BERITA IDS (Volume 23, Issue 1/July 2008-June 2009)

Poverty Mapping in Sabah

Poverty is an issue that has great influence in shaping the development policy in Malaysia. Poverty rate in Malaysia is determined by reference to a threshold Poverty Line Income (PLI). The PLI is estimated based on what is considered to be the minimum consumption requirements of a household for food, clothing and other regular non-food items, such as shelter, fuel and power.  The poverty rate or incidence of poverty is a measurement of the proportion of all households that are living below the PLI, which is adjusted for differential living costs between the regions of Malaysia.

While Sabah’s past performance on poverty reduction can be said to be steady over the years, with the poverty rate decreasing from 33.1% in 1984 to 26.2% by 1999, the main issue is that the State still lags far behind its counterparts in Malaysia after several de-cades of emphasising on poverty eradication. Based on figures published in the Ninth Malaysian Plan (2006-2010), Sabah recorded a poverty rate of 23.0% compared to 7.5% for Sarawak and 3.6% for Peninsular Malaysia.

 Figure 1: Incidence of Poverty by Sub-Region, Sabah.

 Many causes of poverty have been divulged over the years. For example, it has been well documented that poverty is predominantly a rural phenomenon, but the underlying causes of poverty in Sabah are understood to be multi-dimensional, involving many interrelated factors, which may vary both in time and place. Nevertheless, there is a general consensus on factors that are linked to poverty such as poor resource endowment, lack of access to markets network, lack of employment opportunities, low education attainment, lack of access to productive assets such as land and water, cultural characteristics such as traditions not conducive to development, and demographic factors.

However, poverty analysis based on state-level indicators such as the incidence of poverty is too broad in nature to pinpoint the actual reasons for the high poverty rate in Sabah. To a large extent, state-level indicators give the impression that conditions within a state are uniform. Instead, the root causes of poverty may become more apparent through the collection and construction of geographically disaggregated indicators that will provide a more detailed description of the spatial distribution of poverty within Sabah.

In this connection, Malaysia has begun to explore the geographical disparities in poverty rates within the country through an emerging concept called “Poverty Mapping”, which is fast becoming one of the vital methods to curb poverty in developing countries. Poverty Mapping is essentially a method for combining survey and census data to estimate income inequality to determine the geographically-defined factors behind inequality and poverty. The National Vision Policy 2001-2010 (also known as the Outline Perspective Plan 3) has specified Poverty Mapping as one of the poverty eradication strategies in the country. The Fe-deral government has been developing a Nationwide Poverty Re-gistry System that is fully equipped with Geographic Information Systems (GIS) mapping, statistical assessment functionalities and poverty assessment tool.

In Sabah, a Poverty Mapping framework was tabled in April 2008. A State-level focus group for poverty eradication programme implementation and coordinator machinery for Poverty Mapping had also been set up to monitor and coordinate the implementation of poverty eradication programmes based on the census data collected by the Sabah branch of the Department of Statistics and the State Development Office, formerly known as the State Federal Development Department (JPPS).

As a simple illustration of Poverty Mapping, the State-level po-verty rate will be disaggregated into sub-regional context based on the classification under the Sabah Development Corridor Blueprint (2008-2025). When the poverty rates of all the respective districts (as per official 2004 figures released by the Economic Planning Unit, Malaysia) are aggregated and mapped into sub-region units, geographic variability that was hidden in the state-level data becomes clearer. The map (see Figure 1) shows that poverty in Sabah is clearly concentrated in the central sub-region with a poverty rate of 42.6% compared to 29.5% and 19.8% for the eastern and western sub-regions respectively.

From the sub-regional poverty map, some assumptions can be drawn to explain the higher poverty rate in the central sub-region of the State, which are as follows:

Geographical barrier – The central sub-region of Sabah ge-nerally consists of lower mountain ranges and plains with occasional hills. Settlements are normally sparsely distributed and remote from one another, making it more challenging as well as costlier to be developed.

