Application of Mechanization Technology in Malaysia’s Agriculture Sector

Application of Mechanization Technology in Malaysia’s Agriculture Sector

Published: 2023.06.13
Accepted: 2023.06.09
Economic and Social Science Research Centre, Malaysian Agricultural Research and Development Institute (MARDI)
Malaysian Agricultural Research and Development Institute (MARDI)
Economic and Social Science Research Centre, Malaysian Agricultural Research and Development Institute (MARDI)
Faculty of Economics and Management, Universiti Putra Malaysia
Former Director
Strategic Planning and Innovation Management Centre, Malaysian Agricultural Research and Development Institute (MARDI)


This article discusses the application of modern mechanization technologies in Malaysia's four industries (paddy, pineapple, oil palm, and rubber). The application of modern mechanization technologies in the agriculture sector in Malaysia is moderate. Almost all farmers in these four industries utilize modern farm mechanization before the cultivation of crops. Paddy production is fully mechanized, from land preparation to yield harvesting. On the other hand, the application of mechanization technology in oil palm and rubber smallholder farming is low. Most activities in farm operations are either semi-mechanized or carried out manually.  The Malaysian government aspires to intensify the application of modern mechanization in the agriculture sector to reduce labor dependency and increase farm productivity. The government sets many strategies to encourage farmers to utilize modern mechanization technologies. A new agriculture policy emphasizing the modernization of the agriculture sector was launched in 2021. In this new policy, the government provides special financial assistance for small and medium enterprises (SMEs) who want to invest in modern mechanization technology and intensifies R&D&C&I of appropriate modern mechanization technology from a government research institution to private firms. The government hopes that modern mechanization technology will transform agriculture into a more dynamic and prosperous sector.

Keywords: Modernization, agriculture sector, mechanization technology, sustainable agriculture


Modern mechanization technology plays a significant role in Malaysia's agriculture sector development. These technologies transform agriculture into a more dynamic, efficient, and productive sector. However, there are challenges in applying modern mechanization technologies because the majority of the players in  the agriculture sector are smallholder farmers. In Malaysia, the agriculture sector is dominated by smallholder farmers, who face the problems of low productivity and lack of workforce. Generally, farmers in Malaysia owned small areas of land that needed economies of scale for food crop cultivation. For example, the average farm size for paddy is 1.06ha, fruits (0.67ha), vegetables(1.01ha), cocoa (1.07ha), coffee (1.07ha), coconut (0.93ha), oil palm (1.84ha) and rubber (1.6ha) (DoSM, 2005). Many reports and industry experts have observed that this sector needs modernization. Smallholder farmers need to be more capable of investing in modern mechanization technologies. Smallholder farmers may opt for more traditional farming methods owing to the investments required to adopt modern agriculture. Their take-home income from venturing into agriculture activities is only sufficient for their livelihood expenditure and to sustain the farming business.

In Malaysia, agriculture is generally divided into agro-food and industrial crops. Agro-food refers to vegetables, fruits, root crops, grains, livestock and fisheries. More than 80% of farmers in agro-food are categorized as smallholder farmers. On the other hand, industrial crops refer to oil palm, rubber, tea, and other crops associated with large estates managed by corporations. Most agricultural land is devoted to oil palm. Overall, 64.8% of planted area of the main crop is under the estate, and 35% is under independent smallholders. Around 76.1% of the 7.5 million hectares total planted areas are cultivated with oil palm and rubber (13.2%). The estate sector concentrated on the plantation of oil palm, while smallholders dominated the other food crops.

Malaysia aims to modernize the agriculture sector by applying mechanization technologies. The focus is to improve productivity, increase farmers' income and enhance national food security. Using mechanization technologies can increase the quantity and quality of crop yield, thus increasing productivity. The application of mechanization technologies also supports the national development agenda.

However, the application of modern mechanization technologies among farmers in Malaysia still needs to be solved. The government's aspiration to modernize the agriculture sector needs to balance the challenges faced by the farmers. The country's physical condition is different from other developed countries. For example, the land condition is one of the challenges in applying farm mechanization technologies. Furthermore, the nature of small-scale farmers with less financial capital is another critical challenge to investing in modern mechanization technology. They require financial assistance and support from the government to purchase farm machines.

This paper discusses the current scenario of agriculture farming in Malaysia, focusing on applying mechanization technology among farmers in four industries, paddy, pineapple, rubber, and oil palm. This paper highlights issues and challenges in the modernization of agriculture in Malaysia and how the government strategizes this effort to ensure that the government's aspiration is achieved successfully.


