October 31 2003 - MALAYSIA’S export earnings from the agriculture sectorincreased by 26.1 per cent from RM23 billion in 2000 to RM29 billion in2003, of which palm oil accounted more than half of the total agriculturalexport value.

Production of crude palm oil (CPO) recorded a 4.2 per cent growth perannum, surpassing the Eighth Malaysia Plan target of 2.8 per cent.

The strong performance of palm oil was due to its competitiveness comparedwith other competing vegetable oils and fats, higher demand from newmarkets, as well as significant increases in price and counter tradeactivities.

For the period under review, the average price of CPO increased 40 percent from RM1,000 per tonne in 2000 to RM1,400 per tonne in 2003.

Overall, planted hectarage recorded an increase of 3.6 per cent per annumto reach 3.8 million ha in 2003, of which 360,000ha, or about 10 per cent,belong to smallholders.

For cocoa, export revenue almost tripled to RM120 million in 2003 fromRM33 million in 2000, as a result of the more than double the increase inthe average export price of dried beans.

Cocoa price increased to RM7,209 per tonne in October 2002, its highest in17 years, due to tight global supplies following production constraints,particularly in the Ivory Coast and Ghana, two major cocoa producingcountries.

A total of 156 food projects with investments amounting to RM5.5 billionwere received by the Agriculture Ministry during the 2001-2003 period, ofwhich 113 were in aqua-culture, 29 for food crops and 14 for livestock.

For the timber sector, the country’s annual allowable cut rate was reducedfurther to 272,870ha from 276,040ha previously.

As a result, the production of sawn logs declined by 4.4 per cent perannum to 20.1 million cu m in 2003.

To ensure sustainable supply of logs for downstream activities and reduceddependence on natural forests for raw material supplies, a total of164,000ha has been earmarked as pilot forest plantations.

The fisheries sub-sector, namely aquaculture achieved highest annualgrowth rate of 18.9 per cent with production increasing from 117,000tonnes in 2000 to 197,000 tonnes in 2003.

Marine-catch recorded an annual growth rate of 4 per cent due tomodernised fishing methods, advanced downstream processing and increasedenforcement to ensure local fishing vessels land in their catch.

On the supporting side, in terms of access to credit, commercial banks andfinancial institutions approved RM2.6 billion, or 1.9 per cent, of thetotal loans disbursed in 2002 for agriculture projects.

Bank Pertanian Malaysia continued to be a major source and of the RM244million allocation, 45.1 per cent, or RM110 million, was disbursed throughseveral agriculture credit schemes benefiting 30,000 smallholders,fishermen, livestock rearers and farmers.

Apart from credit facilities, the Government extended special financialassistance amounting to RM1 billion in early 2001 to assist more than400,000 rubber and oil palm smallholders adversely affected by the sharpdrop in commodity prices.