A much needed transformation of the agriculture sector received a boost with the Malaysia Digital Economy Corporation and CIMB Islamic Bank Berhad joining to extend an extensive micro-financing programme with an allocation of RM10 million with a potential addition of another RM15 million to catalyse Digital Agriculture Technology (Digital Agtech) in Malaysia.
MDEC, which has been already working on digitalising the agriculture sector, via a public-private partnership with the Pertubuhan Peladang Kawasan Kuala Langat (PPKKL), initiated a pilot project in 2018 to spur yield and quality of crops utilising the latest technologies. It has seen farmers adopting an Internet of Things (IoT)-enabled fertigation system that helped them reduce monthly fertiliser usage by 20 percent, lower monthly manpower requirements by 25 percent and increase the overall quality of yield (Grade A chilies) by up to 90 percent.
The culmination of this joint-effort, the MoU signed today with CIMB Islamic, will enable this initiative to go nationwide at scale and thereby contributing to the nation’s food security and sovereignty. The facility will lower the access barrier for Malaysian farmers to embark on the digitalisation journey and spur the growth of the agriculture sector for overall improvement, advancement and optimisation.
Current key Digital AgTech initiatives, such as the eLadang programme, had successfully benefitted 548 participants as of December 2019. Of this, 78 farmers have utilised digital farming technology, leading to 20 percent increase in productivity and 30 percent income increment as well as a reduction in operating cost by 30 percent. Three digital labs were also formed to train, certify and drive digital technology adoption in farming.
This will further provide access to farmers who can tap into next-gen technologies like IoT, Artificial Intelligence (AI) and Big Data Analytics into real world farming.
Access to funding will determined by CIMB Islamic which will in turn offer affordable profit rate in agricultural financing facilities at 3.5 percent per annum. This low rate will not only benefit the current crop of farmers but also encourage more youngsters to break into this business.
With the proliferation of the use of digital technology in the agriculture sector, an estimated 30 percent increase in job opportunities will be created by 2025 in this sector. Wide usage of Digital AgTech will also drive more youths into this sector, most of whom will be needed to manage and run these innovations. Under the MDEC eLadang pilot project, 70 percent of 548 participants trained up to December 2019 in Digital AgTech hail from the Under-40 age group.
It will also serve to encourage more youngsters to till this field and form the next crop of Malaysia’s agricultural industry. The support enables farmers to go digital and further reinforces the potential opportunities that the agriculture sector offers, especially with talent up-skilling and digital growth. This is certainly complementary with the Agrofood Value Chain Modernisation Programme that had been introduced in Budget 2021,” added YB Datuk Seri Dr Ronald Kiandee, Minister of Agriculture and Food Industries.
“The support from MDEC and CIMB is vital for farmers and the agriculture sector. When we launched the Digital Agtech pilot programme with MDEC, the goal was to ensure technology is easily accessible to PPKKL farmers. Four years on, we not only see more farmers embracing these new innovations, but youths also joining the industry as they see the opportunities and growth potential that this sector has to offer. The support to digitalise agriculture enables farmers improve their operational processes expand their digital capabilities and update their current skillsets,” said Haji Dr Abdul Razak Kasbollah, Chairman, PPKKL.
Through this partnership, MDEC and CIMB Islamic will continue to advocate and validate digitalisation across the agriculture sector. This includes engaging and further enabling the supply and demand ecosystems; key stakeholders; industry players; as well as end-users and consumers within the entire marketplace.