The application of farm mechanization in Malaysia is relatively new. Before its independence in 1957, most farmers in Malaysia used animal power, which slowly evolved to two-wheel tractors, and later moved to four-wheel tractors. Commercial or estate plantations mostly use advanced mechanization technology in their operating systems. However, smallholder farmers still moderately used modern mechanization technology. A study conducted by the Ministry of Agriculture and Food Security in 2018 revealed that more than 85% of agro-food farmers in Malaysia owned small mechanization technology valued at less than RM10,000 (US$2,220) (MAFS, 2020). This study implied that smallholder farmers still carry out their farming activities by the semi-modern method. They utilize farm mechanization technologies while doing it manually in other activities.

Mechanization technologies are mainly used before crop cultivation. Farmers engaged service providers to carry out pre-production activities, such as cutting down forest trees, clearing land, leveling the land surface/ground, and building drainage systems. Service providers usually use bulldozers or high-power machines to carry out these activities. Land preparation for industrial crops is carried out only one time, before the cultivation of the trees. On the other hand, land preparation for agro-food crops is carried out in the early stage of the production season. It occurs more than once a year. For example, land preparation for the paddy industry is carried out twice a year. In comparison, land preparation for vegetable cultivation is carried out more than three times a year, depending on the crop's variety and duration from cultivation until harvesting.

There are many issues and challenges concerning the application of mechanization technology among farmers in the agro-food sector. Automation in the agro-food sector remains low as smallholder farmers tend towards traditional farming methods due to a lack of financial assistance and knowledge transfer. Smallholder farmers need more capital to purchase mechanization technology. Their income from farming activities is only sufficient for daily expenses, and saving is used to start their subsequent farming activities. On the other hand, technology transfer is a slow process, especially if it involves many recipients. In the first stage, technology is transferred from a government research institution before it is disseminated to farmers through extension agents. Technology is transferred through seminars, workshops, farmers' training, and site visits by the extension workers.

Farm size and land ownership are the other issues concerning mechanization technology. Most agro-food farms in Malaysia are inherited from parents to children. When the landowner dies, the land ownership is divided among the children, and as a result, the farm size becomes smaller. At the same time, some farmers own farms in different areas. Thus, the farms are scattered from one place to another. These small-size farms are not economical for big-size machines. At the same time, the machine operators are reluctant to operate in different areas because it will incur more cost of transporting the machine. 

Most farmers in Malaysia are old and prefer the traditional method of farm cultivation. The average age of farmers in this country is over 55 years old, with older farmers reluctant to accept change, less inclined to promote diversification activities or diversify production, and less able to use new technology. The number of youths involved in farming activities is also small and reducing. Statistics show that around 14% of youths participate in agriculture activities in Malaysia. They are reluctant to be involved in this sector because they perceive that agriculture is a 3D job or dangerous, dirty, and demeaning. A study by Fara Adila et al. in 2012 revealed that among the pull factors that discourage youths from being involved in agriculture are: agriculture is a risky venture activity (33.1%), the jobs are not glamorous and looked down upon (20.8 %), and the jobs are not fun and tiring (16.3%). The above findings indicate that youths have a good view of agriculture if it can be handled correctly with a good desire. The application of modern mechanization technology is one of the factors that can attract youth to participate in this sector.

The government recognizes that using mechanization technologies will improve production efficiency and reduce the dependency on labor. The application of farm mechanization technology in selected industries is discussed as follows:

Paddy industry

Paddy is Malaysia's third most important commodity, in terms of land use, after oil palm and rubber. More than 681,560 hectares of land are cultivated with paddy, involving more than 322,830 farmers. Paddy cultivation is carried out by smallholder farmers, of which the average cultivation area is 2.1 hectares per farmer. Paddy cultivation is carried out in granary and outside granary areas. Currently, there are twelve paddy granary areas with more than 416,000 hectares. The list of granary areas is presented in Table 1.

Malaysia produces more than 1.83 million tons of paddy yearly, equivalent to around 1.2 million tons of rice. At the same time, Malaysia requires more than 2.4 million tons of rice every year. As a result, Malaysia imported more than 1.2 million tons of rice valued at more than RM2.36 (US$0.524) billion in 2021, of which 80% is white rice, and 20% is specialty rice such as basmati, fragrance rice, parboil, and Japonica rice.

Most paddy farmers in Malaysia know the roles of modern mechanization technologies in modernizing the paddy industry. They received information on modern mechanization technologies from extension officers of government agencies or sale persons in the private sector. About 40.6% of farmers were introduced to mechanization technologies by extension officers from the Farmers’ Organization Authority (FOA) because they work closely with them. They also received information from the Department of Agriculture and other sources such as social media and printed materials.

