MALAYSIA imported nearly RM20bil in processed food in 2018. That’s a high figure for a country with a population of 32 million.
Being heavily dependent on imports to feed our people does not augur well for our food security. Malaysia ranked 40 in the Global Food Security Index in 2018 (bit.ly/malaysia_food). In the event of an emergency, it is our periuk nasi (rice bowl) that will be our prime consideration. Not the skyscrapers, high-tech industries or services sector.
Reliance on imports can leave us exposed to vulnerabilities during an economic downturn or when climate change consequences hit harder. And when the ringgit weakens, it will make food imports more expensive.
What measures can we undertake to lower our food import bill? Malaysia can learn several important lessons from Denmark in the food sector.
In 1814, famine broke out in Denmark and it was unable to feed its people. But today, Denmark, with a land mass only 13% the size of Malaysia, produces enough food products for 30 million people, even though its population is just over five million.
Food exports currently account for around 20% of Denmark’s total exports.
I know the food sector in Denmark quite well, as I had covered and travelled all over the country for nearly five years, from 2010 to 2014. I have always been fascinated by the remarkable advances this Scandinavian country has made in food security. Something new seems to be always cropping up in its food sector.
During my meetings with public sector officials, universities, industry associations, food park organisers and major corporations, I have observed the underlying and innate responsibility, synergistic effects and cooperation of all concerned parties that has contributed to Denmark’s renowned reputation in the food sector.
Progress in this sector is a characteristic pattern of Denmark’s vigorous ability to adopt, adapt and profit from changes and new opportunities arising in industry.
And to the nation’s credit, “Made in Denmark” food products and technology are not only globally recognised but also synonymous with high quality, safety and excellent hygiene. Danish food producers currently operate some of the world’s most sophisticated processing plants.
From the development of the Danish food ecosystem, internationally renowned companies have evolved. And it is no surprise that some of Europe’s major food and beverage companies are based in Denmark, including well-known names such as Arla Foods (dairy sector), Danish Crown (meat processing), Danisco (sugar), and Carlsberg (beer).
Denmark is also home to global leaders such as Novozymes (enzymes), Christian Hansen (food ingredients) and Royal Greenland (fish and seafood production and processing).
The Danish food industry today is built completely in an ecosystem and always moves along the value chain, incorporating high value- added activities such as integrated farming methods, research and development, innovation, skilled personnel, manufacturing, logistics, and marketing and distribution, with the impetus being spearheaded by cooperatives.
Major food producing companies in Denmark have thrived via the establishment of cooperatives initiated by farmers to consolidate their position in the ecosystem.
Danish farmers realised they are a relatively small group competing in the international trading environment. Consequently, they have a strong commitment to collaboration to achieve success – via marketing cooperatives such as Danish Crown 1 or other cooperatives supplying inputs akin to the DLG Group2, the largest farm supply company in Europe.
Facilitating investments in research and development and training of technical staff has also augmented the Danish food industry.
Strong emphasis is placed on research and development, a paramount government policy in recent years. Synergies with universities ensure that food-related research is carried out into everything from primary production to process technology and from final food products to markets and consumers.
The three major universities – the University of Copenhagen, Aarhus University and the Technical University of Denmark – account for most of the food-related research in Denmark.
Partnered with the Food, Agriculture and Fisheries Ministry, the Danish Agriculture and Food Council complements the government’s objectives in underpinning the food industry by investing in research and development. Government grants are given for development programmes.
Mutually beneficial partnerships across the ecosystem have built new knowledge and innovative dominance, which might be the key to the country maintaining its international competitiveness.
Danish producers of process equipment and ingredients export 80% and 95% of their goods respectively.
Enormous potential exists for the development of the food sector in Malaysia, as land mass in Malaysia is not an issue. We can learn a lot from the Danes on building a sustainable ecosystem for the food industry.
Federal government agencies like the Federal Agricultural Marketing Authority (Fama) should be rebranded and renamed the Food Authority of Malaysia to undertake a proactive and pivotal role in the development of the food sector in Malaysia. Parliament should amend the Fama Act to broaden the scope of the agency’s activities and make it the focal agency responsible for the development of the country’s food ecosystem.
Officials from Fama, the Agriculture Ministry and agro-based industries, relevant universities conducting research on the food sector, the Malaysian Investment Development Authority, the Malaysian External Trade Development Corporation and the private sector should visit Denmark to undertake a comprehensive study of its food industry.
Fama can assist in implementing the Danish model and emphasise the development of cooperatives that major food companies can tap for expertise. Only then will Malaysia be in a position to modernise its food industry and become internationally competitive.
The government should engage Danish specialists in the respective fields as consultants to undertake a comprehensive study of the food industry in Malaysia and put forward proposals and recommendations not to only achieve food self-sufficiency but also turn Malaysia into a major food exporter.
Note: The writer was the director of the Malaysian Investment Development Authority from 2010 to 2014 at the Embassy of Malaysia in Sweden and covered Denmark during the course of his official duties.