A Cost Analysis of Paddy Transportation and Distribution Systems in the Muda Agricultural Development Authority Granary Area

This study attempts to develop an efficient paddy transportation and distribution systems in the Muda Agricultural Development Authority (MADA) granary area. This paddy production area is selected because it is one the largest paddy production area and it has the largest number of paddy post production participants. In order to achieve the research objectives, three analyses were undertaken; namely the descriptive analysis, modeling and estimation of transportation related cost functions using econometric models and linear programming model analysis. Cross sectional data which were obtained from survey were used to describe the characteristics of the respondents and were used to compute related costs and estimation of trucking cost, queuing cost and road charges. Survey on 741 transportation participants who were mainly lorry drivers and operators was carried out to obtain the relevant data. Data on paddy production for season 1 and 2 were obtained from MADA and data on rice mills' drying capacity were provided by BERNAS and the Ministry of Agriculture (now, the Ministry of Agriculture and Agro-based Industries). The study revealed that the majority of vehicles used to transport paddy from farms to procurement centres were between 1 to 3 tonne loading capacity. The mean load was 3.2 tonnes and the mean distance from farm to mill was 5.8 kilometers. Data analyses were conducted by three vehicles classes and they were categorized in terms of loading capacity; i. less than 1 tonne, ii. 1 to 2 tonnes, and iii. 2 to 3 tonnes. This analysis was conducted to determine the relationship between cost and vehicle size. The computed trucking cost gave the expected results, that was, trucking costs per tonne of paddy for vehicle with the sizes of less than 1 tonne, 1 to 2 tonne and 2 to 3 tonnes were RM7.75, RM6.56 and RM5.84 respectively. Survey data were then used to estimate paddy transportation costs, specifically trucking cost, queuing cost and road charges. Linear, quadratic, cubic and logarithmic functional forms were used to estimate these costs. The logarithmic function exhibited the best estimates for trucking cost and linear functional form was chosen for road charge model. Logarithmic form for trucking cost function was chosen for analysis due to its relative higher R square value and high Fstatistics as compared to other forms estimated. Linear programming based transportation model analysis was used to determine the optimal transportation cost and quantity of paddy distributed to procurement centres. The solutions revealed that 10 mills were idle in both seasons, 11 mills were idle in one of the seasons, 10 mills were allocated less than the required amount of paddy in one of the seasons, and 1 mill received paddy less than the demand in both seasons. The results illustrate the unbalanced situation between paddy production and number of rice mills in the granary. The results also implied improper planning in terms of setting up rice mills. The difference between the optimal transportation cost and the actual transportation cost indicate some level of cost efficiency of the existing system. Comparison between transportation cost and road charges provides a measurement for transportation service pricing efficiency. The model’s solutions also indicated that there was a slight difference in the average actual trucking cost and the average optimal trucking cost but a considerable difference existed between average trucking cost and average transportation service price. The small difference in the average optimal and average actual trucking cost indicated that a level of cost efficiency had been achieved. However, a considerable gap between the average cost and the average road charge denote that the farmers had been highly charged for transportation services

Shrimp trade competitiveness of Malaysia and selected ASEAN countries

This article investigates the level, composition, and sustainability of the trade competitiveness position of Malaysia among some of the world producers of shrimp commodities in Association of Southeast Asian Nations (ASEAN). The growth rate in the shrimp balance of trade (BOT) surplus had increased the most in Malaysia whereas Singapore recorded the highest growth rate in the shrimp BOT deficit. The trend of the relative trade advantage indices indicates that, among the ASEAN-5, Malaysia and Thailand maintained trade competitiveness in fresh shrimp while Indonesia remained competitive in exporting preserved shrimp. Further, the analytic hierarchy process exerts that Thailand possesses the highest competitiveness ranking in shrimp. To be as competitive as Thailand, Malaysia needs to develop a target area of concentration for shrimp production. This will help the government to introduce and implement policies to mitigate the alleged coastal destructions and environmental pollutions and to provide transparency in the shrimp supply chains

Ranking the competitiveness of the ruminant meat and meat preparation sub-sector amongst Asean countries

The paper investigates the trade competitive positions of ASEAN countries for the meat and meat preparation sub-sector, specifically the ruminant category. The sub-sector has been chosen as it remains one of the main contributors to the food trade deficits in Malaysia despite the government’s promotion towards its production and consumption. This study, first examines the competitiveness of 20 food commodities in the meat and meat preparation sub-sector, namely the ruminant category (division 01) in Malaysia vis-à-vis selected ASEAN countries. We assess the competitiveness level by evaluating the Relative Trade Advantage (RTA). The indices are then used in pair wise comparisons to determine the countries’ competitiveness ranking. The data cover commodities in the HS 6 digits group over the period of 1998 to 2007. Thailand was ranked the highest in the sub-sector of meat and meat preparation for the ruminant category and Malaysia was ranked fifth

Demand analysis of food in Malaysia: A study of Malay ethnic

The objective of this study is to provide an insight into demand patterns of the Malay consumers for specific food categories in Malaysia. By utilizing Household Expenditure Survey 2004/2005, a system of equations of Linear Approximate Almost Ideal Demand System (LA/AIDS) model for 12 aggregated food products is estimated using a two-step estimation procedure. A Working-leser form of Engel function is also estimated to derive income elasticities from the estimated expenditure elasticities. This study shows that Malay consumers appear to have different food consumption patterns as compared to the general Malaysian diets. Malay consumers tend to increase their consumption of rice more than higher-value (meat and fish) and functional (vegetables and fruits) foods. Malay consumers are found to be very sensitive to the own-price of most of the food products, especially rice (-2.0241).Food, Linear Approximate Almost Ideal Demand System, Engel function

