30/09/05 KUALA LUMPUR, (Bernama) -- The agriculture sector is expected togrow at a higher rate of five percent in 2006, contributed by higherproduction of palm oil and rubber and increase in food production, saysthe Treasury in its 2005/2006 Economic Report released Friday.

For this year, value added of the agriculture sector is set to grow by 4.8percent.

The growth is partly attributed to higher output of crude palm oil (CPO)due to improved productivity and expanded matured areas.

"The government continues to revitalise the food sub-sector throughimplementation of various strategies and measures to boost productioncapacity and efficiency," the Treasury said.

It added that continued investments in niche areas of the agriculture,seaweed, herbs, floriculture and ornamental fish are also expected todrive growth of this sector.

For this year, production of CPO is expected to increase significantly by9.5 percent to 15.3 million tonnes, on account of expanded matured areasand improvement in yield per hectare as well as higher palm oil extractionrate.

CPO is likely to trade at a moderately high average price of RM1,400 pertonne.

Meanwhile, total rubber production is expected to decline by two percentto 1.14 million tonnes this year with decreasing planted area due toconversion of rubber plantations to other more lucrative and lesslabour-intensive economic activities, mainly oil palm.

To overcome this situation, the government encouraged the wider use of LowIntensity Tapping System and adoption of higher yield rubber clones aswell as continuation in rubber replanting programmes.

The fishing sub-sector, comprising marine landing and aquaculture harvest,is expected to decline by 0.4 percent mainly due to lower landings ofmarine fish.

Despite the declining output, this sub-sector, however, continues toaccount 12 percent of the overall agriculture sector's value added in2005.

The Treasury said the government has issued more deep-sea fishing permitsand provided training for fishermen to further develop this sub-sector.

Other agriculture, comprising livestock, cocoa, paddy and miscellaneousagriculture, is envisaged to expand by 4.7 percent and contributes toalmost one-third of total value added in the sector.

Value-added of miscellaneous agriculture, which includes fruits,vegetables, flowers, pepper, pineapples, copra, tea and tobacco, isexpected to increase by 4.5 percent this year due mainly to higherproduction of fruits and vegetables.

-- BERNAMA