However, the application of modern mechanization technologies among paddy farmers in Malaysia is moderate. Despite the high application of modern technology in the industry, about 95.7% of farmers use technology moderately. Most farmers have small types of machinery, such as small tractors, boom sprayers, and grass cutters. Farmers cannot afford to invest in large farm machineries. Service providers generally carry out almost all paddy production activities, from land preparation to harvesting. Two types of service providers exist: independent private firms and Farmers’ Cooperative. The independent private firm is owned by farmers or entrepreneurs from the local areas or other areas in Malaysia. On the other hand, the Farmers’ Cooperative is an organization established under the Cooperative Act and provides services to its members in certain regions.

Generally, service providers for the paddy industry are fully established in Malaysia. It is estimated more than 1,000 service providers are established, and they offer the service in land preparation, seedling transplanting, pest management, grass cutting, fertilizer application, and harvesting. They owned modern mechanization technologies such as small and large tractors, paddy seedling transplanted machines, boom sprayers, drones for fertilizing and pesticide sprayers, and small and large harvesting machines.

Paddy cultivation is monitored by the Department of Agriculture and the Department of Irrigation and Drainage because most of the cultivation areas are irrigated. Farmers received water on a schedule provided by the departments. Hence, the service providers can provide the machinery services according to the irrigation schedule. Despite aiming to transform the paddy industry through modern mechanization and technologies, the government needed to provide more financial incentives. The government only provides a subsidy for farmers using tractors during land preparation. The government provides a subsidy of RM100.00 (US$22.20) for every hectare of land ploughed using tractors. In other words, the wider the planted area ploughed by tractor, the more they receive financial subsidy from the government.

The application of modern mechanization technologies is motivated by higher productivity and efficiency in cultivation practices. At the same time, the lack of workforce or labor is another factor that leads farmers to use mechanization technologies supplied by service providers. Most farmers in the paddy industry are willing to invest in modern mechanization technologies if they get support from the government or the Farmers’ Cooperative.

Pineapple industry

Pineapple is one of the most popular fruits in Malaysia. Pineapples are always available due to the short production period of 13-15 months after planting. Pineapple is non-seasonal fruit that can be cultivated all-year around. Pineapple is classified as one of the primary fruits by the MAFS because of its great potential for the income of farmers and the country. The country's pineapple exports recorded RM490.00 (US$108.90) million in 2019 compared to RM343.00 (US$76.20) million in 2018.

Estate plantations and smallholder farmers carry out pineapple production. Smallholder farmers cultivate approximately 80% of the pineapple growing area. The average age of pineapple farmers is 43, and most received secondary and tertiary formal education. The average pineapple cultivation area is 4.2 hectares. Farmers cultivated approximately 35,000 pineapple plants and obtained over 33,850 pineapples per season. This venture resulted in a monthly income of RM12,830.00 (US$3,207.50).

Malaysia can produce over 400,000 tons of pineapples, valued at over RM500.00 (US$111.10) million annually. The higher demand from local and export markets is a great opportunity for Malaysia to expand the pineapple industry. Although the demand for pineapples continues to increase due to increased demand from local and international markets, Malaysia can only slightly increase production. Lack of workforce is one of the main factors that constrain the increase in productivity of pineapple production in Malaysia. Reliance on foreign labor is also limited because the government restricted the entry of foreign labor after the COVID-19 pandemic.

Pineapple is a labor-intensive industry, especially during harvesting. Most farmers use mechanization during land preparation. Farmers use small machinery such as two-wheel tractors to plow, harrow, level the land, make drainage for irrigation and make beds. Small machinery is used because most pineapples are planted in peatland areas. Farmers used larger or heavy machinery in mineral soil areas. The service providers supply farm machinery and workers. On the other hand, farmers use small tools when maintaining the farm area, such as cutting grass and maintaining the beds. Most farmers own small devices such as boom-sprayers and grass cutters, which they use for fertilizing and spraying herbicides and fertility hormones.

Venturing into pineapple cultivation is profitable for farmers. More efficiency in planting activities and farm management will increase farm productivity. Farmers are aware of the importance of modern mechanization technology in increasing the efficiency of pineapple production. Therefore, most farmers in this industry are willing to invest in purchasing machinery that suits their farm conditions.

Oil palm industry

The oil palm is the most efficient oil-bearing crop in the world. This is due to its abundance yield per ha, ability to produce more than one type of vegetable oil (i.e., palm oil from the mesocarp and palm kernel oil from the kernel), and long economic lifespan. Malaysia is one of the largest producers and exporters of palm oil in the world, accounting for 11% of the world's oils & fats production and 27% of the export trade of oils & fats. The oil palm trees planted are mainly the tenera variety, a hybrid between the dura and pisifera.

