(Fitting the needs of two worlds: the big scale enterprises and the smallholdings, but with one interest: healthy and growing income)Hopefully, with both the Prime Minister (PM) and Deputy Prime Minister visit this weekend (19-20 March) would inspire Taib Mahmud to call for a shot in the coming State election. Even yesterday (18 March), on my way to KL, I show quite some figures of the non-government leaders began to make their presence in Kuching: seem to look like tempua bersarang rendah in the Malay proverb. It has been tense these couple of months particularly in handling those Sarawak rural socio-economic disparity issues. In the sphere of 'Right Political Bargaining Time' as what is going on now, I could see more damages being done to our investment climate especially in the need to transform our rural economic sector.
(2) Last two days, I was happy to be able to bring down the Director of Agriculture Section of the Economic Planning Unit (EPU) of the PM Department to some rural places of Mukah-Dalat. I have been longing wanting to show him our Rural Realities that need right national policy attention. Thanks god his visit had clarified some of my thought on the Rural Development Models that had been lingering in my mind.
(3) In the present fast changing environs, in fact the two of us had been sharing the view that the State Planning Unit (SPU) is very vital in shaping the Development Model for the State. The (SPU) need to provide Economic Planning Leadership to all the related agencies. In this regard, thorough Planning Analysis and Reviewing had to be a continuous effort either through the consultancy or even inter-agency initiatives basis. We can't be just ambitious about one sector while neglecting the others. The economic development agenda of Tun Mahathir in the last 10 years of his administration should gives us a clue on how bad it was when the focus on Rural-agro-based development had been neglected.
(3) Couple of months back, despite critical shortfall in the Strategic Planning Capacity, I have been working with some friends to relook into our present Rural Development Model. In fact it is very difficult for me to press on the revisit or revamping of the existing Model along my present position as I'm no more from a Central Policy Making Chair. By virtue of some weaknesses that I could see in the currrent models, I have no choice, but to work beyond my boundaries, hopefully to strike the balance between too much focuses on modern sectors as against far disadvantage rural back drop.
(4) Nonetheless as some had made comments in myblog, with the glaring present Models that are not really rewarding for the target groups, and with Taib Mahmud invitation for such agencies like FELDA to come in to help in his speech somewhere in Balingian (?) lately, that had made my dream easier. Noting that past and even present FELDA and FELCRA Models had been much siphoned to meet agency 'own coffer enrichment', I would say, such Model also request for serious revisit. It is not quite right to adopt FELDA and FELCRA models that had been designed in the era of 'peak poverty and social instability' as a Model for the current era of 'much educated social structure'.
(5) Right now, for the last couple of months, with all my friends, we had been working the 'revised' Model with FELDA and FELCRA on the new ways to achieve Growing Income for our rural-agro sector. Under it original model, FELDA and FELCRA operation was and is very much dependent on public funding. This public funding was and is very much govern by inflexible procedures that wouldn't allowed FELDA and FELCRA to respond quickly to the emergecing changing business environment. Currently FELDA and FELCRA operate under dual entities ie public and corporate. This Model also having its serious handicap. The business in FELDA and FELCRA, as targetted are sustained, but sustained without Income Growth to the target group. That I would say, the key weaknesses of the existing FELDA and FELCRA model.
(6) All this while, the term Sustainable Development which has been a favourite terminology of the 1980s-1990s planning paradigm, need to be revisit, and definitely would not be my favorite term as it used to be when I was serving in the State Planning Unit. The bottom line of that sustainability is now about Income Growth. The KPI of sustainability should now be defined as Income Growth. Sustainability is about to make our target group income to grow beyond the inflation level. We must be working to achieve our Income Growth to at least double of the prevailing inflation rate.
(7) On a serious note, the formulation of the future Rural Economic Model should seriously take into account among others the following scenarios:
(a) Changing demographic structure of our population with much educated population are no more interested to work under harsh open field environments. Our education system had successfully produced much educated and skillful citizen who are now choosy about works. Our people seem to doesn't mind to earn less, as long as the working environment is much comfortable, and they could enjoy (spend) their earning well. Today living request for a blend between working and enjoying live.
(b) Accordingly, the future human resource seem slowly being dominated by the women. Ask around how many female kids as against male kids does your friends have? The trend as I see, the ratio is nearing 3:2 if not 3:1. We have more female kids than male. Our food, our way of life might have great affect on this ratio imbalanced. The ratio between men:women is getting much skewed to women. Under such trend, probably within the next generation (20-30 years from now), our agricultural production working environment need to developed to facilitate for the influx of the women power, whom by nature are less resilient to hard-heavy works. Lower human energy working structure need to be explored and practiced soonest.
