Competitiveness of the broiler industry in Peninsular Malaysia
Competitiveness has become a highly sought objective across government and private sectors across many nations. At the national level, the importance of competitiveness is significant to maximise the welfare of its population, while the private sector endeavours to be more competitive by increasi...
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Format: | Thesis |
Language: | English |
Published: |
2019
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Subjects: | |
Online Access: | http://psasir.upm.edu.my/id/eprint/84052/1/FP%202019%2055%20-%20ir.pdf |
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Summary: | Competitiveness has become a highly sought objective across government and private
sectors across many nations. At the national level, the importance of competitiveness
is significant to maximise the welfare of its population, while the private sector
endeavours to be more competitive by increasing profits, value added, return, and
market share. Broiler meat appears to be the most popular and the cheapest source of
protein in Malaysia, wherein trade protection has the potential to stimulate local
industry and enhance food security. The trade competition is undeniably strong and
Malaysia has been working towards becoming an essential exporter nation.
Nevertheless, this vision is barricaded by several challenges that have been lurking in
the industry, apart from the rising cost of production and associated reductions in
profitability, taxation, variability of corn and soybean prices, as well as instability of
exchange rate. As such, by employing the policy analysis matrix (PAM), as well as
the approaches initiated by Balassa and Vollrath, this present study assessed the
competitiveness of the broiler industry within the context of Peninsular Malaysia. The
PAM was applied to analyse the comparative advantage of broiler production and the
impacts of distortions in domestic prices. Revealed comparative advantage (RCA) and
relative trade advantage (RTA) were adopted in this study to evaluate the performance
of broiler trade. Both primary and secondary data were examined in this study.
Secondary data were retrieved from a range of sources, while primary data were
gathered from a field survey that involved 310 farmers (contract and non-contract) in
Peninsular Malaysia. The study outcomes signified that Malaysia has a robust
comparative advantage at all scales of broiler production, particularly amidst contract
farmers. The present policy indicators revealed that the broiler industry in Malaysia
seems far from being protected. The comparative advantage of the chicken subsector
indicated that Malaysia has a relative trade advantage in only a single product group,
namely HS020712 (Chickens and Capons, Whole Frozen). As such, this study
concludes that despite the increment noted in broiler production, Malaysia appears to
depend on import of chickens, regardless whole or cut. Therefore, in order to increase competitiveness, the industry should reduce its reliance on imported feeds, but instead,
invest more in developing locally-sourced alternative feeds available to farmers at a
lower cost, especially when compared to those imported. It is crucial that both the
government and private sectors to promote an integrated broiler contract farming.
Provision of incentives by the government to producers in support of the broiler
industry is one that is of utmost significant. That being mentioned, a viable policy may
be implemented to propose lower exchange rates and tax exemption. |
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