KUALA LUMPUR, Sept 20 (Bernama) -- The government will continue torevitalise the agriculture sector as the third engine of growth todiversify the country's sources of growth, saysthe Treasury's 2002/2003Economic Report released Friday.It said the slower growth of the agriculture sector of 1.1 percent in 2002compared with 1.8 percent growth in 2001 was mainly due to contraction inthe production of crude palm oil (CPO) and fishing.

However, the positive growth of the forestry, rubber and other agriculturesub-sectors mitigated the growth contraction of palm oil and fishing.

Overall, the production of crude palm oil was expected to register a dropof 3.4 percent or 404,000 tonnes while price of CPO was expected to reachan average of RM1,305 per tonne in 2002 compared with RM893 per tonne in2001.

In 2002, the total hectarage planted wth oil palm is expected to increaseby 2.9 percent to 3.6 million hectares, including new areas identified forcultivation in Sabah and Sarawak. Of this, 69.2 percent is under privatesector ownership and the remainder owned by organised smallholder entitiesunder the Federal Land Development Authority (FELDA) and FELCRA Bhd.

Output of rubber for the first six months of 2002 meanwhile registered anincrease of 3.7 percent to 266,281 tonnes. Total production is expected toincrease only marginally by 0.5 percent to 550,000 tonnes compared with547,000 tonnes in 2001.

Total land under rubber cultivation is estimated to be at 1,348 millionhectares in 2002, a decrease of 2.9 percent.

To sustain the rubber industry, the report said the government wouldcontinue with various efforts, including increasing productivity.

As for forest products, Sarawak, with much higher timber resources, isexpected to increase production of saw logs by 15 percent to 14 millioncubic metres.

Its output of sawn timber, meanwhile, is projected to increase by 10.5percent, mainly for the export markets of West Asia and East Asia.

However, production of saw logs in Peninsular Malaysia and Sabah isexpected to decline by 3.7 percent to four million cubic metres and 15percent to 2.2 million cubic metres respectively.

Similarly, sawn timber production is expected to decline in PeninsularMalaysia and Sabah by 10 percent and 5.6 percent respectively.

The report said valued added in the fishing sub-sector, which accountedfor 11.7 percent of agriculture sector and comprising marine landing andaquaculture harvest, is expected to decrease by 1.7 percent in 2002.

Other agriculture, comprising livestock, cocoa, padi and miscellaneousagriculture, is projected to grow by 6.7 percent and contribute almostone-third of the share to total agriculture value added.

Livestock value added is expected to grow by 6.3 percent, and productionof swine, poultry, eggs and fresh milk is anticipated to expand by 6.6percent, six percent, five percent and 10 percent respectively.

Production of cocoa is envisaged to grow by 3.9 percent to 60,000 tonneswhile the area under padi cultivation is expected to increase in acreageby 5.6 percent to 701,000 hectares in 2002.

-- BERNAMA