Poor basic infrastructures and facilities – One major problem of the central sub-region is the size of its rural area, which is substantially lacking in basic facilities such as good road, electricity, clean water supply, telecommunication and decent school. This condition effectuates the rural communities to live in neglected and less developed circumstances.

Inadequate technology in agriculture – Agriculture is the mainstay of the central sub-region’s economy. However, given the development deficiencies of the area, the local communities can be assumed to be utilising mainly traditional and outdated agricultural practices where the level of agricultural technology is low instead of contemporary or modern methods. Hence, the output or yield of the communities is expected to be meagre and will not be able to improve their standard of living.

Lack of access to markets and services – The Crocker Range runs through the sub-region making it difficult to have better road connectivity with the western sub-region, thus, forming a barrier for the local communities to access to markets and services as well as productive assets such as capital.  As a result, income for most of the communities in the central sub-region continues to be disproportionately low.

Lack of education attainment – Given the obvious lack of education facilities in the central sub-region, most of the population can be said to have a low level of education attainment, which is one of the main causal of rural poverty.  On top of this, out-migration of especially the youth in search of better employment due to lack of employment opportunities may have worsen the poverty situation in the central sub-region.

To enable further analysis into the major causes and factors of poverty in the central sub-region or in Sabah as a whole, more poverty maps will need to be constructed such as those based on resource endowment, road facilities, access to water, access to school, etc. When relevant poverty maps are interlaced together, the true picture of poverty may be exposed. This task is made easier with the recent technology advancement in GIS, databases and software engineering. As indicators are mapped for higher resolution administrative division, district or even kampung units, geographic variability that was obscure in the aggregate data will certainly become more visible. In general, Poverty Mapping can help identify places in Sabah where development lags and highlight the location and condition of infrastructure and natural resource assets that are critical to poverty alleviation. In addition to finding solutions to the main issues of poverty, Poverty Mapping has the potential to identify every household living under the poverty line in the State so that assistance can be extended to those who are really in need. However, the success rate of Po-verty Mapping in helping to reduce poverty depends largely on the level of cooperation among all relevant quarters especially in the provision of accurate statistics and information.  After all, a poverty map is only as good as the data it employs.

With the advent of Poverty Mapping in Malaysia, it is hope that the Sabah focus group on poverty eradication can exploit this new approach to its fullest potential in order for more effective measures to be developed to trim down geographical disparity in Sabah and in doing so, reduce the overall poverty rate of the State to be more on par with the rest of Malaysia.– Richard T. Koh

The Potential of Halal Industry in Sabah

The Sabah Development Corridor (SDC) opens a window of opportunity for halal industry to grow in Sabah. The halal industry especially in the food and beverages sector has vast potential to be developed in the state. As it is,  based on statistics provided by Matrade 2008, the global halal market is worth RM478 billion.

In line with the sectoral focus of the SDC and the state development agenda known as the Halatuju, agricultural activity is seen as one of the most important enablers for the development of the state and the SDC besides tourism and manufacturing. Indeed, the agriculture sector has always been the backbone of Sabah’s economy in terms of its contribution to the state GDP. Agriculture production in the state include commodities such as oil palm, rubber and cocoa as well as fruits, vegetables, marine, poultry and livestock.

In fact, Sabah has the advantage in terms of its livestock production as the state has been well known to be free from the foot and mouth disease. Therefore, Sabah’s livestock products has the potential to be highly sought after not only at the domestic market but also at the global market should the halal requirement is fulfilled. As it is the halal food market concentrate on  affluent Islamic countries such as Bahrain, Algeria and the Saudi Arabia. Nevertheless, these countries have set a high standard on their halal requirement that need to be fulfilled by the exporting countries. Thus, studying the success story of halal industry in Australia and Denmark can be a good starting point  The two countries are among the leading exporters of halal meat in the global halal marker from the non-Muslim countries.