(c) Currently fossil fuel is the world power generator. Though Sarawak may have the advantage of hydro-energy generation, we will still have to depend on movable sources especially to cater for the need of the mobile-based mechaniztion. Such energy source has becoming much scarce. Added with the potential chaotic situation in oil producing countries, the supplies stability is becoming a very serious issues. Since fuel is also the main source of agricultural inputs (fertilizer, pesticide, etc), this then creates another worrying factor that need to be addressed seriously. Instability in the petro-based supplies will seriously affect our agriculture production: negatively or positively.
(d) The next giant economies are catching fast in their life style change. China, India, and even Brazil are moving fast in their economic transformation. The present uncertainty in the Global Climate, had made these nations sort of net importer of food. While that could be good, but it is also a threat that may create World Food Security Crisis. Countries such as Vietnam, Thailand, Australia, New Zealand, Argentina,and some Eastern Europe which used to be major net food exporter are now facing food shortage of their own. Worst now that the Middle East and Africa which had never being self-sufficient in food production are now having serious instability issues. Thus, there is a serious threat to our food security interest.
(e) Now that we see the American, British, France and Italy are making thing worst in the Middle East, not really of democracy or safguarding the lives of the affected demonstratiors, but more of securing their oil-suppliles base. India, China, Japan, and Russia surely soon will come into play if thing can't be settle fast. The usual careless Arab (GCC) are traped within their hatred over Ghadafi, and thus now being ear-twisted by the so called United Nation. Now is the fight about non-human energy source, but in the coming future, definitely, there will be a fight over human energy source: food supplies issue. This is the very opportunity that we must move fast to capture.
(f) As an overall, food production factors: Land, human resources, technologies, and inputs are becoming seriously scarce and expensive. Sarawak agriculture land, despite seem to be abundant, in actual fact is becoming seriously inaccessable. My popular term for land in Sarawak is: WYSINWYG not the WYSIWYG ie What You See Is Not What You Get or Poverty in Abundancy: as said by the Malay proverb, Ayam di kepuk mati kelaparan, itik di kolam mati kehausan! The current Sarawak Land Administrative System probably is insufficient to place particularly the private alienated and NCR land into optimum usage. Probably all this while our concern over land security has overly clouded us from the need to facilitate for better economic usage of the land. In this regard, I would say, there is a need for a Balancing Act on the concern to safeguard the native land security issue and the need to make these lands economically useful. Worst the current 'purposely confusing' tactics of the NGOs (local and international) either with hidden political or trade agenda, had made the native land owners in a very confused over the real values and ownership of their land.
(g) Our agriculturist had not paid serious attention on our wet and humid climatic regime. Sarawak with annual rainfall of 5,000++ cm, and raining days of more than 200days in a year must be seen as a non-friendly to the current crops fertilizing and pest control system. Weathering causes us to be inefficient and costly. Other forms of fertilizing and pest control systems which could work alongside our climatic characteristic should be seriously and quickly explored. The natural bio-diversity as the sources of our future good agricultural practices might be the best. Lembah Hijau of Solo, Indonesian for instance had work well between dairy, vegetable, fruit orchard and paddy farming with very less inorganic chemical usage. Million of tons of EFB and all those timber waste are potentials soil fertility recovery materials that we had neglected.
(h) Accordingly, our preferrence on mono-crop plantation-based development may also need to be relook. The system seem to add to our land scarcity issue while at the same time limiting our production base. In today system, there seem to be too many Ministries and Agencies being involved in the agricultural related development. In lots of instances, the multitude presence of these Ministries and Agencies had created an antagonizing and very unproductive practices vis oil palm development is under one Ministry, while beef production is under another. The two, and as well as all the downward agencies seldom can get along to work on the national food interest. All because, each had their own KPIs, and they always never meet. Accordingly, meeting broader base healthy income growth under such system had always been hampered with the absence of well strategied policy implementation. The relevancy of the terms Integrated, Outgrowers, Nucleus Estate, Contract Farming, Anchored Tenants, etc are they really working? New approach, such as Complementary Group Farming probably had to be explored.
(i) While there is resources scarcity at the Government side, our banking system had not even been much friendly to small enterprises. Bankers always have a very prejudice attitude toward the smallholers whom wanted to be real commercial. The thinking of commercial enterprise must be big and only could be organized by the big guys are always in the bankers paradigm. If this dilema never being seriously resolved, we would always be having a disadvantage entreprising smallholders. The biggest gap that I could see is the lacking or absence of bridging between policy makers, bankers and entreprising smallholders. Here again I would see the EPU and SPU could play the lead role not only to push for the thinking but as well as to monitor the implementation of the idea.
(ii) Now that we know commodities such as banana, casava, pineapple, guava, etc that could generate high value products. But, all those land that are suitable for such commodities development had been taken up for oil palm. Thus, this limiting our potential to diversify our agro-based development. Our biggest mistake was we were not really serious about Agro-ecological Zoning. If we had taken such step, I would say, Sarawak would be the heaven of High Value Crops development.
