Food for thought

As the world moves towards adopting environmental, social and governance (ESG) factors in investing, food security forms an essential part of the dynamics:

• Environmental factors affect the food availability,
• social issues could arise due to lack of food intake and nutrition, and
• governance plays a key role in providing food security.

Addressing food insecurity is crucial as it can lead to a decline in productivity, demographic change, slowdown in economic growth, and political instability. Like many emerging economies, Malaysia also faces issues related to food insecurity, which impacts its economy and social well-being. Below is an outline of the challenges facing Malaysia’s food security and a look at how public-private partnership (PPP) and technology could be a source of solution to it.

Challenge 1: Import dependency

Self-sufficiency in food matters

Malaysia is not self-sufficient in many food items. According to analysis by the Franklin Templeton Institute, Malaysia relies 80-85% on imports of supply food to the population¹. However, the reality on the ground is far more nuanced as part of the high dependency of food importation is by-design from the government’s policy.

• The focus of the government has been on the production of food staples, predominantly rice. Nonetheless, the import dependency lies at 50% for rice as of 2020² versus the government’s target of being 70% self-sufficient by the year 2020.

Given the risks in climate change, economic slowdown and geopolitical conflicts, it would be prudent to reduce dependency on imports or at least diversify the import partners as protectionism may increase.

Challenge 2: Nutritional intake

Long distance towards a healthy nation

With a rising consumer class due to rising disposable income and a growing population, Malaysians are demanding a greater variety of foods not found within Malaysia itself, and nutritional intake has increased with wide ranging implications for health.

• It is estimated that 1 in 5 adult Malaysians are living with diabetes,
• 1 in 3 are living with hypertension, and
• nearly half are overweight or obese³.

Challenge 3: Food wastage

Want not, waste not

Not only are Malaysians eating more, but food waste is also an issue. According to Solid Waste and Public Cleansing Management Corporation (SWCorp) in Malaysia, the nation wastes about 17,007 tons of food per day, of which 24% is edible wastage (an amount that can feed around 3 million people three times a day⁴. Food wastage takes place at different levels of the food supply chain, from:

• agricultural production,
• storage and transportation,
• to processing, distribution, and
• the consumer.

For instance, poor harvesting techniques or left-over eatables on the fields during agricultural production accelerates the demand for wastage systems.

Indeed, it is not an issue unique to Malaysia as governments from neighbouring countries also attempted to address food wastage at various stages of the supply chain. China’s government, for instance, launched a “Clean Plate” campaign in August 2020 to increase awareness and prevent its people from wasting food. While, in India, about 40% of food is wasted due to inefficient logistics, according to the National Agricultural Cooperative Marketing Federation. The Indian government introduced a new policy called “National Logistics Policy” in September 2022 to improve transportation, aiming to save time and money.

Challenge 4: Agri-workforce decline

Agri-workfore should not be “work by force”

Malaysia is also struggling to entice a new generation of workers to the agricultural sector. Between 1991 and 2019, Malaysia’s agricultural workforce as a share of the total workforce declined from 22% to 10%⁵.

• About 30% of the agricultural workforce are low-skilled that work in elementary operations⁶, potentially posing a challenge for the adoption of agricultural technology for food production.

Challenge 5: Climate change

A destabilising risk

Like many countries in the region, Malaysia is already feeling the effects of climate change such as flooding that affects crop yields, which in turn, impacting the food bowl, including the production of staples like rice.

• It’s estimated that Malaysia’s rice yield will decrease by 12% in the main season and 31.3% in the off-season until 2030 as temperatures
  increase and precipitation patterns change⁷.

This has a ripple impact on the prospects of Malaysia’s food exports. For example, the US has restricted the importation of shrimp from Malaysia after the US authorities found antimicrobial contaminated shrimps.

Key to a more food-secure nation

Public-Private Partnership (PPP)

Greater collaboration and cooperation across government agencies, research institutions and the private sector can contribute to building a successful strategy towards a more food-secure nation. Improving food production, imports and logistics through technology would help build resiliency. A lot of technological development takes place with the involvement of private companies, potentially providing attractive investment opportunities.

These “digital natives” would help agriculture move up the value chain by embracing high-tech farming involving the use of sophisticated and integrated platforms, such as robotics, fertigation (combining fertilisation and irrigation), the use of new technologies to monitor production, harvesting and sorting of crops and the introduction of lab-grown and plant-based meats. For instance, the introduction of flood-tolerant rice in India has increase in rice production in this flood-prone nation⁸. 

In essence, PPP enables the players within the food security ecosystem to converge and collaborate, and the investor as an enabler in providing funding resource for investments in food security-related technologies towards building a resilient food security system for the nation.