The Malaysian Insight

THE Agriculture and Agro-based Industries Ministry (MoA) plans to set up a unit to oversee investments in the agrofood sector.

Deputy minister Sim Tze Tzin said the ministry wanted to make business, such as getting permits and approvals, easier for investors.

“The ministry will transform MoA to be business-friendlier and farmer-friendlier.

“We want to attract investments in the agriculture sector, be it small investments of tens of thousands to large ones of millions of ringgit.

“To facilitate and encourage investments, we will implement some measures. We know businessmen face various problems. So, the government needs to help solve your problems.

“The first will be starting dialogues for bilateral discussions between the government and the stakeholders, like farmers, associations, companies, industry players, and investors, to solve their problems and facilitate investments. 

“Next, is setting up the investment unit and district action committees to help farmers at the local level,” he told participants at the Penang International Business and Investment Summit today.

Sim also said the ministry was investing in big data so they could predict market demands and prices, and plan in advance what crops to plant.

He said Malaysia has huge potential as a food producer, and the way forward for the sector was to embrace modern farming and go high-tech, using big data that could boost productivity and increase yield.

“Malaysia is well-positioned to be an agrofood producer. Malaysia has stable weather 24 hours a day, 365 days a year. 

“Malaysia is also strategically located in Southeast Asia, which has a 750-million population.

“China and India (have populations) of 2.5 billion people combined. All these 3.3 billion people need food, vegetables, fish and fruits every day.

“We can be a major food producing country, like Thailand or the Netherlands, if we do it well.”

Sim said MoA encouraged private sector participation and investment in large-scale and high-technology agriculture activities with best agronomy practices through various incentives.

Among them are the Incentives for Approved Food Production Projects, like vegetable, fruit, spice and cash-crop farming, livestock rearing, aquaculture and apiculture under Section 127 of the Income Tax Act 1967.

The incentives were introduced in 2001 and renewed every five years.

The incentives include 100% tax exemption of 10 years for new projects, and five years for an extension project. 

Investors are also eligible for a 100% tax deduction, which is equivalent to the amount of investment for a maximum of three years.

Sim said other agencies, like the Malaysian Investment Development Authority and Inland Revenue Board, also offer incentives, like Export Increase Allowance, Special Incentive for Export Increase, Reinvestment Allowance and Accelerated Capital Allowance. 

He said Agro Bank could also provide good credit and financing, like low-interest loans from RM200,000 to millions of ringgit to young entrepreneurs, SMEs and also big corporations.

“MoA is now collecting and centralising all the incentives and financing opportunities provided by various ministries, agencies and financial institutions to provide a one-stop centre to all agropreneurs venturing into the sector.” – February 26, 2019.