The Sweet Taste of Agropreneurship
MGROW is a contract farmer that supplies its fresh produce to the Federal Agricultural Marketing Authority (FAMA) and to private companies mainly in the northern region of the country. In the international front, it has also brokered exporting deals to China, a promising market for the tropical fruit. Ting shares, “The market here has been very welcoming. We are excited to get an overwhelming enquiry from distributors and exporters, to the point that we had to say ‘no’ to some! It is a good problem and has boosted our conﬁdence in the product. But we recognise the high-demand and we plan to expand our farm soon so we can venture into more contract opportunities.” For MGROW, contract farming is a strategic component of the business growth. “Contract farming provides a set target that allows us to make precise decisions on how many acres of pineapples we are growing, how many the farm will produce, and when it will be harvested. Once the pineapples are planted, the only focus is to ensure we meet the deliverables,” says Ting.
Contract Farming continues to "Blossom" in Malaysia's Floriculture Industry
Contract farmers reap advantages that allow for a sustainable income and business growth. For instance, Treegrow Orchids engage contract farmers in Cameron Highlands via a standing order. The pre-agreed price ensures that the sell-price will not ﬂuctuate, thus enabling sustainable, stable income for the farmers. Meanwhile in peak seasons, exporters like Treegrow Orchids may also offer to purchase slightly more than the agreed quantity with a competitive price. At the same time, farmers are also keen to improve farming practices to ensure the quality of the crop and attract more business with existing and new exporters. In the case of Treegrow Orchids, farmers also beneﬁt from the transfer of technology and best practices from the company. “Whenever we notice that the crop quality is not up to standards, we take the initiative to visit the farm to identify problems with the farmers and provide free consultation to help tackle any issues,” said Seng Yee.
Nestlé in Creating Shared Value with Contract Farming
The Nestlé Chilli Club (NCC) is a contract farming model that supports local farmers who are contracted to supply fresh chillies for MAGGI Chilli Sauces. Working closely with Agricultural Services Department and the Farmers’ Association Board, it was ﬁrst introduced to the local farmers in Kelantan in 1995. For over 25 years since its establishment, NCC has since reached other parts of the country, namely Dungun, Terengganu and Kuala Langat, Selangor. In line with digital transformation in agriculture, Nestlé also appoints Agricultural Services professionals to equip farmers in leveraging technology to produce the highest possible yield, at par with global standards. In particular for Farmer Connect initiatives, Nestlé shares best practices with local farmers through the Sustainable Agricultural Initiative (SAIN) toolkit, speciﬁcally designed to train and assist farmers for better crop quality and yield.
Getting Started: FLFAM President shares advice for Beginner Contract Farmers
With the increasing focus on food security and safety, digitalisation is the way forward for the industry. Tan reiterates that the ﬁrst criteria to truly beneﬁt from technology is to implement a closed-house farm system. Aside from providing a better system in maintaining the climate, ventilation, watering system and sanitation, it is also the key in improving disease-control.
Towards a Vision of Shared Prosperity and Sustainability
“Even though Aqina Group is now fully-integrated, we also provide local farmers with the opportunity to participate in contract farming as well. This is in line with the government’s initiative towards shared prosperity and we support this vision wholeheartedly. At the same time, we are proud to contribute to the national economy by supporting local farmers, instead of relying on foreign labour. This ensures shared prosperity throughout the broiler chicken supply chain in Malaysia,” says Wesley Tan Seah Ging, Group Executive Director of Aqina Group.