The emphasis given by the government on the development of the downstream activities in the food industry also provide potential for the halal industry to grow in Sabah. As it is, the small and medium industries in the food sector will be able to penetrate the halal food market should the halal requirement is met. Providing the necessary requirements to stimulate the development of halal industry among the SMEs in the food industry therefore is crucial  for the industry to grow.

Moreover with the launching of Labuan Halal Distribution Hub by the Prime Minister, Datuk Seri Abdullah Ahmad Badawi in early March 2009, Sabah indeed has a major role to play in the development of the halal industry in this region by complementing the facilities that will be provided by the Labuan Halal Distribution Hub. In addition, Sabah may consider the potential of establishing a halal industry network with neighbouring countries especially Brunei and the state of Sarawak.

However for Sabah to excel in the halal industry there is a lot to be done. This includes improving the supply chain efficiency in the food processing industry. Strict adherence to halal requirements must be fulfilled in each stage of the supply chain, from the producers to the consumers. Non-compliance with halal requirement in any part along the supply chain, for example, a doubt on the ‘halalness’ of the animal feed, may raise a doubt on the ‘halalness’ of the final product and this may reduce the chances to penetrate the global halal market. Therefore, learning and studying other countries’ success stories is a must in order for Sabah to advance in the halal industry.

Logistics and transportation are other aspects that need to be seriously looked into in order to develop the halal industry in Sabah. Containers that are dedicated to store halal food and beverages need to be made available for shipping or for distribution by road. At the same time infrastructure such as the halal slaughter house needs to be streamlined and rules and regulations on halal certification also need to be beefed up.

Introducing efficient traceability and control system in the food and beverages supply chain is also another important aspect that needs to be seriously considered. Implementing the traceability system would assist in meeting the HACCP and the GMP requirements, which are the two most important standards required to penetrate the global market.

The potential of the halal industry is indeed vast and Sabah can be one of the important players due to its strength in the agriculture sector. Therefore, it is crucial to immediately address any shortcoming that may hamper the effort to develop halal industry in the state.

Advocating Sustainable Agriculture

 The first stimulus package of RM7bil announced by the government late last year was timely in raising domestic demand in dealing with the global economic slowdown.  The bulk of the first stimulus package was meant for infrastructure spending. Nevertheless, with increased lay-offs in the offing, a concerted effort to retrain the jobless for a rewarding career in a more strategic sectors such as agriculture, particularly in the food and agro-biotechnology sub-sector need to be undertaken. 

The agriculture sector contributed 28% or RM 4.1 billion to Sabah’s GDP in 2005 and was the second highest behind the services sector.  Though oil palm and rubber were the biggest contributors in the agriculture sector in the past, they have lost much of their shine in the face of a depressed global economy. Sabah has about 2.12 million hectares of arable land, rich flora and fauna, suitable weather, a long coastline, and is free from devastating plant and animal diseases. It is a perfect place for any agriculture related activity. Presently, crop plantation is still being dominated by oil palm, covering 88.20% of all arable land. Over-dependence on the export of a single commodity could pose future risk. Smallholders also face rising prices of chemical ferti-lizer and animal feed stock.

Opening new forested lands for agriculture could pose a serious threat to the ecosystem and could cause more problems than it would provide solutions. It could also place Sabah in an awkward situation as the state has taken vigorous efforts to promote her rich biodiversity via ecotourism. Therefore, the way forward is to increase the yield of existing farms by intensifying agricultural production. Adoption of environmentally-sound technology and agriculture system could provide interesting solution coupled with training new techno-preneurs in the agro-biotechnology sub-sector.

Agro-biotechnology

Intensification requires the use of new and modern tools. Biotechnology in agriculture or agricultural biotechnology (agro-biotechnology) offers new opportunities for solving agricultural problems, i.e., higher yields with less pressures on the environment.

