The Budget provision for agriculture development clearly shows the important role of the Ministry of Agriculture and Industries in implementing various programs, projects, and strategic and targeted initiatives to strengthen food security country throughout the period of economic recovery which is expected to be more challenging in the coming years.
Overall, the Government has allocated as much as RM5.32 billion to MAFI including operating expenses (OE) amounting to RM3.78 billion and development expenditure (DE) of RM1.54 billion. This is notably an increase of 10.4% compared to 2022.
For OE, the MInsitry has received a total of RM1.8 billion under the program specifically to continue providing subsidies and incentives for the rice and fishing industry. This approved allocation has been increased by RM500 million compared to the year 2022 which also includes an allocation of RM1.62 billion for seed, fertilizer, and rice price subsidies including huma rice fertilizer subsidy. In addition, for fisheries, the government has allocated RM178.2 million for incentives. This allocation is higher taking into account factors such as the expected increase in rice production by 2 million metric tons following the implementation of SBB’s SMART Program. Through the management of rice fields on a large scale, seed requirement of 72,000 metric tons is needed to cover the contingency situation of natural disasters such as droughts and floods, increased world raw material market prices due to the impact of the COVID-19 pandemic and the Russia-Ukraine geopolitical conflict and estimates increase in the price of agricultural inputs such as fertilizer between 30 to 40.
For DE, the approved allocation increased by RM2 million compared to 2022. Basically, MAFI’s focus in Budget 2023 has been translated through several initiatives which are given emphasis among them is the Agrovest investment program by Agrobank to provide start-up funds to modern technology agricultural start-ups with RM250 million in funds. Special assistance to rice farmers at a rate of RM200 per month for a period of three months or seasonally to 240,000 farmers with an allocation of RM228 million.
Other notable projects include the development of agro-food sustainability with an allocation of RM56 million such as livestock feed production by using black soldier fly, the Introduction of an Agricultural Protection Scheme to protect agricultural entrepreneurs from any out-of-control risks such as weather, disease, and pests starting with rice paddies; and the extension of the tax incentive period for food production projects up to the end of 2025.
BNM has also set aside RM1 billion under the Agrofood Financing Scheme loaned at a rate of 3.5% and the Government Loan Fund of RM10 billion through BNM to small companies and moderate in particular to encourage automation and digitization activities.
Overall there are multiple projects, incentives, and programs lined up for the agriculture sector in order for it to thrive and expand while at the same time playing a vital role in securing the nation’s food source.
The Ministry as a leader in the national food security agenda will continue to play important role in implementing the 2023 Budget efficiently to ensure continuity activities along the agro-food chain and sub-sector so that the people continue to get adequate, safe, and nutritious food supply. The initiatives that have been announced through the 2023 Budget are also in line with the aspirations of the Policy National Agrofood 2021-2030 (DAN 2.0) and Food Security Policy Action Plan 2021-2025 to ensure that the country’s food supply remains guaranteed no matter what situation.
MAFI through the 2023 Budget said it will continue to prioritise the interests and well-being of socioeconomics of all target groups including rice farmers, farmers, breeders, fishermen, and agro-food entrepreneurs. The frontline role of the country’s agro-food sector will contribute to national economic growth in line with the responsive Budget 2023 agenda, responsible and reformist.
