1. Mohd Zahid Laton, FPP UiTM Pahang
CHAPTER 6
INVOLVEMENTS OF GOVERNMENT AGENCIES IN AGRICULTURAL MARKETING
1. Government agencies involved in the process of agricultural production
and marketing;
1.1 FAMA. FAMA (Federal Agricultural Marketing Authority) ia the
marketing agency established under Ministry of Agriculture. Formulate on
30th September 1965 for coordinating, controling, supervising and assisting
eksport and import activities regarding to the agricultural products including
vegetables, fruits, grains and aqua-culture.
1.2 MARDEC. At its foundation in 1969, MARDEC's first task was to
improve the quality of the rubber produced by Malaysia's smallholders, and
to reorganize its marketing. MARDEC Berhad is now an integrated
conglomerate with world-wide connections, engaged in Rubber and Polymer
Processing, Trading and Manufacturing.
1.3 BERNAS. Padiberas Nasional Berhad (BERNAS) is a company listed on
the Main Board of Bursa Malaysia. As the nation's partner in the domestic
paddy and rice industry, BERNAS and its group of companies are involved in
the procurement and processing of paddy; as well as the importation,
warehousing, distribution and marketing of rice in Malaysia. BERNAS
currently controls about 24% of the paddy market and 45% of the local rice
demand.
1.4 LTN. Lembaga Tembakau Negara is the agency established to
restructure tobbaco production system to increase efficiency, reducing cost
and the competitiveness of the tobbaco. LTN intend to increase the sosio-
economy of farmers in the tobbacco industry.
1.5 MITI. The Ministry of Commerce and Industry was established in
April 1956 and situated in Government Office, Jalan Raja. The Ministry was
then renamed the Ministry of Trade and Industry in February 1972. The
vision is to make Malaysia the preferred investment destination and among
the most globally competitive trading nations by 2020.
1.6 MATRADE. Malaysia External Trade Development Corporation
(MATRADE), was established in March 1993 as a statutory agency under the
Ministry of International Trade Industry (MITI). As Malaysia’s national
export promotion agency, MATRADE is responsible for assisting Malaysian
companies succeed in the international market. MATRADE’s vision of making
Malaysia the premier exporting nation is paired with its mission to develop
and promote Malaysia’s exports to the world.
1

2. Mohd Zahid Laton, FPP UiTM Pahang
2. Government agencies involved in providing the technical assistance;
2.1 MARDI. The main objective of MARDI (Malaysian Agricultural
Research & Development Institute) is to develop indigenous science and
technology capabilities in support of the development and modernization of
the national food and agricultural sector.
2.2 MPOB. The Malaysian Palm Oil Board (MPOB) is the premier
government agency that is responsible for promoting, developing and
advancing the country’s palm oil industry. It is also responsible for providing
scientific and technological leadership to support the development of the
palm oil industry in Malaysia.
2.3 FRI. The Fisheries Research Institute (FRI) conducts studies in
various fields of aquatic organism such as fish, mollusk and shrimp.
2.4 Department of Veterinary Services. DVS providing veterinary
services in industry regarding to animal for the public interests. DVS purpose
is to encourage the production of livestock and value-added industry.
3. The government role in the price policy. Most agricultural commodity
markets usually function under the regular forces of demand and supply. The
government also fixes minimum support prices or statutory prices for certain crops
in order to protect the interests of farmers and encourage them to increase
production. If the price of these commodities falls below the support limit, the
government arranges to buy these crops on state account.
4. Agricultural commodities are homogeneous products. For example, palm oil
of the same type and grade whether it is produced in the different location is used to
make cooking oil. Manufacturers regard price as the main determinant of their palm
oil purchases. Commodities are produced on a large number of farms, each
accounting for a small part of total output. No individual farmer can influence prices
by limiting supplies to the market. Because of these characteristics, individual
producers cannot influence market forces. Prices can be low and quite variable,
depending on the level of output. Higher production usually translates into lower
price for most commodities. At such times, incomes of most farmers are bolstered
by commodity programs designed to even out the large swings in prices.
5. The government role in the storage. The storage, pricing and marketing of
agricultural commodities is as important for high profits as the process of
production. This is the reason why the government since 1951 has laid stress on the
development of physical markets, on farm and off farm storage structures, facilities
for standardization and grading, packaging and transportation through different
Five Year Plans.
2

3. Mohd Zahid Laton, FPP UiTM Pahang
6. The government role in the transportation. The Road Transportation
Department provides insightful agricultural transportation information and analysis
to help move agricultural products to market. The Road Transportation Department
informs, represents, and assists agricultural shippers and government policymakers
through market reports, regulatory representation, economic analysis, technical
assistance, and responding to inquiries. Through several companies such PLUS,
MTD, and other highway builder, government seriously involves in the development
of roadway facilities to migrate the agricultural product from location to other
location, and to move those commodities to the port, assembling centres, and other
location for further processing.
7. The government role in grading. Through several agencies, grading will
take places to standardize the commodities product especially for the export
purposes. At one time Lembaga Koko Malaysia is the only one of the agency that
grades the cocoa produced in Malaysia for export.
8. The major issues and problems of farmer’s marketing which justify
government intervention or involvement in agriculture;
8.1 Farm prices and income problems.
8.2 Food security.
8.3 Market and price are not able to allocate resources properly.
8.4 Conflicting outcome of farm policies.
8.5 Protecting consumers of lower income group.
3