Palm oil production is vital for the economy of Malaysia, which is the world's second-largest commodity producer after Indonesia. More than 4.9 million hectares of land were cultivated with oil palm producing 17.73 million tons of palm oil and 2.13 million tons of palm kernel oil in 2020. In 2020, the export volume of palm oil in Malaysia totaled approximately 16.21 million tons. That year, palm oil's export value was about RM45.6 (US$10.13) billion.

Around 47% of oil palm cultivation is operated by smallholder farmers, while the balance is by estate plantation. The crop's productivity depends on tree species, soil type, climatic conditions, oil palm plantation management, and cultivation practices. The cost of inputs during the first thirty months (before the first harvesting) are rewarded with up to 25 tons of fresh fruit bunches per ha in mature trees.

The mechanization of oil palm plantations is characterized by using heavy equipment to support plantation operations, starting from land preparation, planting, and maintenance to harvesting palm fruit bunches (FFB) to processing or palm oil mills (PKS). Most smallholder farmers used mechanization during land clearing and land preparation. They also used small machines such as grass cutters to clean up their farm and boom sprayers to fertilize trees. Harvesting involves cutting the bunch from the tree and allowing it to fall to the ground by gravity. The tree trunk is cut into pieces, and the fruits are removed by hand using a chopper. Farmers are reluctant to use harvesting machines because they slow down the process.

Modern mechanization technologies are required in the oil palm industry to increase productivity. Mechanization can be the right policy, especially in harvesting and farm maintenance activities. However, generally, farmers are not ready to invest in modern mechanization technologies because they are not convinced that mechanization can solve workforce issues, especially in harvesting fruits. 

Rubber industry

Natural rubber is an important commodity that generates national revenues in addition to palm oil, wood, cocoa, pepper, and fruits. Apart from being used domestically in the glove, tire, and tube industries, rubber threads, and others, the natural rubber produced by the country is also exported to other countries. Malaysia is one of the world's top 10 major natural rubber producers. More than 1.1 million tons of natural rubber are exported abroad annually. The export value of natural latex was RM23.7 (US$5.26) billion in 2018. Currently, Malaysia contributes 4.3% of the 13.8 million tons of natural latex produced by the world's producing countries. China continues to remain the leading export destination for natural rubber, contributing 40.5% of the total exports in 2021, followed by Belgium (12.6%), Germany (8.4%), Finland (3.9%), and the United States (2.7%).

In 2020, approximately 846,400 hectares of rubber plantations were recorded across Malaysia, producing over 469,700 tons of latex. Smallholder farmers operate around 90% of rubber plantations. In comparison, the plantation companies use the balance of 7.2%. This situation remains a major concern for the industry as these smallholders tend to move to other economic activities if rubber prices fall.

Using mechanization technology in rubber plantations can reduce the dependence on labor. Mechanization technology can increase the productivity of production as well as save labor costs. Using mechanization and automation, smart farming systems, IoT applications, and drones can attract the interest of farmers and young people, thus increasing production productivity with efficient management. The presence of the young generation will fuel the profile of the agriculture sector as a dynamic, modern sector and become a new source of wealth for the country compared to other economic sectors. However, farm mechanization is applied during land preparation and farm maintenance. Even though the Malaysian Rubber Board, the research institution mandated for developing the rubber industry in Malaysia, introduced the automatic tapping machines, most farmers prefer to use the conventional method (tapping knife) when collecting and processing latex. At the same time, farmers are also refused to use modern mechanization technology that can speed up latex collection and maintain the farm.


The government of Malaysia recognized that modern technologies are the catalyst for the development of the agriculture sector in the country. The Ministry of Agriculture and Food Security (MAFS) aspires to transform agriculture into a dynamic, progressive, and modern industry by applying modern technologies. The government sets many strategies to encourage farmers to use mechanization technology in farming.

