04/10/2011 (The Sun Daily) -  The local agriculture sector needs to maintain its productivity growth and invest in technologies and systems, said a Harvard University professor.

C. Peter Timmer, Thomas D. Cabot Professor of Development Studies, said Malaysia's agriculture sector is set to be highly diversified with the opportunity to be a global technology leader in the sector.

Timmer is also the principal adviser of Asia Society/IRRI Task Force on Food Security and Sustainability in Asia.

"The future for agriculture in Malaysia is going to be much more — and you're already getting there — highly diversified. You're going to go for high-end consumer dollar. You've already got the supply chains, beginning to source locally and going after that. You've got some very efficient estate crops — oil palm, rubber, those are valuable commodities; you want to keep the productivity growth going there.

"You've got an opportunity to be right up front globally on the technologies and on the systems that would make that happen. You're rich enough and smart enough to be able to make these investments and your consumers are willing to pay for it.

"It's a pretty nice situation to be in. You're small enough and you don't have to grow your own rice. I won't be at all concerned if you lower the target from 70% to 50% (own rice production) ultimately," Timmer said.

He added that Malaysia can leverage on the growth of its diversified agriculture portfolio compared with other Asean countries such as Indonesia, Thailand and Myanmar which rely heavily on rice production.

Speaking to reporters at the International Affairs Forum on 'Managing Volatile Food Prices: Options at the Macro and Micro Levels', he said rice consumption in Asia has decreased and so too has production due to income elasticity and migration of rural workers to urban settings.

He said as incomes increase, people tend to consume less rice and more meat, fish, vegetables, fruits and other food, while the migration of farm workers to the cities has resulted in the fall of rice consumption due to the food options available and the removal of the need to produce food for own consumption.

Timmer does not feel that Malaysia is facing any food supply shortage and expects the population to be able to cope with rising food prices due to inflation, as the market will "self-correct".

"I'm not worried about long run supply of agriculture production; the big question is about who gets access to it. The world can live with food prices rising in real terms by 2% to 3% per year, just as we learn to live with food prices that were falling 1% to 2% per year. We'll cope with that.

"What we can't cope with very efficiently, is when the price changes 100% to 200% in six months. We don't have the institutions and the social economic mechanisms to cope with that. So, I worry more about (price) instability, more than I do about the trend."

He added that there needs to be a balance between how fast a country can increase its food supply and how fast it can grow the economy.