ABSTRACT
Rural communities are always associated with backward economic activities and traditional ways of life. Despite representing around 25% of its population, the rural community is essential to Malaysia’s economic development. The rural areas are a source of food through its agrofood industries, such as paddy, fruits and vegetables, and source of income by exporting agro-industry commodities such as palm oil, rubber, and cocoa. Rural development has been rapidly carried out in Malaysia. Many infrastructures have been developed and many programs and projects have been carried out to benefit the people. However, the income gaps between rural and urban community are still large and imbalanced. The Malaysian government aspires to transform the rural areas into dynamic, prosperous, modern regions. The government applied and transferred technologies in all programs and projects as strategies to speed up rural community transformation. These strategies resulted in a more progressive development of rural areas in Malaysia.
Keywords: Rural development, transformation, technology, innovation
INTRODUCTION
Rural communities are often associated with poverty due to lack of economic activities capable of generating income for its residents. They are also connected with agriculture activities that include farming, livestock breeding and fishery activities. Rural population is often associated with lack of education and skill. Most economic activities in rural areas are carried out using traditional methods. Moreover, the agricultural land owned by rural communities needs to be larger and more economical for business venture.
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). 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.
The Department of Statistics Malaysia report 2022 revealed that more than 1.4 million people are involved in agriculture, mainly in rural areas. More than 7.5 million hectares of land are cultivated with industrial crops such as oil palm, rubber, cocoa; and agrofood crops such as paddy, fruits, vegetables, and cash crops. More than 80% of farmers in agro-food are categorized as smallholder farmers. On the other hand, 35% of the industrial crop farmers are smallholders.
The government plans to transform rural areas through many programs and projects. The government aspires to modernize agricultural activities through modern mechanization and new technologies. The development of rural regions aims to balance the economic distribution between communities in rural and urban areas. At the same time, the government also aspires to reduce poverty level in rural areas. The country's poverty rate has decreased significantly compared to five decades ago with the national absolute poverty rate falling from 49.3% in 1970 to 5.6% in 2019. On the other hand, the rural poverty rate decreased from 58.7% in 1970 to 12.4% in 2020.
Among the factors that contributed to this achievement was the encouraging economic growth rate. The average growth of the Malaysian economy grew by 5.8% per year between 1971 and 2021. Another factor is the New Economic Policy which focuses on eradicating poverty by increasing employment opportunities for all citizens regardless of race. Despite the reduced poverty level within rural and urban areas, the gap between urban and rural areas remains large. The economic balance between rural and urban regions will better harmonize the people in Malaysia.
This paper discusses the development of rural areas in Malaysia, focusing on programs and projects carried out by the Malaysian government. This paper also highlights the application of technologies and mechanization by smallholder farmers as ways to modernize rural areas.
RURAL COMMUNITY IN MALAYSIA
The rural community is a backward area that develops less than an urban area, showing progress in various aspects. Rural areas are also known as areas with poor economic resources. This situation indirectly causes rural communities to be labeled as a low social status compared to urban residents. Although, in reality, rural areas have resources, the resources cannot make significant changes to the socioeconomics of the rural sector if there is no effort from various parties. The effort in urbanizing rural areas is an agenda by the government to develop and advance rural areas to deal with the problems of backwardness and poverty. Therefore, the need for and importance of improving the socioeconomics of rural residents is a modus operandi from the government in making rural areas has their privileges and uniqueness.
Malaysia is an urban nation. Urbanization means the share of urban population in a country's total population. More than 77.7% of Malaysia's population lived in urban areas and cities, in 2021. In other words, less than 25% of Malaysia's population is rural. In general, the population of the rural area is decreasing every year. For example, Malaysia's rural population dropped from 8.90 million in 1990 to 7.49 million in 2010, a 15.84% decline in 20 years. One factor contributing to a lower rural population is the migration from rural to urban areas. The Report by Department of Statistics shows that 4.8% of the migration in Malaysia is from rural to urban regions in 2018. The profiles of Malaysia's rural community are presented in Table 1.
Table 1 shows that, in general, more than 1.56 million households with more than 8.0 million people live in rural areas in Malaysia. The percentage of people living in rural areas has reduced from 71.6% in 1970 to only 24.9% in 2020. The drop in rural population was due to rural-urban migration and the urbanization of rural areas. In the early 1990s, the rural-urban migration was very rapid. A report by the Ministry of Rural Development revealed that during the 1999, more than 25% of the rural population migrated to cities. However, the number has reduced to only around 3% in 2020 due to the urbanization of rural areas. In other words, the rural areas have been transformed into urban.
Around 45% of the households in rural areas are considered poor, whereas the other half are poor in urban areas. Most households obtained an income of around RM2,916.00 (US$648.00) a month, above the poverty line of RM2,199.00 (US$488.00). The income distribution in rural areas is balanced, where the Gini Coefficient index is 0.367. The Gini coefficient, also known as the Gini index, is a measure of statistical dispersion intended to represent income, wealth, or consumption inequality within a nation or a social group. A Gini coefficient of 0 reflects perfect equality, while a Gini coefficient of 1 reflects maximal inequality.
The government aims to transform rural areas through a program called 'Urbanizing Rural Areas,' which will make rural communities more advanced by 2030. This agenda is based on the needs and wishes of the people while ensuring that the role of rural sector development is on the right track and always focused on the primary goal. The implementation of the transformation was designed in 2016 with a focus on six objectives: to generate higher income through private involvement, entrepreneurial economic activity and create job opportunities. Based on the objective focused on implementing the transformation related to the socioeconomics of the rural population, the government wants to ensure that the socioeconomic aspect can help the villagers increase their income and change their lives to become more accessible and more advanced.
