PUTRAJAYA, March 20 – There is a pressing necessity to rejuvenate the agri-food sector as excessive dependence on external sources becomes increasingly unsustainable, says Bank Muamalat.
At the same time, the depreciating ringgit had worsen food price inflation, resulting in decreased purchasing power, particularly for the low-income individuals.
“As of January 2024, the food and beverages price index was at 153.5 points, while the general price level, represented by the consumer price index, stood at 131.4 points.
“This indicates that elevated food prices may diminish purchasing power, particularly impacting the low-income demographic, as they typically allocate a larger portion of their budget to food-related expenses,” said the bank’s research team led by chief economist Dr Mohd Afzanizam Abdul Rashid.
The bank shared four recommendations for future actions namely rebranding the agricultural sector, having awareness campaign on the government supports for the agri-food sector, establish regulatory oversight and policy coherence and coordination.
“While boosting production remains a primary focus, establishing fair, transparent and regulated markets for agri-food products is equally crucial.
“This is essential to ensure that farmers’ incomes rise proportionately with their productivity, while consumers benefit from quality, consistently supplied foods at reasonable prices,” it said.
The government has established the National Agro-Food Policy 2021-2030 (DAN 2.0) to boost the economic impact of the agricultural sector on the country’s economy.
This enhancement would be measured through various indicators such as the sector’s share in the national gross domestic product, the average yearly increase in value-added growth, the compound annual growth rate (CAGR) of the food trade balance and the reduction in food wastage.
The sector’s contribution to national gross domestic product, according to DAN 2.0, is projected at 3.6 per cent in 2025 (2019:3.5 per cent) and 4.3 per cent in 2030.
The policy had set food trade balance CAGR to recover to 2.8 per cent in 2025 (2019: -6.7 per cent) and to 2.9 per cent in 2030, while average annual value-added growth to improve at 4.5 per cent in 2025 (2019: 3.1 per cent) and 5.0 per cent in 2030.
