THE IMPORTANCE OF AGRICULTURAL SECTOR IN AGRICULTURAL ECONOMICS

1.0 INTRODUCTION

Agriculture is an important sector to the country’s economic development. It was one of the highlighted issues during Tun Abdullah Ahmad Badawi’s as Malaysia’s Prime Minister. Abdullah strongly believed that this industry can generate wealth and reduce poverty particularly among those from rural areas. One of the major thrusts of the Malaysian economic development since her Independence in 1957 has been and continues to be the rural development programmes. The rural sector plays a pivotal role in the country’s economic growth, social and political development. The Malaysian economy depended on the rural sector in the early development stage for agricultural input and output and hence the country’s export earnings and growth in the 1960s and 1970s. Agriculture sector can be generalized into two categories – industrial commodities and food sub-sector. Industrial commodities under Ministry of Primary Industries (KPU) provision is responsible in ensuring high quality production of pepper, palm oil, rubber, cocoa and wood and timber. On another note, Ministry of Agriculture and Agro-based Industry (MOA) must oversee crop production, livestock and fisheries activities. Like any other developing economies, the growing economic importance of the manufacturing sector implies that the rural sector has fulfilled its role as the supplier of labour, land and capital required for industrial.

2.0 THE IMPORTANCE OF ECONOMIC IN AGRICULTURAL

The agricultural sector has contributed to the growth and major contributors to national income and export earnings. The agricultural sector initially derived from increase production of livestock, fisheries and other miscellaneous crops. The NAP provided for a comprehensive and coordinated long-term policy for an effective development of the agricultural sector. The NAP called for agricultural-industrial linkage through the expanded development of agro-based industries, mainly in processing, storage and handling of agricultural commodities to increase their value-added before export. There is some of importance of economic in agricultural sector:

2.1 Diversifying and shielding the economy

Agricultural is consideration a vital to the economy of Malaysia. It play a role in diversifying and shielding the economy from external shock. The increase in earnings of major commodities, particularly palm oil as food commodities, enable sector to retain its workforce and withstand the economic downturn. There also important in especially in diversification to improve the economy activity in Malaysia. This is some of example that can help for increasing the economy such as: