January 25, 2023


Malaysia's livestock industry needs government  incentives to stay strong, say analysts



Government incentives are important to strengthen Malaysia's livestock industry as it plays a major role in sustainable food systems, according to analysts.


Sunway University Business School professor and economist Dr. Yeah Kim Leng said on top of providing better incentives, the government could also consider giving support services and complementary infrastructure to accelerate private investments in the livestock industry.


He added that these include breeding research and development (R&D), feedstock import substitution and modern integrated production systems that harness digital technology advances in livestock farming.


According to Yeah, the livestock industry's value-added output in 2021 amounted to RM19.1 billion (US$4.5 billion) in current prices or RM16.5 billion (US$3.9 billion) in constant 2015 prices.


"Given the government's focus on food security and the high meat imports, the prospects for achieving higher growth than the 3.6% per annum is good," he told The Malaysian Reserve (TMR).


Yeah opined that the development and upside growth potential of the livestock industry in Malaysia continue to be moderated by several key challenges over the past years including low capital investment, rising labour cost and manpower shortages, high feed and input cost inflation, and more breeding and extension services for small farms, especially for the cattle industry segment.


Centre for Market Education chief executive officer Dr. Carmelo Ferlito concurred that the government should consider providing better incentives to further strengthen the domestic livestock industry.


He added that the main thing the government should do for poultry specifically is to liberalise prices, as current price controls are making inflation worse and keeping production at bay.


"More generally, the government should lift labour regulations," he told TMR. "For non-poultry livestock, the main intervention should be facilitating the encounter with foreign technology for upgrading the non-poultry livestock sectors."


Dr. Ferlito added that the livestock industry is very heterogeneous, but it can be said that the strongest part of the industry is the poultry industry.


He noted that the industry is the only sector that is self-sufficient in terms of production for domestic consumption.


According to Dr. Ferlito, the main challenges in the industry are mostly the consequences of the lockdowns due to the pandemic, as well as rising raw material costs, labour restrictions and price controls.


"More or less, the livestock industry accounts for 10% of the agriculture contribution to GDP and poultry is around 60% of that 10%," he said. "The future will be in the direction of further consolidation so that economies of scale can favour industry growth in the direction of technical progress."


According to the Department of Statistics Malaysia, the production of chicken or duck eggs recorded an increase of 5.6% in 2021 to 839.7 thousand tonnes compared to 795.5 thousand tonnes in the previous year.


On the other hand, livestock production for beef, mutton and pork declined by the double digits of 11.1%, 10.6% and 10.5%, respectively.


Landings of marine fish in 2021 were 1,328 thousand tonnes, which decreased by 4% compared to 1,383 thousand tonnes in 2020.

- The Malaysian Reserve

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