ISSUES AND CHALLENGES
The development of imbalance between urban and rural areas is a global issue that most countries in the world are still facing. The International Monetary Fund (IMF) statement in the World Economic Outlook expressed concern that developed countries such as the United States have shown the highest rate of imbalance in terms of regional development. This issue has been a starting point since the early 1980s, causing a prolonged polemic between the government and the people, leading to political polarization.
The balance of development between urban and rural areas is essential to ensure the unity and well-being of the people. Balanced development is also crucial for a developing country like Malaysia because that is one of the prerequisites to bring the country to the status of a developed country. Therefore, rural areas cannot be excluded because their economic contribution is significant, especially in tourism, agriculture, mining and quarrying, and manufacturing. In this country, the government has been trying to bridge the income and development gap between urban and rural areas through medium and long-term plans. However, the development imbalance between urban and rural areas persists.
In general, the household income in rural and urban areas has increased significantly within six decades after the independence. The average household income of rural communities has grown from RM200.00 (US$44.45) a month in 1970 to more than RM5,000.00 (US$1,110.10) in 2019. In the same period, the household income in urban areas has increased from RM428.00 (US$95.10) to more than RM8,635.00 (US$1,918.00) a month. The increased income in urban areas is larger than in rural areas. As a result, the income gap between rural and urban has risen from 46.7% in 1970 to 57.9% in 2019. The average income of rural, urban, and Malaysia in general is presented in Figure 1.
Figure 1 shows that the gaps between rural and urban areas remain large despite increased average income. A report by the Department of Statistics also shows that the average income of people in developed states like Selangor, Federal Territory, and Johor is between RM6,613.00 (US$1,470.00) and RM8,655.00 (US$1,923.30) a month. In contrast, the average income in less developed states like Sarawak, Kelantan, and Sabah is between RM4,218.00 (US$937.30) and RM4,341.00 (US$964.60), or about 50% of the developed states.
Rural areas cover almost 25% of the total area of Malaysia. Access to basic infrastructure, such as treated water supply and electricity in rural areas, is almost completed. Investments in providing basic infrastructure, utilities, and quality services in rural areas are imperative to improve access and reduce urban-rural disparities. Basic needs such as clean water, electricity, and internet are among those that need to be emphasized and must be available in all rural areas. However, the issue of clean water is still a serious concern for people in some states, such as Kelantan, Kedah, and Sarawak. The access to clean water supply still needs to be improved, and the state governments take a long time to overcome the issues.
Another challenge the government faces in its efforts to transform the rural sector is the change in the mindset of the people in the area who are still bound by old ways of thinking and acting. Referring to this challenge, they still expect subsidies or government assistance and consider implementing development and transformation to be the government's full responsibility. Therefore, efforts towards changing the attitude and mindset of the people in the village need to be implemented.
TRANSFORMATION OF RURAL COMMUNITY
Transformation is a process of change from a less advanced to a more advanced stage, either in terms of human thinking or physical aspects or the environment. The concept of transformation includes four critical components or goals that complement each other and need to be achieved, namely efficiency (to ensure the achievement of rapid economic growth), fair distribution of wealth (including poverty eradication and reduction of income disparity), sustainable (ensuring that current development does not threaten the lives of future generations); and the empowerment of the people, especially vulnerable groups such as people experiencing poverty. In other words, transformation is an effort to reduce or eliminate poverty, inequality, and unemployment.
The rapid transformation of rural areas over the past decades has successfully changed the country's development plan and impacted the country's socioeconomics. Rural transformation is a comprehensive process that changes the activities in the rural community from traditional-based activities to advanced digital economic activities. This transformation also requires the rural community to see ideas from the urban community to acquire goods, efficient service methods, and improve their socioeconomics.
Rural transformation is fundamental because the process will significantly influence the quality and potential of the community's life while also affecting the community's well-being. The Government's efforts in transforming the rural sector can be seen from an economic point of view, where various programs in the form of entrepreneurship are carried out. A program based on economic trends is an outstanding initiative to increase the income of people in rural areas. This means that to help transform the villagers into a better situation, the Government needs to constantly encourage this group to get involved in programs that flow economically.
The development strategy in Malaysia is considered planned development. Hence, the term used is the National Development Plan. The National Development Plan has been initiated since Malaysia gained independence from the British in 1957.
The transformation of rural development was implemented based on the national development framework, which is categorized into two phases. The first phase lasted from 1957 to 1993, and the second started in 1994 to 2020. During the first phase, the Rural Economic Development Plan, also known as the "RED Book Plan," was launched on 6 May 1960 by Tun Abdul Razak bin Hussein, the Deputy Prime Minister and Minister of National and Rural Development. This plan is a paradigm shift towards rural development focusing on providing minimum basic needs at the lower level.
The formulation of the New Economic Policy (NEP), which began in 1971 until 1990, was introduced to eradicate poverty and reorganize society to deal with economic imbalance. After the end of the NEP, the Government implemented the National Development Policy (NDP), which began in 1991 until 2000 to continue the policy of "growth with distribution," which focuses on poverty eradication in addition to continuing the restructuring of society through programs to improve the formation of the Bumiputera Industrial and Trade Society.