(7) Definitely, I would believe there is such Model where the interest of the Country (measured as GDP), Large Scale Entrepreneurs (measured by PAT), and the people, the general citizen (measured by growing income and lower food price) being practiced. Taiwan, Korea, Japan, German, and Sweden cooperative model probably should be our close observation. The America, Australian, and New Zealand would not be the best since they are very much capitalist and subsidised. The Vietnamese and Chinese which are commune-based may also worth to considered. The Indonesian, Thailand and the Philippines which are a blend of commune and semi-capitalist may also be a good candidate to have a look. Once Haris Salleh in Sabah did have some models that seem to work well.
(8) Quietly, how did Israel and Singapore did it? Have we ever heard of food and income growth problem in this two nations? As I earlier said, we hate the Jews because they are being cursed by Allah for being defiant to His orders to submit to certain virtues, but we never study them from Allah wish for their sustenance on this earth. How much other races had Allah abolished from this earth, but despite His disliking of the Jews, He still maintain their existence. I strongly believe, Allah puposely act that way so that we could learn something from them, ie their struggle for their existence. I believe, despite their stuborn characters, Allah love them for they being resilient and determine on what they wants! They know what they want, and they stay stuborn to it, as the Malay said, they don't hangat-hangat tahi ayam (literally mean warm as chicken shit)
(9) Their Model, not only covers the agriculture sector but as well as in the overall economic system of Israel and Singapore, I would believe they had blended the virtue of Believe and Capitalism in both. The Jews, by virtue of their religion orthodoxy had used their capitalism shrewd skill to remain strong and wealthy. Their orthodoxy of they being the choosen one, made them determine to believe they would be continuously right. Unfortunately, though Islam had called upon his people to be confident in Allah Mercifull, yet the Muslim (Malays) seem to be hangat-hangat tahi ayam in most of their struggles!
(10) After reading the book: Fikh Ekonomi Umar Ibn Khatab by Dr Jaribah bin Ahmad Al-Haritsi; I would see our Economic Modelling had to be modified to fit the requirement of the Nation, the people, and where relevant the entrepreneurs. Thus taking from the normal National Income (GDP) formula as the basis of the equation, where:
GDP (Y) = Sum of Yi (Y is earning, and i are sectoral, where i= 1, n) eg
= Ymanufacturing +Yagro + Yconstruction + Ymining +....Yn
therefore, People's Income:
I(P) = Sum of Ei (Where I(P) as Personal or Household Income; R as earning
from numerous activities, and i=1,n ie source of earning).
= Ep + Em + Et+ Es + Ex, where p refer to production, m refer to
processing t refer to trading, s refer to other support
services, and other investments
with time differential, this formula should be modified to include the
multiplier factor, say:
I(P) = XiEi (where X is a multiplier factor, and i of X =0, 1) which then be
expanded as:
I(P) = aEp + bEm + cEt + dEs + eEx
say in the case of oil palm, from Yr1 to Yr7, a=1, while b,c, d and e
are equal to nil, since no processing (m) could be generated. Same goes
with trading (t), other support services (s), and other investments.
Based on such assumption, the value of a,b,c, d, e would differ ie be
increasing over the years. Thus if such could be achieve, definitely
the value of I(P) should also be increasing over the years. Any value
shortfall should be cushion by others. In such sense, there is a better
Income stability security as compared if the Income is of only one
source.
(11) The main notion of this Model is that, the source of Income of our rural folks must not be confine to agriculture production. It must be spread to cover production, processing, trading, other support services (eg transportation) and where fund is available to participate in other investment eg share market, or ASB, ASN, etc. Basically, the rural-agro development should not place our rural folks into a one basket risk.
(12) The question lingering in our mind is probably, is it practical and implementable. In fact this Model is nothing new and it has always been there, except we never see it should be extended to the small-kampung folks. Corporate investment had always being modelled along this system. The only issue now is for the Government to model our People Income (I(P)) generation activities should be geared along the same approach.
(13) Here, I would believe, the Mudharabah Investment System (profit sharing among all parties) ie the People (landowners), entrepreneurs (capital and expertise owners) and the Government as organiser, regulator and enforcer must come together in a much friendly and tightly knited investment system. The Government role as the organiser particularly by providing secured and cheaper investment facilities especially when it come to the Ummah interest must be properly drawn. Accordingly, the investors must treat the people as their true partners, and make them be seriously involved.
(14) The book of Fikh Ekonomi of Umar Al-Khatab worh to be explored, and the existing Islamic teaching approach need to be modified along such Fikh particularly in the pursuit of Ummah economic strengthening.
Kota Bharu, Kelantan
19-23 March, 2011
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