Malaysia can learn several lessons from Denmark in the food sector, which we must quickly implement to reduce our dependence on imports, says Benedict Lopez.
Last year, Malaysia’s food import bill stood at a RM45bn – a staggering figure for a country with a population of 30m.
Being heavily dependent on imports to feed our people does not augur well for our food security. In the event of an emergency, it is our periuk nasi (rice bowl) that will be our prime consideration. Not our skyscrapers, hi-tech industries or services sector.
Unfortunately, it looks as if the food sector in Malaysia has taken a back seat in our quest to achieve developed nation status by 2020. This is short-sighted, to say the least. Reliance on imports can leave us exposed during an economic downturn or when climate change worsens. A weaker ringgit has already made imported food more expensive.
What can we do to reduce our food import bill? Malaysia can learn several important lessons from Denmark in the food sector, which we must quickly implement to reduce our dependence on imports.
For any foreigner familiar with the land of Hans Christen Andersen, it is not the literary world that the country is renowned for; rather, it is the amazing success story of Denmark as a major supplier of one of humankind’s essential needs – food.
In 1814, famine broke out in the country and it was unable to feed its people. But today, tiny Denmark, which covers a land mass only 13 per cent the size of Malaysia, produces enough food products for 30m people (the same population as Malaysia), even though its population is just over 5m. Danish food exports currently account for around 20 per cent of Denmark’s total exports.
I know the food sector in Denmark quite well, as I had covered and travelled all over country for nearly five years from 2010 to 2014, and I still visit the country at least once a year. I have always been spellbound by the incredible strides this southernmost Nordic country has made in food security. Something new seems to be always cropping up in the Danish food sector.
During my meetings with public sector officials, universities, industry associations, food parks and major corporations, I have observed the underlying and deep-rooted commitment, synergistic effects and cooperation of all concerned parties that has contributed to Denmark’s recognised prominence in the food sector. The perseverance and resolve is conspicuous at all levels, with everyone assuming a fundamental role for the national interest.
Progress in this sector is a classic example of Denmark’s robust competence to adopt, adapt and profit from changes and the new opportunities arising in the 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. The Danes have even garnered such an international reputation for pastries that these are today simply known as Danish!
From the development of the Danish food ecosystem, international renowned companies have evolved.
With one of the world’s most advanced food processing sectors, 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), Carlsberg (beer) and Palsgaard (emulsifiers and stabilisers).
Denmark is also home to global leaders such as Novozymes (enzymes), Christian Hansen (food ingredients) and Royal Greenland (fish and seafood production and processing).
Flourishing on a vibrant ecosystem
The Danish food industry today is built completely on an ecosystem, and moving 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 co-operatives.
Major food producing companies in Denmark have thrived via the establishment of co-operatives initiated by farmers to consolidate their position along the ecosystem.
Danish farmers realise they are a relatively small group competing in the international trading environment. Consequently, they have a strong commitment to collaboration to achieve success – via omarketing co-operatives such as Danish Crown1 or other co-operatives supplying inputs akin to the DLG Group2.
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, as a cornerstone for the development of the food sector.
The Danish government, farmers and the food industry remain committed to sustained investments in research and development and training of technical staff for both the farm and the food sector.
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 food-related research in Denmark.
Partnered with the Ministry of Food, Agriculture and Fisheries, the Danish Agriculture and Food Council complements the government’s objectives in underpinning the food processing industry by investing in research and development. Government grants are given for development programmes.
Mutually beneficial partnerships across the cluster 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.
Replicating the Danish model in Malaysia
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 an 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 pro-active 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 country’s food eco-system.
Officials from Fama, the ministry of agriculture and agro-based industries, relevant universities conducting research on the food sector, the Malaysian Investment Development Authority (Mida), 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 the implementation of the Danish model and emphasise the development of co-operatives, from which major food companies can tap into their expertise and synergise their operations. 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 to not only achieve food self-sufficiency in the country but also turn Malaysia into a major food exporter.
Danish Legislative Council Secretariat