The development phase is known as Rural Development Transformation. After Malaysia obtained its independence, the economic level and achievement of the rural community needed to be improved compared to the urban community. Therefore, the Government has launched various development programs specifically for rural residents. This rural community development strategy is called the First Rural Development Transformation. Tun Abdul Razak, the Second Prime Minister of Malaysia, introduced it. The main goal of the first transformation is to develop physical infrastructure and widely supply basic facilities to the people. The First Transformation shows the gigantic program of the newly independent Government at that time to immediately develop physical infrastructure and supply and expand basic facilities to the people as the most effective strategy to build the nation.
The Second Rural Transformation was launched by Dr. Mahathir Mohammad, the fourth Prime Minister, in 1994, which brought a new philosophy and strategy for rural development. The second transformation not only strengthens all physical factors but also strengthens the human factor, especially human development, with a new paradigm that is positive for outsiders.
This Second Transformation is a paradigm shift in thinking and approach as a complement to the philosophy. It strengthens the strategy, focusing more on developing human resources, especially human development for rural communities. Human development is the main focus to ensure the success of rural community development. One of Malaysia's signature programs in transforming rural development is Gerakan Desa Wawasan, translated as Movement Vision Village (GDW). The Prime Minister launched the program in 1996 as a concrete program presented under the implementation framework of this transformation. Human development is a change in a person's structure, thinking, and behavior caused by the influence of biological (internal) and environmental (external) effects.
Human development involves three aspects, namely physical, cognitive, and psychosocial. The physical aspect involves growth and changes in the human body (physiology), and the cognitive element involves mental processes related to abilities in perception, memory, reasoning, creativity, and language skills. The psychosocial aspect involves personal development, human interaction skills, self-awareness, emotions, social skills, and behavior. Human development is the main goal in rural development, which focuses on improving the quality of rural life through programs and efforts to make rural areas productive, attractive, developed, and profitable, as well as balanced with the growth of development in the city.
In all two phases, the country continues to play an essential role in the development program of its people regardless of social or economic development.
Rural Development Policy
The Government enacted the Rural Development Policy to develop a "Prosperous, Inclusive, Sustainable and Holistic Rural Areas" by 2030. The vision of prosperous rural areas reflects the Government's desire to ensure that rural communities have access to infrastructure and social facilities that are at par with the urban area. Rural areas are targeted to offer employment and business opportunities that can increase the income of rural residents. The Government has a commitment to bridge and further eliminate the gap in quality of life between urban and rural areas, creating opportunities and creating a social atmosphere as well as a conducive environment to attract residents in rural areas, especially the youth, to continue to live outside the city. The objectives of rural development policy are as follows:
- To increase rural development and bridge the economic gap between urban and rural areas;
- To increase the availability of rural communities to generate better income through various village industries and handicrafts;
- To increase rural communities' access to ICT and new technologies and improve farming practices;
- To expand and increase credit facilities for trade related to agricultural activities and services in rural areas; and
- To further improve the quality of life of the rural population through the increase of social and physical infrastructure and to enhance the level of rural health and educational facilities.
The development of rural areas in Malaysia is carried out based on ten thrusts. It is a comprehensive effort where the implementation involved many departments and agencies:
- A competitive and sustainable economy
- Increased added value to local resources to generate wealth, entrepreneurship, and job opportunities;
- Supporting economic diversification and building the uniqueness of local products; encourage private investment; and
- Grouping the economy and multi-functional economic activities.
- Entrepreneurship drives economic development
- Entrepreneurship as the primary career choice;
- Create a conducive situation for the establishment of entrepreneurs and rural community enterprises; and
- Assist entrepreneurs with skills and technology.
- Quality human capital
- Quality rural human capital, viable, sustainable, and meets the needs of the future through a quality education system.
- Complete and sophisticated infrastructure
- Quality and sufficient rural infrastructure to support economic development; and
- Create an attractive and conducive living environment as a place to live, work, invest, and travel destinations.
- The superiority of the rural youth generation
- Empower rural youth with leadership character, knowledge, skills, patriotism, creativity, and innovation, and enjoy continuous income (sustainable) through entrepreneurship.
- Progressive rural women
- Rural women who are progressive in all aspects of life, including economy, education, health, social, and leadership.
- Prosperous rural life
- The development of healthy, safe, and prosperous rural communities.
- Effective delivery and governance system
- The creation of a delivery system and rural governance that is integrity, efficient, and adequate;
- Strengthening coordination and integrated collaboration;
- Empowerment of village-level governance; and
- Increased community involvement in planning, implementing, and monitoring the implementation of rural development.
- Biodiversity and sustainable environment
- Preservation of biodiversity and natural sustainable development approach; and
- Increase community awareness and responsibility and promote an environmentally friendly way of life.
- Housing, regional development, and integrated village settlement
- Rural home ownership, regional development empowerment;
- Balancing development between urban and rural areas and between rural areas; and
- The development of sustainable rural settlements that can attract the migration of urban residents to rural areas.
The Rural Development Policy is supported by the National Agro-food Policy and the National Commodity Policy that provide the aspirations and strategies for developing the agriculture sector in Malaysia.
National Agrofood Policy (DAN 2.0)
The National Agro-Food Policy, 2021-2030 (DAN 2.0), was enacted to develop a sustainable, resilient, high-tech agro-food sector to drive economic growth, improve people's well-being, and prioritize food security and nutrition. This vision has been translated into a policy statement based on the three main principles of sustainable development, which are economic, social, and environmental.