OECD defined biotechnology as the application of science and technology to living organisms, as well as parts, products and models thereof, to alter living or non-living materials for the production of knowledge, goods and services. It involves various techniques of recombinant DNA, gene transfer, embryo manipulation and transfer, plant regeneration, cell culture, monoclonal antibodies and bioprocess engineering. Although there have been many criticism and skepticism over its utilization, it should be noted that the tools of biotechnology do not alter the purpose of agriculture; instead they complement traditional methodologies to enhance agricultural productivity. In contrast with the traditional method, biotech techniques are relatively fast, highly specific and resource efficient. The main application of agro-biotechnology is to increase yield while at the same time promote ecological sustainability. The table below shows some of the agro-biotechnology approaches and their applications in agriculture.

Agro-biotech provides long-term benefits in agriculture and health especially through bio-fortified crops.span style="mso-spacerun:yes">  Its application could significantly reduce smallholders’ dependence on fertilizers and pesticides.

Nevertheless, agro-biotech is not without risks. Therefore, effective risk management measures such as Biosafety Act and regulatory agencies must be in place to mitigate the risks of any introduced agro-biotech products.

Integrated, Green and Zero-waste approach

Conventional agriculture system needs to be improved so as to ensure efficient production of agriculture produce while protecting the ecosystem. Decreasing soil fertility, scarcity of water supply, increased prices of fertilizer and animal feed stocks are the things that the smallholders are faced with today. Improving the agricultural system by incorporating ‘integrated’, ‘green’ and ‘zero-waste’ approach, such as recycling of nutrients via innovative soil and water conservation methods could be adopted and should be implemented according to farming scale.

Organic farming (OF), for example, is suitable for small-scale farm producing vegetables. It is a form of agriculture that relies on rotation, green manure, compost, biological pest control and mechanical cultivation to maintain soil productivity and control pests. Organic farming is easy to maintain and requires little agricultural inputs. Integrating OF with ‘backyard farming’ initiative such as Program Bumi Hijau (introduced by the government to encourage urban and rural dwellers to farm their own staple food and vegetables), is a wise step in that it not only increases food supply in the country but also instils awareness for healthier and more nutritious organic produce. People with access to farm land could also take on hydroponics and fertigation techniques.

Mixed or integrated farming is a good approach for medium and large-scale farms. The system involves the practice of planting compatible crops in combination with livestock or aquaculture. This approach not only maximises the utilisation of land, farm resources, inputs and agro-wastes, it has also proven to increase farmer’s income.

Bigger farms such as oil palm plantations should adopt agro fo-restry practices. Agro forestry involves the integration of woody perennials with crops and animals under the same land management unit. The Integrated Soil Fertility Management (ISFM) system could be employed in combination with the organic and inorganic soil amendments (fertilizer).  Composting waste from farm would contribute greatly to soil fertility, and at the same time, safeguard the surrounding environment.

It’s all about knowledge

One of the key challenges then is how to encourage more people to take up farming and exploit the vast potential of the agriculture sector. There is also a need for rural farmers and smallholders to be trained and exposed to Science, Technology & Innovation (STI).  Well-informed farmers could make better decisions on managing their farm. It should be noted also that much idle and underutilised land is found in the rural areas. 

SDC acknowledges the need to increase both land and farmer productivity. Under the Agri-Excel Outreach Programme, smallholders can have access to training in Good Agriculture Practice, demonstration of technologies, advisory services and purchase of agri-resources. Today’s biological agricultural revolution is knowledge intensive; and by producing knowledge-equipped farmers/smallholders, we could spearhead the revolution towards the emerging bio-economy. – Mary Sintoh and Justin Janim

Scope for greater Sabah-Perlis ties under SDC

A delegation from Perlis led by the Raja Muda of Perlis Tuanku Syed Faizuddin Putra Ibni Tuanku Syed Sirajuddin Jamalullail had a discussion with the management and senior staff of the Institute for Development Studies (Sabah) on 17 September 2008. It was held at the Magellan Su-tera Kota Kinabalu.

