Raising income of farmers tops FAMA chairman’s agenda

KUALA LUMPUR: Come September, it will be 54 years since the Federal Agricultural Marketing Authority (FAMA) was established to serve as the national agricultural marketing agency under the Agriculture and Agro-based Industry Ministry.

Today, FAMA still stands strong and continues to drive the domestic and international markets, expanding market access for the local agriculture and agro-based industry products and making sure they are made available to consumers at affordable prices.

Ishak Ismail (pix), whose appointment as FAMA chairman took effect on Nov 1, 2018, is determined to continue the efforts made by his predecessors to ensure FAMA meets its mission and vision.

Ishak, 51, who is from Bukit Mertajam, Penang, is a member of the Board of Valuers, Appraisers, Estate Agents and Property Managers, and chairman of its property management practice committee. He is also president of the Malaysian Muslim Real Estate Consultants Association.

He has a bachelor’s degree in property management from Universiti Teknologi Malaysia and a master’s degree in Business Administration from International Islamic University Malaysia.

Bernama interviewed Ishak recently to find out the directions he will be charting for FAMA during his two-year term as chairman.

Here are excerpts from the Question and Answer session.

Q: As chairman, what are your plans for FAMA?

A: In line with the developments under Industry 4.0, FAMA is using its Agrobazaar Online portal and application to reduce the supply chain between the producer/farmer and consumer. I wish to see FAMA excelling in the marketing of its commodities, that come in the form of fresh produce and processed agro-based products, to elevate the incomes of farmers and enable consumers to buy the products at reasonable prices.

I also feel FAMA should enhance the efficiency of its delivery system via an integrated communication system using the mass media and online and offline applications such as FAMA Mobile Comm.

Human capital development will also be stepped up to create a culture of excellence among the employees who are an important asset in the progress of any organisation.

Q: How do you view the present state of the nation’s agricultural sector?

A: The rapid development of the industrial sector has made the agricultural sector relatively less significant but this is often misunderstood to mean that the agricultural sector is being neglected. The truth is, the sector’s contributions have actually seen tremendous growth.

The sector’s contribution of inputs to agro-based industries that focus on downstream activities has been huge. We have to focus on helping to increase production values to reduce our existing imports. In short, when the focus is on the production aspect and the strategies adopted are consistent with the economic principles of supply and demand, agriculture will play a special role in this country’s industrial process.

The agricultural sector also calls attention to the need to ensure food security. Besides military and diplomatic strength, the production of sufficient food to meet the population’s needs is also a priority for the nation.

We have also devised long-term strategies to export our signature products, as well as halal items produced by our local entrepreneurs that have the potential to penetrate foreign markets. These (strategies) will pique the interest of farmers, fishermen and, in particular, young entrepreneurs who would want to get involved in the agricultural sector, which is poised to become a strategic industry capable of generating new business opportunities and sources of wealth.

Q: What are the measures that can be taken to address the weaknesses in the nation’s agricultural sector?

A: Among the weaknesses are the existence of small-scale farms and their high production costs, low returns and poor quality products. The main reason for these is the low utilisation of technology and mechanisation.

In the meantime, the domestic market is too small to reach the critical mass required to attain cost efficiency and reasonable returns on investment. So, the agricultural sector’s problems are related to the 80 percent subsistence farmers and small-scale farmers. As for the commercial farmers, our focus is on helping them to gain a wider foothold in the export market.

To help resolve the problems faced by the small-scale farmers, programmes that have been planned (earlier) have to be implemented widely. These include ascertaining the types of crops that the farmers can plant which can be marketed either fresh or in processed form.

Market guarantee is essential to earn the confidence of farm operators and this can be done through contract farming. Contract farming has to be managed by government institutions, as well as private organisations with the help of the government.

Collaboration between government and private agencies is essential in reinforcing production policies that are based on the needs and requirements of the market, whether domestic or international, by integrating information related to market demand and supply.

Q: To what extent has FAMA, as the leading agricultural marketing agency, achieved its targets?