The implementation of DAN 2.0 is driven by six objectives, supported by five thrusts, 21 strategies, and 77 action plans that will be realized through various departments and agencies in the period ten years from 2021 until 2030. The thrust of the policy includes empowerment of modernization through smart agriculture and increased research, development, commercialization, and innovation activities (R&D&C&I), strengthening the value chain of agro-food products for domestic and international markets, talent development and skilled workforce, emphasis towards sustainable agricultural practices as well as business ecosystem facilitation including land use, finance, infrastructure, investment, and governance.
At the same time, DAN 2.0 focuses on four subsectors: paddy and rice, fruits and vegetables, livestock and fisheries, and aquaculture. The strategy will focus on high-value activities along the food value chain that can generate higher incomes for the target group and improve the socioeconomic status of farmers, breeders, fishermen, and agro-entrepreneurs.
National Agro-commodity Policy
The National Agro-commodity Policy 2021-2030 (NACP 2030) outlines the development direction of the country's agro-industry, including eight national commodities - palm oil, rubber, timber, cocoa, pepper, kenaf, biomass, and biofuel. NACP 2030 continues the National Commodity Policy (NCP) 2011-2020. NACP 2030 was enacted to ensure that this sector continues to be driven and contributes continuously to the country through the Gross Domestic Product (GDP) and export income.
NACP 2030 is expected to be able to develop the people by reducing the income gap and the poverty rate, especially for rural communities. The agro-industry sector's contribution to the people's socio-economic development over the past decade has been proven when it has generated source of income for almost 1.3 million smallholders and job opportunities for nearly a million local people. NACP 2030 includes five main thrusts: sustainability, productivity, value creation, market development and inclusiveness. Sustainability means sustainable production and consumption, and scale-up the circular economy. Productivity will be increased by the application of technology. The government also aspires to intensify value-creation through new product applications, product diversity and increase complexity. Market development will be done by expanding the the global markets. Finally, inclusiveness is to ensure fairer wealth distribution, particularly among smallholders. The implementation of the NACP 2030 is carried out by 130 strategies and 112 key performance indexes and targets. NACP 2030 also lists eleven flagship programs and focuses on promoting the growth of agro-commodity-based industries and enhancing the adoption of the circular economy."
Modernization of rural community
Modern technology plays a significant role in Malaysia's rural development. These technologies transform rural areas into more dynamic, efficient, and productive areas. Malaysia aims to modernize rural communities 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 technologies also supports the national development agenda. The government recognizes that using mechanization technologies will improve production efficiency and reduce the dependency on labor.
However, the application of modern mechanization technologies among farmers in Malaysia still needs to be solved. The government's aspiration to modernize the rural community 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.
Innovation and technology are essential catalysts in transforming the agricultural sector into an economic sector that can prosper society and the country's economy. The development of innovation and technology can solve the problems faced by the agricultural industry, such as increasingly limited agricultural land, low productivity, the issue of disease and pest attacks, and the lack of workforce. The government emphasizes the development of innovation and technology to increase the productivity and growth of the agricultural sector. Investment in agricultural R&D in Malaysia has also increased from year to year.
In general, the application of modern technologies was extensive in the agro-food sector while relatively slow in the agro-industry sector. 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 one time in a year. For example, land preparation for the paddy industry is carried out two times 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.
A study by the Malaysian Agriculture Research and Development Institute (MARDI) revealed that farmers generally have adopted mechanization technologies in their farming activities. The adoption of technologies in some industries is summarized as follows:
- Paddy Industry
- The application of modern mechanization technologies in paddy industry is motivated by higher productivity and efficiency in cultivation practices. At the same time, this industry also lacks workforce, leading farmers to use mechanization technologies supplied by service providers.
- Paddy production in greenery uses modern mechanization technologies, from land preparation, cultivation, and crop management to harvesting. Most activities are contracted out to service providers.
- Generally, service providers for the paddy industry are fully established in Malaysia. 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.
- Adopting technologies along the production chain has increased the efficiency and productivity of paddy industry in Malaysia.
- Dairy industry
- The dairy cattle industry is vital to Malaysia, as it provides a source of milk for the population. The consumption of fresh milk continues to increase, and the government aims to increase local milk production. In general, technology plays an essential role in of milk production. Most large-scale dairy farms practice high-technology management to produce optimal milk production. Farmers emphasize technologies related to housing, livestock management, health and biosecurity management technologies, pest and odor control technologies and milking technologies.
- On the other hand, small scale breeders are still using traditional methods.
- Technology adoption in the dairy industry is relatively moderate, especially among small-scale breeders. Lack of capital and knowledge are among factors that contributed to low adoption of technologies in this industry.
- Vegetable industry
- The vegetable industry is essential to Malaysia. However, the constraints of the production area cause vegetable production to be unable to meet the country's demand. The government intends to increase output by increasing the use of production technology. Advanced vegetable technologies such as sensor devices, machinery, precision agriculture, and smart farming are adopted to enhance vegetable production.
- Vegetable cultivation uses modern technologies such as fertigation systems, plant factories, and rain shelters to increase production and reduce the workforce. These technologies increased efficiency and improved crop yield and quality.
- Fruit industry
- Most fruits, such as pineapple, dragon fruit, rambutan, mangosteen and watermelon, are labor-intensive, especially during harvesting. Most farmers use mechanization during land preparation such as two-wheel tractors to plow, harrow, level the land, make drainage for irrigation and make beds. Farmers prepare the land before cultivating short-term crops like pineapple and watermelon. Farmers also used small machines such as grass cutters and boom sprayers for maintaining the farm. On the other hand, farmers make holes with drills when cultivating perennial crops such as rambutan, mangosteen, and durian. Small machinery is used because they are cheap and easy to handle.
