7. The agriculture co-operatives of Malaysia

by Abdul Rahim Rahmat

 

The Co-operative movement of Malaysia was established in 1922 to meet the financial demands of the rural farmers and government servants, who were heavily indebted to money lenders and landowners. Since then, the co-operative movement has been regarded as a benevolent institution to alleviate the socio-economic conditions of the under-privileged population.

The Malaysian co-operatives at present, however can be classified into three broad categories:

(a) Non-agro-based co-operatives which are mainly in the urban areas (registered, supervised and controlled by the Co-operative Development Department, Malaysia)

(b) Agro-based co-operatives and farmers’ organizations (registered, supervised, controlled and developed by the Farmers’ Organisation Authority, Malaysia); and

(c) Fishermen’s associations and fishermen co-operatives (registered, supervised, controlled and developed by the Fishery Development Authority, Malaysia)

In an attempt to activate the agricultural sector three types of agriculture co-operatives have been organised in Malaysia.

These are:

i) the area farmers organizations (APOs) which can be formed by the farmers when at least 50 of them see the need to do so;

ii) agro-based co-operatives formed by at least 100 farmers or fishermen whose principle objects or main functions concern agricultural production, agricultural credit, fishing, marketing or processing or any such commercial and trading ventures; and

iii) the fisherman associations which can be established by at least 50 fishermen intending to work together in their field.

As the membership of the APOs represent about 556% of the total agriculture co-operatives in Malaysia focus hereafter would likely be on the farmers’ organizations.

The basic agribusiness activities performed by the AFOs include the supplies of agricultural inputs, marketing of agricultural produces of members, farm mechanization and agricultural production.

AFOs can be said to have played a beneficial and effective role in providing agri-business services to farmers actively involved in agricultural activities. AFOs role is especially felt in areas where there is intensive agricultural activities. In such areas the services that AFOs offer is clearly needed by the farmers.

There are new formal and informal groups that have been established by certain agencies. These new formal groups involve agrobased co-operatives which are not registered under the FOA. These co-operatives have specialized function involving land development, rubber and even rural development. The situation seems tending to revert to the pre-FO period, which was the very reason for the formation of FO.

The farmers organization today are facing a crucial challenge as the Malaysia agriculture undergoes structural changes and many of its members swift to urban centres. Thus the FOs have commenced taking steps to diversity their agricultural and non-agricultural portfolios. They are currently upgrading their managerial expertise and strengthening their communication and extension services with their members.