A: As of December 2018, FAMA has successfully opened 2,755 (sales) outlets involving 68,156 entrepreneurs, generating sales worth RM2.89 billion last year. The outlets comprise fresh fruit stalls, ‘Pasar Tani’ or Farmers’ Market, permanent Farmers’ Market, Agrobazaar Rakyat and Agrobazaar K-shoppe.

For 2019, FAMA targets to open 177 additional outlets and generate sales worth RM3 billion from the 2,932 outlets.

Q: What are the marketing strategies employed by FAMA?

A: To bolster up the supply of fruits and vegetables for the agro-food industry, the Agriculture and Agro-based Industry Ministry has implemented the contract farming programme together with FAMA, Department of Agriculture, Farmers Organisation Authority, Malaysian Agricultural Research and Development Institute and Agrobank.

To ensure the supply of fresh produce to the farmers’ markets, FAMA has implemented a programme to match at least five farmers with each trader.

FAMA will also step up its direct-from-farm sales where the prices of fresh produce are five to 20 percent lower than the usual market prices. This programme is being conducted at all FAMA outlets, including ‘Pasar Tani’, My Best Buy and ‘Bazaar Peduli Rakyat’.

Apart from that, FAMA will also strengthen its existing outlets, such as ‘Pasar Tani’, MyFarm Outlet, Agrobazaar Kedai Rakyat, Agrobazaar K-shoppe and others, as well as its online marketing platform Agrobazaar Online.

With this, the supply chain will be shortened to enable farmers to earn a reasonable income and consumers to buy the products at reasonable prices.

FAMA will also forge closer ties between the farmers and producers by conducting programmes and upskilling courses on commodities, such as durian, that currently enjoy high market value.

Q: What are the innovations by FAMA itself to improve the marketing of the nation’s agricultural products?

A: Since FAMA’s establishment in 1965, it has come up with various sales innovations, including Farmer’s Caravan, Food Truck and Agrobazaar Online. FAMA has also developed the Self-Regulated by Regulated Entity regime to enhance the grading of export-bound products, with an auditor’s certification.

Q: Malaysia spends billions of ringgit on food imports and the cost keeps rising. What are the steps that can be taken to reduce our dependence on imports?

A: Vegetables and fruits that come from other countries pose stiff competition to the local farmers’ produce as the imported ones are being sold at lower prices due to low operating costs.

As a free market economy, Malaysia cannot stop foreign products from entering the nation. However, the government can through the relevant departments and agencies tighten the import procedures so that products cannot make their way into the country arbitrarily.

For example, the Health Ministry can take samples of imported products at the various entry points (ports, airports or border areas) for regular checks to ensure that they complied with the Food Act 1983 and did not possess pesticide content exceeding the maximum residue levels. Products that contravene the Act will not be permitted into the country for a specific period of time.

FAMA is also stepping up the enforcement of the Agricultural Grading, Packaging and Labelling Regulations 2008, under the Federal Agricultural Marketing Authority Act 1965, to ensure wider compliance.

Local farmers should also be ready to transform their production techniques and operate on a large-scale basis, using modern and up-to-date technology in order to yield high-quality products at competitive costs.

Q: Our dependence on food imports is a rising threat to our nation’s food security. It is not impossible for Malaysia to face food shortage if there is no clear policy to address the situation. Can you explain how the nation is preparing for this?

A: The Agriculture and Agro-based Industry Ministry unveiled a five-point plan on Feb 14 this year to ensure national food security and take care of the people’s well-being. The first point covers efforts to modernise and increase agricultural output to ensure stability in supply and food prices by giving more emphasis to the rice, livestock and fishery sub-sectors

The second point will boost private-sector investments in agriculture commercially, as well as enhance agricultural export trade. The government also wants to turn agriculture into a solid, sustainable and profitable revenue source for farmers, livestock breeders, fishermen and young agropreneurs. The government will also improve the agricultural industry ecosystem to support the modernisation of agriculture, private-sector investment and expansion activities for farmers, livestock farmers and fishermen, as well as strengthen the organisational structures of the ministry’s departments and agencies to improve the delivery system and governance.