- In some cases, farmers used service providers during land preparation, while use small tools to maintain 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.
The application of modern machinery and technology transform the agriculture sector and rural areas into a more dynamic and prosperous area. They improve the socio-economy of the population and increase food supply in the markets. The application of modern technologies has also increased the productivity and production of agro-food and agro-industry commodities. In other words, the modernization of rural areas through modern technology and innovation has resulted with a better social life of the population.
CONCLUSION
Rural development is one of the country's main agendas toward achieving balanced, sustainable, fair, and inclusive growth. In this regard, the focus is on completing basic infrastructure in rural areas, creating a conducive environment for investment, and developing economic and social activities to benefit the rural population. This, in turn, will create rural areas suitable for living, including by the youth, and reduce migration from the countryside to the city.
The transformation of rural areas is a continuous process. It requires comprehensive plans, strategies, and efforts from all parties, including government agencies, NGOs, and the communities in those areas. The collaboration of these entities will ensure that the rural regions' development will fulfill the government's aspiration to uplift the socioeconomic level of the people and, at the same time, increase the nation's income.
REFERENCES
Kementerian Pembangunan Luar Bandar, 2021. Plan Strategik KPLB 2021-2025. Putrajaya, Malaysia. (Ministry of Rural Development, 2021: Strategic Plan MRD 2021-2025)
Kementerian Pembangunan Luar Bandar, 2021. Data Asas 2021. Ministry of Rural Development, Putrajaya.
Kementerian Pertanian dan Industri Asas Tani (Ministry of Agriculture and Agroindustry). Ringkasan Ekskutif Dasar Agromakanan 2.0 (2021-2030). (Executive Summary of National Agrofood Policy 2.0 (2021-2030). Ministry of Agriculture and Agrofood Industry, Putrajaya.
Mohd Balwi, M.K. (2005), Pembangunan Luar Bandar di Malaysia: Gerakan Desa Wawasan (GDW) sebagai mekanisma pembangunan masyarakat luar bandar. Jurnal Teknologi, 42(E) Jun. 2005: 31–48. Universiti Teknologi Malaysia
Transformation of Rural Community in Malaysia through Development Programs, and Modern Technology
ABSTRACT
Rural communities are always associated with backward economic activities and traditional ways of life. Despite representing around 25% of its population, the rural community is essential to Malaysia’s economic development. The rural areas are a source of food through its agrofood industries, such as paddy, fruits and vegetables, and source of income by exporting agro-industry commodities such as palm oil, rubber, and cocoa. Rural development has been rapidly carried out in Malaysia. Many infrastructures have been developed and many programs and projects have been carried out to benefit the people. However, the income gaps between rural and urban community are still large and imbalanced. The Malaysian government aspires to transform the rural areas into dynamic, prosperous, modern regions. The government applied and transferred technologies in all programs and projects as strategies to speed up rural community transformation. These strategies resulted in a more progressive development of rural areas in Malaysia.
Keywords: Rural development, transformation, technology, innovation
INTRODUCTION
Rural communities are often associated with poverty due to lack of economic activities capable of generating income for its residents. They are also connected with agriculture activities that include farming, livestock breeding and fishery activities. Rural population is often associated with lack of education and skill. Most economic activities in rural areas are carried out using traditional methods. Moreover, the agricultural land owned by rural communities needs to be larger and more economical for business venture.
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). 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.
The Department of Statistics Malaysia report 2022 revealed that more than 1.4 million people are involved in agriculture, mainly in rural areas. More than 7.5 million hectares of land are cultivated with industrial crops such as oil palm, rubber, cocoa; and agrofood crops such as paddy, fruits, vegetables, and cash crops. More than 80% of farmers in agro-food are categorized as smallholder farmers. On the other hand, 35% of the industrial crop farmers are smallholders.
The government plans to transform rural areas through many programs and projects. The government aspires to modernize agricultural activities through modern mechanization and new technologies. The development of rural regions aims to balance the economic distribution between communities in rural and urban areas. At the same time, the government also aspires to reduce poverty level in rural areas. The country's poverty rate has decreased significantly compared to five decades ago with the national absolute poverty rate falling from 49.3% in 1970 to 5.6% in 2019. On the other hand, the rural poverty rate decreased from 58.7% in 1970 to 12.4% in 2020.
Among the factors that contributed to this achievement was the encouraging economic growth rate. The average growth of the Malaysian economy grew by 5.8% per year between 1971 and 2021. Another factor is the New Economic Policy which focuses on eradicating poverty by increasing employment opportunities for all citizens regardless of race. Despite the reduced poverty level within rural and urban areas, the gap between urban and rural areas remains large. The economic balance between rural and urban regions will better harmonize the people in Malaysia.
This paper discusses the development of rural areas in Malaysia, focusing on programs and projects carried out by the Malaysian government. This paper also highlights the application of technologies and mechanization by smallholder farmers as ways to modernize rural areas.
RURAL COMMUNITY IN MALAYSIA
The rural community is a backward area that develops less than an urban area, showing progress in various aspects. Rural areas are also known as areas with poor economic resources. This situation indirectly causes rural communities to be labeled as a low social status compared to urban residents. Although, in reality, rural areas have resources, the resources cannot make significant changes to the socioeconomics of the rural sector if there is no effort from various parties. The effort in urbanizing rural areas is an agenda by the government to develop and advance rural areas to deal with the problems of backwardness and poverty. Therefore, the need for and importance of improving the socioeconomics of rural residents is a modus operandi from the government in making rural areas has their privileges and uniqueness.
