Competitive analysis of paddy production in malaysia

Agriculture plays a critical role in economic development, food security and rural livelihood worldwide. Rice is a staple food consumed by 3.5 billion people\ particularly in South Asia. Asia accounts for 84% of global paddy production, and by 2023, a total of 523.7 million tons of paddy was harvested. Malaysia emphasizes that rice constitutes 26% of daily calorie intake and imports are needed to meet a significant portion of domestic demand. The Malaysian government plans to increase the rice self-sufficiency level to 75% by 2025. However, factors such as climate change, rising costs and competition affect crop productivity. In this study, a competitiveness analysis is conducted in the state of Perlis, Malaysia using Porter's Diamond Model. The aim of study is to examine the farmers' strategies and sustainability in the production process. A face-to-face survey was conducted in the research area using a complete enumeration and stratified random sampling method. Based on stratified random sampling, the number of businesses to be surveyed was determined as 68 at a 90% confidence level with a 10% margin of error. The results show that the average age of farm owners is 59.94 and 39% of them are university graduates. In paddy farms, land tenure consists of an average of 70.77% rented and 29.23% owned land. The average active capital of businesses is 78,262.60 USD of which 87.97% is farm capital and 12.03% is operation capital. In terms of liabilities, 94.17% is equity capital and 5.83% is foreign capital. The average gross output value is 9,361.02 USD of which 94.75% comes from crop production. Most of the production costs in paddy production consist of variable costs (96.28%), while fixed costs remain at 3.72%. The gross profit per decare is 115.20 USD, while the net profit per decare is 111.23 USD/da. The average net income is 5,011.58 USD with a value of 123.32 USD/da. According to the Porter's Diamond Model that is being conducted, factors such as input conditions, demand conditions, firm strategies, supporting institutions and government influence in the study area indicate that competitiveness is at moderate level. In conclusion, paddy production should be increased and supported; otherwise, Malaysia's agriculture future may be at risk.