In this respect, FAMA will increase its (food) supply by expanding contract marketing and boosting the development of downstream products, as well as developing more young agropreneurs.

Q: In your opinion, should the government make changes to its existing agriculture policy to increase agricultural output?

A: The Agriculture and Agro-based Industry Ministry is currently guided the National Agro-Food Policy (NAP) 2011-2020. I understand that the ministry is now drafting NAP 2.0 and is taking into account current developments, needs and issues in order to strengthen the nation’s agro-food sector and make it more competitive.

One of the issues that have to be looked into is the wastage of resources such as agricultural land that is lying idle and not being optimised. I hope the various state governments can come up with an inventory of idle land (in their respective states) so that FAMA can help to link the landowners to investors, cooperatives and commercial farmers. The landowners can either lease out their land or strike up strategic partnerships that can benefit both parties.

I hope that with the support, commitment and cooperation of all the parties involved, Malaysia’s agro-food sector will continue to grow to meet the aspirations of the farmers/producers. — Bernama

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Bank Negara: Financial Threat Intelligence Platform operational before year-end

KUALA LUMPUR: Bank Negara Malaysia (BNM) expects to operationalise the Financial Threat Intelligence Platform before the year-end as part of its efforts to strengthen platforms for collaboration in building a safe environment for innovation.

Governor Datuk Nor Shamsiah Mohd Yunus said the central bank, together with the financial industry, is in the process of establishing the platform.

“The platform will collate, analyse and disseminate real-time information on cyber threats and trends to strengthen the detective capabilities of the industry against such threats,” she said at the opening ceremony of MyFintech Week 2019 here today.

The central bank’s ongoing efforts to build an enabling yet safe environment for innovation also include building inter-operable infrastructures. This will start with open and fair access to a shared payment infrastructure for banks and non-banks alike.

“It is also important to recognise the need for other digital public infrastructures as key enablers to harness the full potential of fintech. These include having a national digital identity system, framework for open API (Open Application Programming Interface) and open banking, clear cloud policy and nationwide broadband connectivity.”

Nor Shamsiah said BNM is further differentiating its regulatory and supervisory approach to capture new sources and transmission of risks while allowing room for experimentation and for firms to develop economies of scale.

“An important objective will be minimising regulatory arbitrage, which can lead to risks building up in parts of the financial system that may be subject to differentiated regulations. We anticipate that this will call for a much more dynamic approach to regulation and supervision as well as better communication of regulatory developments going forward.”

Nor Shamsiah called for a financial system that is relevant, safe and socially responsible. For example, as the country moves towards becoming a digital economy, the financial sector must accord adequate support to innovative small and medium enterprises, such as those involved in e-commerce. Equally important, she said, this imperative is not only for banks, but extends to the other parts of the financial sector.

“Non-banks such as venture capital and private equity firms, as well as alternative financiers such as factoring and leasing companies, have an equal stake in this and should also play a more active role in financing the needs of businesses.”

Nor Shamsiah said the ability of finance to mobilise capital, create leverage and distribute risk allows it to be a powerful force for good. But excessive and unbridled risk-taking creates instability which is harmful not only for the particular firm, but the economy and society at large.

She said fintech holds enormous potential to enhance competition, increase productivity, address unfulfilled consumer demand and fundamentally change the way institutions provide financial services.

Similarly for Islamic finance, adoption of technology could present significant opportunities to reduce the cost of financial intermediation and expand access. For example, distributed ledger technology could enable automated execution of contracts through the use of digital protocols, or smart contracts, which can simplify complex syariah contractual processes.

International Monetary Fund financial counsellor and director Tobias Adrian said new technologies, such as blockchain, are at the core extremely safe, but around these safe technologies are business models that are potentially vulnerable.

“Risk managers of financial services companies always say the number one risks are cyber risks. For the moment, we have not seen a systemic failure such as the 2008 crisis due to cyber attracks, but the potential is there. The financial system is only as safe as the weakest link is safe. Cyber risk is certainly one considerations that we must ever mind from policy and business.”

He sees that over the next couple of years, there will be a debate among global regulatary standards for new technologies.