Malaysia is an urban nation. Urbanization means the share of urban population in a country's total population. More than 77.7% of Malaysia's population lived in urban areas and cities, in 2021. In other words, less than 25% of Malaysia's population is rural. In general, the population of the rural area is decreasing every year. For example, Malaysia's rural population dropped from 8.90 million in 1990 to 7.49 million in 2010, a 15.84% decline in 20 years. One factor contributing to a lower rural population is the migration from rural to urban areas. The Report by Department of Statistics shows that 4.8% of the migration in Malaysia is from rural to urban regions in 2018. The profiles of Malaysia's rural community are presented in Table 1.
Table 1 shows that, in general, more than 1.56 million households with more than 8.0 million people live in rural areas in Malaysia. The percentage of people living in rural areas has reduced from 71.6% in 1970 to only 24.9% in 2020. The drop in rural population was due to rural-urban migration and the urbanization of rural areas. In the early 1990s, the rural-urban migration was very rapid. A report by the Ministry of Rural Development revealed that during the 1999, more than 25% of the rural population migrated to cities. However, the number has reduced to only around 3% in 2020 due to the urbanization of rural areas. In other words, the rural areas have been transformed into urban.
Around 45% of the households in rural areas are considered poor, whereas the other half are poor in urban areas. Most households obtained an income of around RM2,916.00 (US$648.00) a month, above the poverty line of RM2,199.00 (US$488.00). The income distribution in rural areas is balanced, where the Gini Coefficient index is 0.367. The Gini coefficient, also known as the Gini index, is a measure of statistical dispersion intended to represent income, wealth, or consumption inequality within a nation or a social group. A Gini coefficient of 0 reflects perfect equality, while a Gini coefficient of 1 reflects maximal inequality.
The government aims to transform rural areas through a program called 'Urbanizing Rural Areas,' which will make rural communities more advanced by 2030. This agenda is based on the needs and wishes of the people while ensuring that the role of rural sector development is on the right track and always focused on the primary goal. The implementation of the transformation was designed in 2016 with a focus on six objectives: to generate higher income through private involvement, entrepreneurial economic activity and create job opportunities. Based on the objective focused on implementing the transformation related to the socioeconomics of the rural population, the government wants to ensure that the socioeconomic aspect can help the villagers increase their income and change their lives to become more accessible and more advanced.
ISSUES AND CHALLENGES
The development of imbalance between urban and rural areas is a global issue that most countries in the world are still facing. The International Monetary Fund (IMF) statement in the World Economic Outlook expressed concern that developed countries such as the United States have shown the highest rate of imbalance in terms of regional development. This issue has been a starting point since the early 1980s, causing a prolonged polemic between the government and the people, leading to political polarization.
The balance of development between urban and rural areas is essential to ensure the unity and well-being of the people. Balanced development is also crucial for a developing country like Malaysia because that is one of the prerequisites to bring the country to the status of a developed country. Therefore, rural areas cannot be excluded because their economic contribution is significant, especially in tourism, agriculture, mining and quarrying, and manufacturing. In this country, the government has been trying to bridge the income and development gap between urban and rural areas through medium and long-term plans. However, the development imbalance between urban and rural areas persists.
In general, the household income in rural and urban areas has increased significantly within six decades after the independence. The average household income of rural communities has grown from RM200.00 (US$44.45) a month in 1970 to more than RM5,000.00 (US$1,110.10) in 2019. In the same period, the household income in urban areas has increased from RM428.00 (US$95.10) to more than RM8,635.00 (US$1,918.00) a month. The increased income in urban areas is larger than in rural areas. As a result, the income gap between rural and urban has risen from 46.7% in 1970 to 57.9% in 2019. The average income of rural, urban, and Malaysia in general is presented in Figure 1.
Figure 1 shows that the gaps between rural and urban areas remain large despite increased average income. A report by the Department of Statistics also shows that the average income of people in developed states like Selangor, Federal Territory, and Johor is between RM6,613.00 (US$1,470.00) and RM8,655.00 (US$1,923.30) a month. In contrast, the average income in less developed states like Sarawak, Kelantan, and Sabah is between RM4,218.00 (US$937.30) and RM4,341.00 (US$964.60), or about 50% of the developed states.
Rural areas cover almost 25% of the total area of Malaysia. Access to basic infrastructure, such as treated water supply and electricity in rural areas, is almost completed. Investments in providing basic infrastructure, utilities, and quality services in rural areas are imperative to improve access and reduce urban-rural disparities. Basic needs such as clean water, electricity, and internet are among those that need to be emphasized and must be available in all rural areas. However, the issue of clean water is still a serious concern for people in some states, such as Kelantan, Kedah, and Sarawak. The access to clean water supply still needs to be improved, and the state governments take a long time to overcome the issues.
Another challenge the government faces in its efforts to transform the rural sector is the change in the mindset of the people in the area who are still bound by old ways of thinking and acting. Referring to this challenge, they still expect subsidies or government assistance and consider implementing development and transformation to be the government's full responsibility. Therefore, efforts towards changing the attitude and mindset of the people in the village need to be implemented.
