Malaysian plantations and smallholders: some subjective comparisons of performance

Malaysia’s agricultural development expenditure is forecast to cost around US$4 bn during 1986- 90 To finance the institutions and programmes, and as a matter of common sense, the performance of all participants must be optimised. Recent studies which demonstrate where big advances in production efficiency are possible are reviewed. The government appears to have no rational means of comparing the efficiency of different types of producer. To enable this to be done, some 33 criteria are proposed, the main ones being: dependence on subsidies; contributions to government revenue, taxation exports and import saving; dependence on imported farm inputs; efficiency in resource use; extent to which production is tailored to market demands; and harmony with government privatisation goals. Progress towards the attainment of New Economic Policy (NEP) targets is also taken into consideration. A subjective application of the criteria indicates a very wide range of performance standards. Plantation companies are seen to be performing far better than any of the types of smallholder on almost every count, including poverty alleviation. Recommendations include greater encouragement of plantation companies and the privatisation of some of the functions of government smallholder development institutions. Government is recommended to assemble a group of specialists to refine and precisely define the criteria, give weightings to each and then evaluate each institution in detail.

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