“In most countries, fintech for the moment is not yet systemic and so the regulators have not moved to global regulatory standards for the fintechs. In some countries, we do see large and sometimes systemic risks emerging from new technologies and fintech. Looking at the regulations for fintech around the world, on one hand we see fragmentation, on the other a race to the button in certain jurisdictions,” Adrian said during a panel session at the event.

Asset-light business model will eliminate residual risk: AirAsia

SEPANG: AirAsia Group Bhd’s move to dispose of its aircraft would be a good way to get rid of residual risk, said group CEO Tan Sri Tony Fernandes.

He said the low-cost carrier was moving to its asset-light business model from the traditional model of owning aircraft as it was more feasible and cheaper in the current volatile market.

“People think that we are an asset-light airline because we are going to become a digital company. That is not the case… we are asset-light only because the market makes it feasible to lease plane. In the current market, it is cheaper to lease plane than to buy plane.

“Now if the interest rate gets cut (which might be), then it will become cheaper to buy plane. So we are only responding to the market situation,“ he told reporters after the launch of Malaysia’s first outdoor plane observation deck at the Kuala Lumpur International Airport by Malaysia Airports Holdings Bhd today.

Furthermore, Fernandes said AirAsia had made a change in its aircraft orders from CEO (classic engine options) to NEO (new engine options), thus selling its aircraft was a good way of getting rid of residual risk.

“We sold it (aircraft) at a very high price in the market and dividend payout to our shareholders, so it was a very neat solution. While we are asset-light now, that does not mean we will be asset-light forever. If interest rate changes, then we will start buying aircraft again.

US’ Sanmina shifts production to Penang from China amid trade spat

GEORGE TOWN: Uncertainties from the US-China trade war has caused the US–based Sanmina Corp, which has taken over the production business of Motorola Solutions here to temporary relocate from China to Penang.

This was disclosed by Motorola Solutions Malaysia Sdn Bhd’s deputy managing director John Andersen, who said that the relocation was an ongoing process and he attributed part of the exercise due to the prolonged US-China trade attrition.

It was only in 2012 that a production arm of Sanmina – SCI Corporation (M) Sdn Bhd, Kuching (Sanmina-SCI) had decided to relocate to its new facility in China from Sarawak and now a role reversal is taking place.

Andersen said that Sanmina, which took over Motorola Solutions’ facility in Bayan Lepas in early 2016, was relocating its production of the latter’s products to Penang.

It is learnt that the relocation is seamless as Sanmina and Motorola have cemented an efficient way of manufacturing without the relocation of heavy machinery.

Andersen was speaking during a media preview of Motorola’s sprawling research and development base in Penang – held in conjunction with the 45th anniversary celebrations of the American electronics giant presence here.

Sanmina is an integrated manufacturing services company, which is working with Motorola Solutions on manufacturing in Reynosa (Mexico), Kunshan (China), Campinas (Brazil).

In early 2016, Sanmina took over the Motorola Solutions’ production plant in the Bayan Lepas Free Industrial Zone here.

The takeover went smooth and the production output has stabilised in view of the steady global demand for electronic components, which are the cornerstones of Penang’s high tech manufacturing.

A spokesman with Invest Penang said that the relocation of one of Sanmina’s production arms back to Penang is an illustration that the state stands to benefit if the US-China trade war continues unabated.

It is a good prognosis for the state’s manufacturing sector, and it has begun to show when Penang recorded RM8.8 billion of total approved manufacturing investment in the first quarter of this year, up 768% year-on-year and surpassed the whole of 2018’s amount of RM5.6 billion, said the spokesman.

iDimension may inject IT projects to address GN3 status

PETALING JAYA: iDimension Consolidated Bhd may inject information technology services and projects into the group, a move to address its Guidance Note 3 (GN3) status.

iDimension told Bursa Malaysia that the injection could be undertaken through its memorandum of understanding (MoU) with Wiki Labs Sdn Bhd (WLSB) and Wiki Lab Solutions Sdn Bhd (WLSSB).

