JULY-AUGUST. 2026 | @ AGROBiz

• Government is targeting low-SSR commodities to reduce food import dependence.

• Production cannot be increased across all commodities due to crop suitability and commercial considerations.

• Rising demand from data centres and chip manufacturing is intensifying competition for land.

Deputy Agriculture and Food Security Minister Datuk Chan Foong Hin said the government was identifying

MALAYSIA has designated about 25,000 hectares as permanent food production zones as it moves to safeguard productive farmland amid rising competition for land from industrial and urban development.

Deputy Agriculture and Food Security Minister Datuk Chan Foong Hin said the government was also considering expanding the protected area, with the focus on ensuring existing foodproducing land remains available for the sector.

Chan said: " We hope to maintain a certain percentage. Especially, the current producing area should remain protected."

The designated area represents nearly five per cent of Malaysia ' s farmland, excluding palm oil and rubber plantations.

CHANGING LANDSCAPE

Chan assured that the government was working with state authorities to align land-use policies, as decisions on land administration fall under state and local jurisdictions.

The need to secure farmland has become increasingly important as Malaysia experiences rapid industrial expansion, particularly in data centres and chip manufacturing linked to the artificial intelligence( AI) boom.

PRAISING OUTPUT, CUTTING IMPORTS: Strengthening local production and maintaining adequate reserves are among measures to build a more resilient national food supply.

commodities where local production could be expanded based on their suitability and commercial potential.

He cited ginger, mangoes, rice and fresh milk as commodities with relatively low SSR levels of 15.5 per cent, 20 per cent, about 52 per cent, and 66.7 per cent, respectively.

A QUESTION OF SPACE: Protecting our productive farmland remains a key consideration as Malaysia balances development with long-term food security.

AI HARDWARE

A GROWING PARTNERSHIP

However, Chan said increasing production was not necessarily viable for every commodity, as Malaysia ' s climate, land suitability and commercial considerations had to be taken into account.

" Not all food crops are suitable for

Billions of dollars have flowed into the data centre industry, while Malaysia has also emerged as a major manufacturing base for AI hardware. The expansion has increased demand for land and infrastructure, with some major plantation companies also exploring data centre and solar farm developments.

" There is growing competition between industry and agricultural activities," Chan added, mentioning that the State and local governments see data centres as more profitable or more advanced than agriculture. " That ' s the dilemma."

He said Malaysia must balance its attractiveness as an investment destination with the need to maintain sufficient land for food production.

The challenge is compounded by urbanisation and infrastructure development. Land used for livestock farming has fallen by nearly half since 2017, while the sector ' s contribution to the economy and employment has also declined over the past two decades.

Chan said the permanent food-producing zones were part of the government ' s response to the competing demands on land.

" There is no simple answer, and we have to show the government ' s commitment to food security by creating the permanent food-producing areas ".- @ AGROBiz cultivation in Malaysia. Therefore, other commercial factors need to be considered," he said in reply to a supplementary question from Senator Abdul Nasir Idris during the question-and-answer session in the Dewan Negara.

Abdul Nasir had asked about commodities contributing to Malaysia ' s food import bill, which totalled RM93.7 billion in 2024, as well as possible incentives for Kedah in recognition of its efforts to preserve paddy fields.

Chan said grain corn was among the strategic commodities being prioritised, particularly given its importance as a livestock feed ingredient.

Beyond production, he said the government was also strengthening preparedness by managing food reserves.

SAFEGUARDING LAND

As of Jul 7, the country ' s physical rice stock stood at 1.05 million metric tonnes, equivalent to about 6.23 months of national demand.

Chan also highlighted measures to protect food-producing areas in Sabah and Sarawak, particularly in rural communities.

He said the government, through cooperation with PLANMalaysia, was developing the National Food Source Area Land Use Planning Master Plan to safeguard land designated for food production.

State governments in Sabah and Sarawak may also submit proposals under the National Agri-Food Empowerment Programme( PPAN) to obtain Federal funding for agricultural development in selected areas.

The initiatives are aimed at strengthening domestic supply while building greater resilience against external pressures on food supply.