TRANSFORMATION OF RURAL COMMUNITY
Transformation is a process of change from a less advanced to a more advanced stage, either in terms of human thinking or physical aspects or the environment. The concept of transformation includes four critical components or goals that complement each other and need to be achieved, namely efficiency (to ensure the achievement of rapid economic growth), fair distribution of wealth (including poverty eradication and reduction of income disparity), sustainable (ensuring that current development does not threaten the lives of future generations); and the empowerment of the people, especially vulnerable groups such as people experiencing poverty. In other words, transformation is an effort to reduce or eliminate poverty, inequality, and unemployment.
The rapid transformation of rural areas over the past decades has successfully changed the country's development plan and impacted the country's socioeconomics. Rural transformation is a comprehensive process that changes the activities in the rural community from traditional-based activities to advanced digital economic activities. This transformation also requires the rural community to see ideas from the urban community to acquire goods, efficient service methods, and improve their socioeconomics.
Rural transformation is fundamental because the process will significantly influence the quality and potential of the community's life while also affecting the community's well-being. The Government's efforts in transforming the rural sector can be seen from an economic point of view, where various programs in the form of entrepreneurship are carried out. A program based on economic trends is an outstanding initiative to increase the income of people in rural areas. This means that to help transform the villagers into a better situation, the Government needs to constantly encourage this group to get involved in programs that flow economically.
The development strategy in Malaysia is considered planned development. Hence, the term used is the National Development Plan. The National Development Plan has been initiated since Malaysia gained independence from the British in 1957.
The transformation of rural development was implemented based on the national development framework, which is categorized into two phases. The first phase lasted from 1957 to 1993, and the second started in 1994 to 2020. During the first phase, the Rural Economic Development Plan, also known as the "RED Book Plan," was launched on 6 May 1960 by Tun Abdul Razak bin Hussein, the Deputy Prime Minister and Minister of National and Rural Development. This plan is a paradigm shift towards rural development focusing on providing minimum basic needs at the lower level.
The formulation of the New Economic Policy (NEP), which began in 1971 until 1990, was introduced to eradicate poverty and reorganize society to deal with economic imbalance. After the end of the NEP, the Government implemented the National Development Policy (NDP), which began in 1991 until 2000 to continue the policy of "growth with distribution," which focuses on poverty eradication in addition to continuing the restructuring of society through programs to improve the formation of the Bumiputera Industrial and Trade Society.
The development phase is known as Rural Development Transformation. After Malaysia obtained its independence, the economic level and achievement of the rural community needed to be improved compared to the urban community. Therefore, the Government has launched various development programs specifically for rural residents. This rural community development strategy is called the First Rural Development Transformation. Tun Abdul Razak, the Second Prime Minister of Malaysia, introduced it. The main goal of the first transformation is to develop physical infrastructure and widely supply basic facilities to the people. The First Transformation shows the gigantic program of the newly independent Government at that time to immediately develop physical infrastructure and supply and expand basic facilities to the people as the most effective strategy to build the nation.
The Second Rural Transformation was launched by Dr. Mahathir Mohammad, the fourth Prime Minister, in 1994, which brought a new philosophy and strategy for rural development. The second transformation not only strengthens all physical factors but also strengthens the human factor, especially human development, with a new paradigm that is positive for outsiders.
This Second Transformation is a paradigm shift in thinking and approach as a complement to the philosophy. It strengthens the strategy, focusing more on developing human resources, especially human development for rural communities. Human development is the main focus to ensure the success of rural community development. One of Malaysia's signature programs in transforming rural development is Gerakan Desa Wawasan, translated as Movement Vision Village (GDW). The Prime Minister launched the program in 1996 as a concrete program presented under the implementation framework of this transformation. Human development is a change in a person's structure, thinking, and behavior caused by the influence of biological (internal) and environmental (external) effects.
Human development involves three aspects, namely physical, cognitive, and psychosocial. The physical aspect involves growth and changes in the human body (physiology), and the cognitive element involves mental processes related to abilities in perception, memory, reasoning, creativity, and language skills. The psychosocial aspect involves personal development, human interaction skills, self-awareness, emotions, social skills, and behavior. Human development is the main goal in rural development, which focuses on improving the quality of rural life through programs and efforts to make rural areas productive, attractive, developed, and profitable, as well as balanced with the growth of development in the city.
In all two phases, the country continues to play an essential role in the development program of its people regardless of social or economic development.
Rural Development Policy
The Government enacted the Rural Development Policy to develop a "Prosperous, Inclusive, Sustainable and Holistic Rural Areas" by 2030. The vision of prosperous rural areas reflects the Government's desire to ensure that rural communities have access to infrastructure and social facilities that are at par with the urban area. Rural areas are targeted to offer employment and business opportunities that can increase the income of rural residents. The Government has a commitment to bridge and further eliminate the gap in quality of life between urban and rural areas, creating opportunities and creating a social atmosphere as well as a conducive environment to attract residents in rural areas, especially the youth, to continue to live outside the city. The objectives of rural development policy are as follows:
The development of rural areas in Malaysia is carried out based on ten thrusts. It is a comprehensive effort where the implementation involved many departments and agencies:
The Rural Development Policy is supported by the National Agro-food Policy and the National Commodity Policy that provide the aspirations and strategies for developing the agriculture sector in Malaysia.
National Agrofood Policy (DAN 2.0)
The National Agro-Food Policy, 2021-2030 (DAN 2.0), was enacted to develop a sustainable, resilient, high-tech agro-food sector to drive economic growth, improve people's well-being, and prioritize food security and nutrition. This vision has been translated into a policy statement based on the three main principles of sustainable development, which are economic, social, and environmental.
