Magnitude and structure of agricultural price protection in Malaysia

There has been a growing concern about the impact of economic policies on agriculture, especially among developing countries. This is primarily because these policies - including pricing, taxation and trade policies - directly and indirectly affect the profitability and level of prosperity in the agriculture sector. It is with this in mind that the Kiel Institute of World Economics has embarked on a Research Project to evaluate how policies in developing countries affect their agriculture sectors. This is planned to be achieved using two approaches, namely a quantitative cross-section analysis of agricultural protection for a fairly large number of developing countries, and a detailed analysis for three developing countries. Malaysia has been selected to represent one of the three developing countries which is to be analysed in greater detail. This report presents the findings of the Subproject which aims to empirically analyse the magnitude and structure of agricultural price protection in Malaysia. Among other things, it attempts to reveal how, and to what extent, macroeconomic and sector-specific policies strongly dictate the profitability of farming, the movement of labour and capital into, and out of, agriculture, and the pace at which new technologies are developed and adopted by farmers .