New policy on farm mechanization technology

The MAFS launched a new National Agrofood Policy 2.0 (NAP 2.0) in 2021 that focuses on the modernization of the agriculture sector through smart agriculture, improving farm productivity, enhancing food security, and improving the socioeconomic of farmers. This policy covers a period between 2021 and 2030. This policy provides a new direction and strategies to transform and modernize the agriculture sector into a high-income and sustainable sector. Under the policy thrust 1 (Embrace modernization and smart agriculture), the government aspires that the use of technology can contribute to an increase in the quality and quantity of crop yield and, thus, increase farm productivity. The government sets the following strategies to achieve the policy thrust 1:

  • Intensifying research & development & commercialization & innovation (R&D&C&I) in catalyzing modernization of the agro-food sector by increasing both fiscal and non-fiscal resources for R&D&C&I of the industry, reducing the time taken for intellectual property certification process and intensify international knowledge exchange;
  • Increase adoption of technology and automation in the agro-food sector through the provision of assistance on improving the feasibility and ease of technology adoption and enhancing the capacity of food process;
  • Create a conducive ecosystem for R&D&C&I by strengthening the working relationship among entities; and;
  • Intensify innovation programs and activities to support advancement in agrotech by strengthening the link between basic research output with industrial application, to increase the rate of contribution by R&D&C&I towards modernization of the agro-food sector.

Government financial assistance for small and medium enterprises (SMEs)

Smallholder farmers are always associated with poverty and need more financial assistance. They require assistance from the government to purchase a small-size machine for their farms. The government realizes this issue and provides some assistance as follows:

  • Allocate RM2.0 (US$0.444) billion for the agro-food facility scheme. The agro-food facility scheme is an initiative to finance SMEs to increase agro-food production for domestic consumption and export. This scheme aims to provide financial assistance for capital expenditure, working capital, and the development of the agro-food project. The financial assistance is channeled through commercial banks such as Bank Simpanan Malaysia, Agrobank, and CIMB Bank. The SME can apply for a loan of up to RM5.0 (US$1.1) million and pay back up to eight years. The interest for this loan is less than 3.75% per annum.
  • Financial facility by Agrobank. Agrobank Malaysia offers Islamic machinery and equipment financing (MAEF-i) to finance the purchase of agricultural and manufacturing machinery, equipment, or utility vehicles for direct or indirect food production, processing, and marketing of agricultural and agro-based products. Farmers, land owners, machinery and equipment operators, and entrepreneurs in the manufacturing sector are eligible to apply for this financial assistance. 

Intensify the development of farm mechanization technology and technology transfer

The Malaysian Agricultural Research and Development Institute (MARDI) is one of the largest government research institutions, and it is mandated to generate technologies to enhance the agriculture sector in Malaysia. One of the research areas in MARDI is the development of farm mechanization technologies that can improve farm activities, including land clearing, land preparation before cultivating the crops, farm maintenance, and harvesting the yield. MARDI has developed many farm mechanization technologies or modified imported farm machinery to suit the local land condition. The example of farm mechanizations designed and developed by MARDI are as follows:

  1. Farm mechanizations for paddy cultivation, such as tractor equipment for land leveling, seed sowing, fertilizer application, and liquid chemical spraying device.
  2. Pineapple farm mechanization for mineral and peat soil such as hormone spraying equipment, pesticide/herbicide spraying device for large scale farms, and harvesting device for peat soil.
  3. Watermelon farm mechanization, such as the machine for seedling preparation, fertilizing and irrigation system, and harvesting aids.
  4. Low-land cabbage farms mechanization such as a device for crop fertilizing, machine for seedling preparation, drone for fertilizing and pesticide management, and cabling system for transporting cabbage from farm to collection center.
  5. Sweet potato farm mechanization such as the device for bed forming, organic fertilizer application device, seedling transplanting device, weeding, pruning, and harvesting device.

The application of farm machinery has improved operational activities between 86% and 416%. The application of farm mechanization also reduced the operation cost. For example, farm mechanization has reduced around 80.8% of the operation cost of pineapple production, from RM 4,095.00 (US$910.00) to only RM783.77 (US$174.00) per hectare. 

MARDI also intensified technology transfer to smallholder farmers by conducting farm mechanization training courses at MARDI Training Centre and promoting farm mechanization technology to farmers. MARDI always carried out a pilot project at farmers’ farms to show them how mechanization technology can speed up farm operation activities. 


The application of modern mechanization technology among smallholder farmers in Malaysia is moderate. Different industries applied farm mechanization differently. The majority of farmers utilized farm mechanization technology before the cultivation of the crop. They use farm mechanization such as two or four-wheel tractors for land preparation, land leveling, and drainage system. The paddy industry is the most mechanized farm operation, from land preparation to yield harvesting.

On the other hand, smallholder farmers in the rubber and oil palm industries utilized the least farm mechanization technology. Farmers in the agro-food sector are more inclined to invest in modern mechanization technology, while farmers in the agroindustry sector are reluctant to invest. The government encourages farmers to adopt modern mechanization technology as this effort will transform the agriculture sector to be more dynamic and prosperous.


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