Technical efficiency of small and medium enterprise in Malaysia: a stochastic frontier production model

Small and medium enterprises (SMEs) play a vital role in the Malaysian economy and are considered as the backbone of industrial development in the country. However, SMEs’ value added is very much lower than that of large scale enterprises. The low productivity of physical inputs or factors efficiency may be attributed to the low level of value added. The objective of this study is to determine the technical efficiency of 7360 small and medium enterprises for the year 2004 using stochastic frontier model. Results show that the number of firms considered technically efficient is only 3.06 percent of the total firms, while total technical inefficiency varies from 0.30 to 97.10 percent. Thus, policy makers have to play an important role in promoting economies of scale and developing technical skills of labors, which will lead to higher efficiency levels among SMEs

Analysis of rice production instability in Southeast Asian countries

This study measures the extent of rice production instability and the sources of instability in selected rice producing countries of Southeast Asia. A time series data on rice harvested area, yield and production of five Southeast Asian countries was used to analyze the components of production changes (area, yield and interaction effects) from 1980 to 2010. The production data is categorized into two periods: (i) 1980/81 to 1994/95 and (ii) 1995/96 to 2009/10. The results show a significant increase in rice production in all the countries during the reference period. However, the effect of area and yield to increase production differs from one country to another. It is noted that instability in area, yield and production in countries (except for Malaysia) are positively related. Furthermore, the decomposition analysis indicated that changes in mean yield mainly contribute to mean production in Malaysia, Philippines, Thailand and Vietnam while change in mean area contributed larger in Myanmar. However, changes in area-yield covariance between periods made a negligible contribution to the change in rice production

Evidence of Engel curves in food away from home: A study of Malaysia

As Malaysians’ per capita income continues to grow, the food budget shares declines, which refers to Engel’s law. However, the statistics of the various Household Expenditure Surveys in Malaysia reported increasing food away from home (FAFH) budget shares which concerns whether the notion of Engel’s law can be extended to FAFH. By using Household Expenditure Survey 2004/05, the Heckman two-step procedure was applied with the Working-leser and other functional forms to conduct the Engel curves analyses. The empirical results exhibit the same observations as laid down in the Engel’s law. All the estimated expenditure elasticities of demand for FAFH were less than unity. Thus, this study verified that the notion of Engel’s law can be extended to FAFH in Malaysia.Engel’s law, food away from home, expenditure elasticity

Determinants of cost efficiency of smallholders pepper in Sarawak, Malaysia

Pepper crop (Piper Nigrum L) is one of an important source of income for 67,000 rural families in the interior areas of Sarawak. This study is carried out to estimate technical, allocate, and cost efficiency among smallholders pepper in Sarawak. Then, the determinants of cost efficiency among smallholders pepper also investigated. It will identify the sources where improvements can be made to help the pepper farmers to minimize production cost. This study used 678 of smallholders pepper and the data is obtained from the field survey that was conducted in the month of August to December 2009. This study used a constant return to scale (CRS) input-oriented model to estimate technical efficiency and a Cost-DEA model is used to estimate cost efficiency. Mean of technical, allocative, and cost efficiency are 0.567, 0.585, and 0.438, respectively. Farmers are not efficient in input utilization and are not producing pepper yield at minimum input and minimize cost. The inefficiencies are due to misallocation of resources used. The contacts with extension agents per year, joining farmer’s organization, full-time pepper farming, and participating in farming courses and study visit and education level is positively and statistically significant with cost efficiency among smallholders pepper

Emerging food demand behaviors in Malaysia: Incorporating quality effects in demand analyses

In this study, the focus is on analyzing food demand behaviors in Malaysia. To be more specific, this study intends to estimate demand elasticities for twelve food categories with incorporation of food quality effects in the demand analyses. This study analyses the data from the Household Expenditure Survey 2004/2005 by Linear Approximate Almost Ideal Demand System (LA/AIDS) and unit value function. The estimated expenditure elasticities indicate that there will be growing demand for all the food categories, especially meat, fish, vegetables, oils and fats, and fruits. The own-price elasticities for rice, eggs, beverage, and oils & fats are more elastic than the rest of the food categories. This study also shows that there is quality effect in food demand.Food, demand behaviors. quality effects, demand analysis

Demand analyses of food in Malaysia: Effects of model specification and demographic variables

Demand analyses of food are deemed important to provide up-to-date indications of the demand behavior in future. This study is to determine which the model specification, as well as analyze the effects of demographic and socio-economic factors on of food demand in Malaysia. Household Expenditure Survey 2004/2005 data is analyzed by using Working Leser, Linear Engel model (LEM), Quadratic Engel model (QEM), and Linear Approximate Demand System (LA/AIDS). The empirical shows that LEM and QEM provide better results, in term of adjusted R2 and rationality of expenditure elasticities. Also, demographic variables improve the performance of all the selected models.demand analyses, food, Malaysia, expenditure elasticity