Disclaimer: Findings from Project Semai are limited to better understanding the challenges faced by smallholders in different agriculture subsectors. The information furnished in this website is for informational purposes only. The information should not be relied upon by any person to make an investment decision or for any other purposes.
INTRODUCTION
Smallholder farmers are an essential part of Malaysia’s Crops sector, growing a wide range of food crops, from vegetables, fruits, herbs and spices
In this survey, smallholders grow 83 type of vegetables, 44 fruits and 13 Herbs and Spices products all over the country. The rich variety of products were especially seen in East Malaysia , with smallholders growing ~119 types of food crops in the region.
Top 10 products sold by smallholders surveyed
Food crops smallholders are predominantly male, are non-contract farmers and
68%
of them are 40 years old and above
Crop farming is the main source of income for 85% of smallholders interviewed. Besides that, around 41% of them have only been in this industry for less than 5 years. Some of these smallholders ventured into farming due to loss of jobs from the pandemic, while some are military retirees. The younger smallholders also cited following their parents’ footsteps as a motivation to pursue farming. Government intervention programmes also allow new smallholders from non-farming backgrounds to venture into farming.
Key Demographics
Challenges
Smallholders across the country have been severely impacted by soaring input prices, climate change and pest attacks
Apart from that, 69% of crops smallholders from the survey experience perceived low productivity in their farming.
Challenges such as getting quality inputs, impact from climate change and pest attacks may contribute to low productivity faced by smallholders.
Increase in input prices is the leading challenge in the food crops, followed by pest attacks and climate change.
Smallholders cited that prices of fertilisers and pesticides have increased more than 100% over the past few years. According to the World Bank, costs of fertilisers have increased since 2021 due to production crunch in Europe from higher costs of natural gas, supply disruptions from Ukraine-Russia war and export restrictions in China [1]. To alleviate this, smallholders expressed receiving assistance such as fertilisers and pesticides from government agencies. However, some smallholders cited that these assistances are irregular, and some inputs were not suitable for their farms.
Smallholders also came up with their own solutions to help mitigate high input prices,
such as bulk purchases, incorporating composting and explore new farming practices that use less pesticides.
[1] World Bank, “Fertilizer prices ease but affordability and availability issues linger”, 5 January 2023
Key Challenges for Crops Sector
High increase in prices of fertilisers and pesticides
Percentage of smallholders that are impacted by changes in temperature, rainfall & climate disasters
Based on the number of respondents in each region
Climate change affect smallholders’ crop productions across all regions
Climate change causes extreme and unpredictable weather, affecting crop size and production cycles, and therefore impacting smallholders’ revenue.
From the survey, 85% of crop smallholders agreed that changes in rainfall affect their production and 75% agreed that changes in temperature and climate-related events affected production.
Climate impact can be detrimental to smallholders, damaging crops and infrastructure.
For example, in Keningau, Sabah, crops such as mustard and spinach were often wiped out by floods overnight. Smallholders in Terengganu also reported experiencing more frequent and unpredictable flood events recently.
Smallholders are mainly self-funded, but this is unsustainable
Farming operations are mainly funded by smallholders’ own capital or profit,
with only ~20% of smallholders utilizing financing mechanisms such as grants and loans to support their businesses. This makes farming a precarious business.
Smallholders revealed that the process to apply for financing mechanisms such as grants and loans can be complex and cumbersome.
Factors such as lack of experience, financial information, and relevant licenses prevent them from accessing grants and financial support that are available to them. For instance, grant and loan application processes have different requirements and procedures and must be submitted to different agencies. Apart from that, taking a loan is seen as risky for them as farming is affected by unpredictable factors such as climate and pests beyond smallholders’ control.
Besides that, younger smallholders voiced difficulties in securing the necessary seed capital to venture into farming.
They hope for improved financial assistance and loans that are tailored to their needs in the early stages of their operations to sustain their farms.
Sources of funding
Based on the number of responses received
Large number of smallholders surveyed are reliant on government support and do not have sufficient savings
Smallholders' support varies from livelihood financial assistance, in-kind (fertilisers, pesticides, etc.), land and capital.
Support programmes vary across different states and districts as they have different agricultural strategic focuses. For instance, some smallholders represent that Pahang focuses on crop farming (e.g., vegetables, pineapples), while Terengganu has a focus on livestock sector, i.e., the vision to become a hub for goat farming.
Additionally, smallholders' financial stability is ambiguous.
Around 50% of smallholders indicated that they do not have sufficient savings for emergency use, keep income records or have access to financial management information.
Type of assistance that respondents have received in the past 5 years
Financial awareness of respondents
Smallholders are keen to upskill and train, but there is lack of exposure and efficacy in training programmes
41% of smallholders surveyed have not attended any training, but this is not representative of their interests in upskilling themselves.
Attending training programmes can be inconvenient, as smallholders have to leave farms and travel far to attend these programmes. Some smallholders lack exposure to existing training programmes; some feel that available training programs are irrelevant to their needs.
Besides that, smallholders surveyed are mainly independent as 64% are not associated with farming organisations.
This presents a crucial opportunity to strengthen farming organizations and empower smallholders through training and upskilling programs, enabling them to address their existing challenges effectively.
Lack comprehensive Research & Development (R&D) programs that could improve productivity
Smallholders voiced that R&D programs should cover end-to-end farming operations to be effective – from testing initial soil conditions and recommending compatible products for the farm.
Programs should focus on improving productivity based on local conditions, adapt local farming techniques and look beyond new and high-technology hardware.
The high barrier to innovate and adopt new techniques and technologies may cause loss of productivity. Smallholders also represented that lack of on-ground assessment of their farms often led to misalignment and redundancies of R&D and training programmes for smallholders.
Perspective
Sebagai seorang wanita, saya ingin membuktikan bahawa saya boleh berjaya dalam bidang ini, membesarkan perniagaan saya dan menguruskan keluarga saya.”
As a woman, I want to show that I too can succeed in this industry, grow my business and also manage my family.
CLAUDIA, 30
Cucumber, lime, okra, and pumpkin farmer, Sabah
Cabai ini susah ditanam, namun saya tetap mendapat kepuasan. Saya dapat menyumbang kepada ekonomi setempat melalui hasil jualan, seperti membuka peluang pekerjaan dengan menggajikan pekerja.”
It’s difficult to grow chillies, but I get the satisfaction in other ways. I get to contribute to the local economy, and use the earnings to pay workers. So, the economy is running.
HILMI, 33
Chilli farmer, Perlis
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