begin at Tambun Tulang, Pendang, Kepala Batas, Kubang Sepat, Pengkalan Kundur and Tajar. EPP Lead

Muda Agricultural Development Authority (MADA)

EPP 11: Strengthening Productivity of Paddy Farming in Other Granaries The estate farming approach, demonstrated in EPP 10: Strengthening Productivity of Paddy Farming in MADA, will be replicated in seven other granaries in Malaysia to increase the national productivity of paddy, as well as to ensure a steady income for farmers who plan to exit paddy farming. The scheme will also be implemented in an identified area of 5,100 ha of

land in Batang Lupar and 5,000 ha in Kota Belud. This initiative will ensure that flood mitigation and water management systems up to the tertiary level are put in place. To improve productivity, this EPP, driven by the Ministry of Agriculture’s (MoA) Paddy and Rice Division, will establish a research and development (R&D) programme to study the drought tolerance and pest/disease resistance of rice crops to improve the yield of Sarawak’s traditional rice varieties. In 2013, this EPP aims to amalgamate another 5,400 ha in the seven IADAs (Integrated Agricultural Development Authority), as well as in Kota Belud and Batang Lupur, Sarawak. Following the model by MADA, each IADA will facilitate the farmer’s co-operatives to move into downstream production to generate better returns for the farmers. EPP Lead Ministry of Agriculture – Paddy and Rice Division EPP Champions:

Kemubu Agricultural Development Authority (KADA)

IADA Barat Laut

IADA Seberang Perak

IADA Kemasin-Semarak

IADA Kerian Sg Manik

IADA Pulau Pinang

IADA KETARA

Ministry of Modernisation of Agriculture, Sarawak (MOMA)

Ministry of Agriculture and Food-based Industries, Sabah (MAFI)

EPP 12: Expansion of Cattle in Feedlots This EPP aims to establish 300 satellite farms to support anchor companies involved in feedlot operations, with the aim of improving the national self-sufficiency level for beef. Anchor companies are tasked with overseeing operations of the entire value chain involved in providing feedlot services while managing the integration and consolidation of downstream processes. Improvements are made in the downstream process through the enforcement of abattoir certification, cold-chain delivery of chilled cuts, promotional exercises to create market awareness of imported buffalo meat versus beef, and the development of other beef by-products. In 2013, this EPP targets to place another 20,000 heads of cattle on feedlots in existing satellite farms.

This EPP, led by the Department of Veterinary Services (DVS), collaborates with EPP 5: Cattle Integration in Oil Pam Estates and EPP 16: Overseas Acquisition/Joint Venture of Cattle Farms to establish a fully integrated livestock value chain. EPP Lead

Department of Veterinary Services

EPP Champion

FELDA Gedung Makanan Negara EPP 13: Dairy Clusters This EPP aims to reduce Malaysia’s dependence on imported fresh milk by forming dairy clusters under anchor companies to produce milk on a large-scale basis. Anchor companies will oversee all aspects of the dairy cluster operations, from production to marketing. Individual farms will be engaged by anchor companies, with a deal to guarantee purchases at a pre-determined price. Steps will also be taken to upgrade existing cold-chain milk facilities to ensure that milk quality is maintained during shipment from farm to marketplace. Among targets set for this EPP include:

Identifying another anchor company to spearhead the development of dairy clusters in the northern and eastern regions.

Ensuring that existing clusters achieve their respective targeted milk production of 15 million litres in 2013, with existing anchor companies targeting to increase the average milk production per cow per location in their clusters to 15 litres per lactation per day from the current 10-11 litres.

EPP Lead

Department of Veterinary Services

EPP Champions:

Evergreen Livestock Sdn Bhd

Allied Dairy Sdn Bhd

Golden Difference Sdn Bhd

EPP 14: Seed Industry Development This EPP will review production methods of high-quality seeds and genetic material by using Marker-Assisted Selection (MAS) technology. The MAS technology was introduced by MARDI’s Centre for Market Discovery and Validation (CMDV) in 2011 to help select seeds

with desired traits, thus significantly reducing the number of breeding years and guesswork required to develop high-quality progeny. A National Seed Council was established to oversee the development of the local seed industry and reduce Malaysia’s dependence on imported seeds and breeding material. Anchor companies will spearhead the growth of this industry by expanding production to cater for both domestic and export markets. The CMDV will begin developing markers for selected commodities covering disease resistance in tilapia, drought tolerance in rice, papaya dieback resistance, bacterial heart rot resistance in pineapple, milk production in Sahiwal and Sahiwal-crossed cattle. These markers will be available to the industry so that seeds with desired markers will be selected for planting or breeding. The Ministry of Agriculture (MoA) will also implement an incentive scheme to aid local seed players to further develop high-quality seeds locally. EPP Lead Ministry of Agriculture – Industry Support Division EPP Champions:

RB Biotech Sdn Bhd

Green World Genetics Sdn Bhd

EPP 16: Overseas Acquisition/Joint Venture of Cattle Farms This EPP, led by the Department of Veterinary Services (DVS), aims to secure a consistent and affordable source of live animals required for breeding, placement in feedlots, and dairy operations over the next decade. This initiative was expanded to review potential areas in agriculture that could raise additional revenue for the country. This EPP is the last component of the EPP Livestock: Full Value Chain with two other livestock EPPs (EPP 5: Cattle Integration in Oil Pam Estates and EPP 12: Expansion of Cattle in Feedlots) to achieve a sustainable local beef industry. Participating companies of this EPP will also be given first rights to supply live animals to companies under the livestock EPPs. For example, if the Government needs to procure cattle for companies under EPP 5, participating companies under EPP 16 will be offered the first bid to supply the cattle. The DVS will continue monitoring the anchor companies under this EPP while incorporating the feedlots into EPP Livestock: Full Value Chain to ensure a complete integration of the value chain. The target is to achieve RM60 million in revenue generated from this project in 2013. EPP Lead

Department of Veterinary Services

EPP Champions:

SEDC Sarawak

Ternakan Kamran Sdn Bhd

Bumi Yadanar Sdn Bhd

Huzaifah Farm Sdn Bhd

EPP 17: Pasar Komuniti (PAKAR) This EPP, driven by the Federal Agriculture Marketing Authority (FAMA), targets to transform and modernise various markets, as well as integrate local markets such as Pasar Tani, Pasar Malam, Pasar Minggu, and Pasar Tamu into a much larger market known as Pasar Komuniti (PAKAR), which will be equipped with amenities to facilitate cleanliness and help traders increase their revenue. FAMA is working with other relevant Government agencies to monitor the PAKARs, and is currently identifying suitable sites and engaging market traders to establish the markets. In addition to PAKARs, the project team is also evaluating the possibility of another type of market, Pasar Karavan, to further increase the country’s GNI. This EPP was moved from the Wholesale and Retail NKEA in 2012 and is expected to boost the revenue of traders by up to 30%. EPP Lead Federal Agriculture Marketing Authority (FAMA)

Agriculture NKEA key contact: NKEA-Agriculture@pemandu.gov.my