Making the bioeconomy inclusive

Last week, I had the privilege of meeting with Noble Peace Laureate, Professor Muhammad Yunus who revolutionised banking for the poor through Grameen Bank that he founded in his home country Bangladesh.

We were attending the three-day Pangkor International Development Dialogue 2016 in Ipoh to deliver the keynote addresses, hence I managed to sit down and exchange views with this humble man.

Although I was meeting him for the first time his down-to-earth personality made me feel like I have known him for so many years.

We talked for just over 30 minutes at a small meeting room in the event venue, Casuarina@Meru but that brief meeting deeply inspired me.

Prof Yunus pioneered the concept of micro-financing and micro-crediting – a form of banking service to grant the underprivileged access to quality banking services.

This idea grew from his observation and concern for the poor, and he believed that to help alleviate them from poverty, they have to be empowered with financial principles and be granted small loans.

As conventional banks did not cater to their needs, Prof. Yunus founded Grameen Bank in 1967 to research on how a new system could provide banking services to the marginalised, which we would later come to recognise this new funding mechanism as microfinancing.

This model had since benefited millions of people not only in Bangladesh but other countries, and had inspired over a hundred developing countries to follow suit. Closer to home, the micro-credit programme implemented by Amanah Ikhtiar Malaysia (AIM) is in fact a mirror of Prof Yunus’ model.

Since its establishment in 1987, Amanah Ikhtiar has given out loans of more than RM15 billion to over 382,178 borrowers with 72, 246 of them going to Sabahans – the most compared to any other states in Malaysia.

Prof Yunus and Grameen Bank were rightfully awarded the Nobel Peace Prize for 2006 for their work in “creating economic and social development from below.”

Prof Muhammad Yunus.jpgWith Prof. Muhammad Yunus at the Pangkor International Development Dialogue 2016.

During the meeting, I expressed that I too, believe in a “People’s Economy”, as supported by the government and laid out in the Eleventh Malaysia Plan, where we empower the people and place emphasis on societal development through various specific programmes.

The Bioeconomy Community Development Programme (BCDP) is one such programmes that promote inclusiveness in the economy.

It is an initiative of Bioeconomy Corporation, an agency under the purview of the Ministry of Science, Technology and Innovation (MOSTI), and by being inclusive; it leads to growth and wealth that can be distributed in a socially and economically equitable manner.

It was a mandate given by the Prime Minister Dato’ Sri Najib Tun Razak himself as announced in Budget 2014 where the Government would implement the BCDP and under the programme, idle lands would be developed through the application of biotechnology as well as for contract farming to increase the value-added of the agro-based industry and income of farmers.

Projects from the BCDP could also elevate the household income of the lowest 40 per cent group (B40) and help them develop bio-agropreneurial skills.

In line with a people-centric economy, BCDP was designed to enlist rural farmers and the farming community to supply raw materials to biotechnology companies to create novel, innovative and high value-added bio-based products.

The BCDP is not a new concept of getting people to venture into farming, but the partnership between farmers and BioNexus status companies, a special status awarded to qualified international and Malaysian biotechnology companies that entitles them to certain support, is a unique one.

Farmers and their cooperatives or associations would leverage on funds from BCDP for trainings and essential farming purchases.

The involvement of anchor BioNexus status companies would allow for a buy-back guarantee arrangement with farmers, and informing them on what crops to grow, and their pricings in the market.

Simultaneously, these anchor companies would have a consistent supply of raw materials for the downstream development of bio-based products.


Mechanism of BCDP.
Source: Bioeconomy Corporation

This concept of cooperatives meanwhile, is not hard to digest. The cooperatives in BCDP are commercial organisations owned by farmers to collectively sell their farm produce. It allows growers to accomplish collective functions they could not achieve on their own.

Such collaborations with other producers empower them in the marketplace where large agribusiness, clients of their produce, usually have the last say.

Producers would now have stronger negotiation power over their sales as they bypass one or more middlemen, subsequently raising their incomes.

Another hallmark of the BCDP is the application of bio-based technologies, a distinct advantage over conventional contract farming.

The adoption of bio-based technologies, tools and other high-tech farming technologies in current agricultural practices would enable farmers to improve their yields, standards and productivity.

As a result, BCDP projects can be executed more efficiently compared to conventional farming as less time is needed in managing the crops.

From an economic perspective, the programme is deemed to contribute to an additional income of RM4,500 per month per farmer. To date the BCDP has directly impacted 747 farmers and indirectly 3,586 people.

For the private sector, the BCDP programme is expected to increase the incomes of BioNexus status companies and BTP Trigger Projects to an average of RM 4.5 million per year per company, through the sustainable supply of raw materials by these farmers and reduce import substitution with savings up to RM 0.45 million per year per company.

Synergy is the key to cost-saving in BCDP. BCDP is part of the National Blue Ocean Strategy (NBOS) initiative, as it applies the NBOS principles of “high-impact, low cost, rapid execution”. Through collaboration with the public and private sector, BCDP projects are carried out at minimal cost.

The bee farming project in Kuala Linggi for example, is implemented with collaboration with MARDI Research Station.

The minimal cost enables Persatuan Penternak Madu Lebah Komersial Kuala Linggi to maximise its profit while leveraging on the abundance of food source for bees from the Acacia and Melaleuca trees located at the project site.

The involvement of BioNexus status companies and Biotechnology Transformation Programme (BTP) Trigger Projects also greatly reduce other operational costs such as for land clearing, procurement of equipment and training fees.

In Sabah, BCDP could certainly capitalise on the state’s abundant natural resources to produce value-added food and specialty products based on botanicals, aquatic plants and fauna.

Some BCDP projects that are in the pipeline in Sabah include seed production and bee farming in Kimanis, and shrimp aquaculture in Pitas.

A notable is the expansion of the Shiitake mushroom production facility by Koperasi Pembangunan Desa via Agrodesa Sdn Bhd.

The BCDP essentially reflects a model of inclusiveness and sustainability, even in the midst of an agricultural transformation and in the new economy.

It opens up a new avenue for wealth generation by elevate the socio-economic status of the rural communities.

I certainly hope that the success of these pilot projects in Sabah could encourage more participation in the BCDP.

This article was also published in the Daily Express Sabah on Sunday 11th September 2016.

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