“This MoU serves as an integral step of the company’s overall plan in regularising its GN3 status under the ACE Market Listing Requirements of Bursa Malaysia Securities Bhd,” it said.

iDimension said the MoU will provide both parties to take further discussions on a non-binding basis and commercial permutations for an entry into a definitive agreement between iDimension and Wiki group.

“iDimension and the Wiki Group believe that a synergy between them would be commercially beneficial and are desirous of entering into the MoU to set out the principal terms by which iDimension and the Wiki Group will combine resources to develop and carry on the subsisting businesses of iDimension as well as the businesses.”

WLSB is involved in trading and provision of information technology services while WLSSB is engaged in system consultants and provision of information technology services.

iDimension was classified as GN3 company last October after its external auditors Messrs BDO expressed an adverse opinion in respect of its audited financial statements for the financial period Jan 1, 2018 to June 30, 2018.

D’Nonce chairman, directors re-elected amid boardroom tussle

PETALING JAYA: D’Nonce Technology Bhd’s shareholders approved the re-election of its chairman Tengku Ahmad Badli Shah Raja Hussin and three directors at its AGM held in Kota Baru, Kelantan, today.

This comes after largest shareholder Blackstream Investment Pte Ltd’s attempt to restrain the company from proceeding with the AGM.

A filing with Bursa Malaysia revealed that the resolutions to re-elect Tengku Ahmad, Lim Teck Seng (executive director and group CEO), Datuk Yeo Boon Leong (non-independent non-executive director) and Ng Kok Wah were carried at the AGM. Ng, who resigned last week, has been re-appointed as independent non-executive director.

“Confidence and faith are reinforced for the board and its management today after the majority votes by shareholders have re-elected us as custodians for this group. Therefore, any unauthorised motions passed in the EGM do not hold water and are null and void,” Tengku Ahmad told SunBiz.

Shareholders also approved the payment of directors’ fees and benefits, and the re-appointment of Messrs BDO as auditors.

However, five out of the 12 resolutions were not carried namely, the authority to allot and issue shares, proposed renewal of shareholders’ mandate on recurrent related party transactions, proposed renewal of authority for the purchase of the company’s own ordinary shares, proposed adoption of new constitution of the company and proposed change of company name.

Tengku Ahmad said the results of the poll show that the shareholders present were against the adjournment of the AGM, despite high resistance from its largest shareholder Blackstream which holds a 25.61% stake.

“It did not come as a surprise following their claimants in a public article that I have walked out in the last EGM when the true representation is via the official minutes of meeting that is being submitted to Bursa Malaysia,” he said.

“As a matter of fact, we have wholeheartedly invited the shareholder from Blackstream to elect a director which they have not done so. Unfortunately, it is a display of reluctance and unprofessionalism to take part in our journey to move the company forward,” he added.

He said the management is focused on bringing the business to greater heights and become a fully integrated global contract manufacturing company in order to remain relevant for the next two years.

It plans to expand its reach in the local and overseas market as well as vertical integration that can enhance the group’s machinery and equipment capabilities. Targeted countries for growth include Singapore, Thailand and Indonesia.

In order to combat market volatility, D’Nonce is geared up for new product development. It is venturing into new business opportunities and has secured new businesses in trading of lubricant oils. It has also identified property development as its fourth segment.

“Our potential is great. We are long standing and a deeply rooted establishment that has been and will be continuously contributing to the nation’s economy. The management seeks to ensure that the company grows beyond its current capabilities,” said Tengku Ahmad.

Last week, D’Nonce’s EGM on June 12 which was called by Blackstream, was adjourned when shareholders voted in favour of the adjournment.

However, Blackstream, in challenging the legality of the adjournment, proceeded with the EGM and later claimed that all resolutions were passed, including those on the removals of Tengku Ahmad, Lim and Yeo as well as the appointments of Lim Siang Kai, Lam Kwong Fai (Lin Guang Hui) and Chong Kim Teck.

Subsequently on Friday, Blackstream and P’ng Chiew Keem filed an originating summons in the Kuala Lumpur High Court to declare the adjournment of the EGM to be null and void. It is fixed for hearing on June 24.