The implementation of DAN 2.0 is driven by six objectives, supported by five thrusts, 21 strategies, and 77 action plans that will be realized through various departments and agencies in the period ten years from 2021 until 2030. The thrust of the policy includes empowerment of modernization through smart agriculture and increased research, development, commercialization, and innovation activities (R&D&C&I), strengthening the value chain of agro-food products for domestic and international markets, talent development and skilled workforce, emphasis towards sustainable agricultural practices as well as business ecosystem facilitation including land use, finance, infrastructure, investment, and governance.
At the same time, DAN 2.0 focuses on four subsectors: paddy and rice, fruits and vegetables, livestock and fisheries, and aquaculture. The strategy will focus on high-value activities along the food value chain that can generate higher incomes for the target group and improve the socioeconomic status of farmers, breeders, fishermen, and agro-entrepreneurs.
National Agro-commodity Policy
The National Agro-commodity Policy 2021-2030 (NACP 2030) outlines the development direction of the country's agro-industry, including eight national commodities - palm oil, rubber, timber, cocoa, pepper, kenaf, biomass, and biofuel. NACP 2030 continues the National Commodity Policy (NCP) 2011-2020. NACP 2030 was enacted to ensure that this sector continues to be driven and contributes continuously to the country through the Gross Domestic Product (GDP) and export income.
NACP 2030 is expected to be able to develop the people by reducing the income gap and the poverty rate, especially for rural communities. The agro-industry sector's contribution to the people's socio-economic development over the past decade has been proven when it has generated source of income for almost 1.3 million smallholders and job opportunities for nearly a million local people. NACP 2030 includes five main thrusts: sustainability, productivity, value creation, market development and inclusiveness. Sustainability means sustainable production and consumption, and scale-up the circular economy. Productivity will be increased by the application of technology. The government also aspires to intensify value-creation through new product applications, product diversity and increase complexity. Market development will be done by expanding the the global markets. Finally, inclusiveness is to ensure fairer wealth distribution, particularly among smallholders. The implementation of the NACP 2030 is carried out by 130 strategies and 112 key performance indexes and targets. NACP 2030 also lists eleven flagship programs and focuses on promoting the growth of agro-commodity-based industries and enhancing the adoption of the circular economy."
Modernization of rural community
Modern technology plays a significant role in Malaysia's rural development. These technologies transform rural areas into more dynamic, efficient, and productive areas. Malaysia aims to modernize rural communities 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 technologies also supports the national development agenda. The government recognizes that using mechanization technologies will improve production efficiency and reduce the dependency on labor.
However, the application of modern mechanization technologies among farmers in Malaysia still needs to be solved. The government's aspiration to modernize the rural community 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.
Innovation and technology are essential catalysts in transforming the agricultural sector into an economic sector that can prosper society and the country's economy. The development of innovation and technology can solve the problems faced by the agricultural industry, such as increasingly limited agricultural land, low productivity, the issue of disease and pest attacks, and the lack of workforce. The government emphasizes the development of innovation and technology to increase the productivity and growth of the agricultural sector. Investment in agricultural R&D in Malaysia has also increased from year to year.
In general, the application of modern technologies was extensive in the agro-food sector while relatively slow in the agro-industry sector. 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 one time in a year. For example, land preparation for the paddy industry is carried out two times 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.
A study by the Malaysian Agriculture Research and Development Institute (MARDI) revealed that farmers generally have adopted mechanization technologies in their farming activities. The adoption of technologies in some industries is summarized as follows:
The application of modern machinery and technology transform the agriculture sector and rural areas into a more dynamic and prosperous area. They improve the socio-economy of the population and increase food supply in the markets. The application of modern technologies has also increased the productivity and production of agro-food and agro-industry commodities. In other words, the modernization of rural areas through modern technology and innovation has resulted with a better social life of the population.
CONCLUSION
Rural development is one of the country's main agendas toward achieving balanced, sustainable, fair, and inclusive growth. In this regard, the focus is on completing basic infrastructure in rural areas, creating a conducive environment for investment, and developing economic and social activities to benefit the rural population. This, in turn, will create rural areas suitable for living, including by the youth, and reduce migration from the countryside to the city.
The transformation of rural areas is a continuous process. It requires comprehensive plans, strategies, and efforts from all parties, including government agencies, NGOs, and the communities in those areas. The collaboration of these entities will ensure that the rural regions' development will fulfill the government's aspiration to uplift the socioeconomic level of the people and, at the same time, increase the nation's income.
REFERENCES
Kementerian Pembangunan Luar Bandar, 2021. Plan Strategik KPLB 2021-2025. Putrajaya, Malaysia. (Ministry of Rural Development, 2021: Strategic Plan MRD 2021-2025)
Kementerian Pembangunan Luar Bandar, 2021. Data Asas 2021. Ministry of Rural Development, Putrajaya.
Kementerian Pertanian dan Industri Asas Tani (Ministry of Agriculture and Agroindustry). Ringkasan Ekskutif Dasar Agromakanan 2.0 (2021-2030). (Executive Summary of National Agrofood Policy 2.0 (2021-2030). Ministry of Agriculture and Agrofood Industry, Putrajaya.
Mohd Balwi, M.K. (2005), Pembangunan Luar Bandar di Malaysia: Gerakan Desa Wawasan (GDW) sebagai mekanisma pembangunan masyarakat luar bandar. Jurnal Teknologi, 42(E) Jun. 2005: 31–48. Universiti Teknologi Malaysia