The Perlis delegation unanimously agreed that there was scope for greater cooperation between Perlis and Sabah through the Northern Corridor Economic Region (NCER) and the Sabah Development Corridor (SDC) initiatives. They believed such collaboration could be forged by tapping into the strengths of the respective states for the development of new and higher value economic activities.

The Perlis delegation included its State Secretary, Encik Mohamad Zabidi bin Zainol Abidin, several state executive council members and heads of government departments and agencies. Also in the group was Vice Chancellor of University of Malaysia Perlis or UniMAP, Prof. Dato’ Dr. Kamarudin Hussin. The IDS group was led by its Executive Director, Datuk Dr. Mohd Yaakub Haji Johari.

Both parties agreed that there were many opportunities for collaboration between the two states. For example, Sabah could complement Perlis in its tourism sector which is not as well developed compared to Sabah. Likewise, Sabah could tap into the expertise of Perlis in agriculture especially in the specialty natural products (SNP) sub-sector such as the cultivation of grapes and herbs.

Members of the Perlis delegation had earlier been briefed by Dr. Yaakub on the concept and strategies of the SDC. In his briefing, Dr. Yaakub had touched on the underlying concept of the SDC that leverages on Sabah’s inherent strengths and factor endowments in three sub-regions that comprise the SDC. They are the Western Sub-Region, the Central Sub-Region and the Eastern Sub-Region.  He said the SDC, launched by the Prime Minister, Datuk Seri Abdullah Haji Ahmad Badawi in January this year, is a joint initiative of the federal and state governments to enhance the quality of life of the people in Sabah by accelerating economic growth, promoting regional balance and bridging the rural-urban divide through sustainable development.

Implementation of the SDC will span over a period of eighteen years from 2008 to 2025. SDC is guided by the principles of capturing higher value economic activities; promoting balanced economic growth with distribution; and ensuring sustainable development via environmental conservation. The key sectors to be promoted under the SDC initiative are agriculture, services (tourism and logistics), and manufacturing.

Dr. Yaakub highlighted several areas with potential for Perlis-Sabah collaboration such as tourism, logistics, agriculture and manufacturing. These include new lifestyle and wellness programme under tourism; food production and commercial crop cultivation; food processing and agrobio-pharmaceutical products; bio-prospecting and intellectual property rights; biomass and cellulose-based products; global supply chain and logistics in agro-industry.

Dr. Yaakub pointed out IDS is currently involved with UniMAP as its principal collaborator in a project funded by the Ministry of Science, Technology and Innovation (MOSTI). The local collaborators are Sabah Forestry Development Authority (SAFODA) and Universiti Malaysia Sabah (UMS).

The project aims to develop a complete localisation of the technologies required to successfully develop tea tree (Melaleuca alternifolia) as a commercial crop in Sabah. Tea tree oil, extracted from tea tree, has many medicinal uses in skin care and for treatment of various ailments, bacterial and fungal infections. Tea tree oil is effective for treating insect bites, boils and minor wounds. It has also been known to help soothe sunburn, ear infections, and bee stings, among others.

Dr. Yaakub said trial cultivation of tea tree was being carried out at the Sabah Agro-Industrial Precinct (SAIP) demo plot at Kimanis, Papar.  An offshoot of the project is to achieve full training, transfer of expertise, and development of site specific practices so that the crop can be cultivated by large groups of farmers in the state.

He said that one of the aims of SAIP, a project under the SDC, is to establish an efficient supply chain model that is capable of moving a product or service from supplier to customer. It will provide forward and backward linkages to industries or companies which seek to maximize their revenue within their sphere of interest in the supply chain. He added that SAIP is an integrated agrotech cluster to support agro-based small and medium enterprises (SMEs) and start-ups with components such as incubator centre, herbal farm, knowledge park, SME park and commercial and residential zones.