As the world moves towards adopting environmental, social and governance (ESG) factors in investing, food security forms an essential part of the dynamics:
- Environmental factors affect the food availability,
- social issues could arise due to lack of food intake and nutrition, and
- governance plays a key role in providing food security.
Addressing food insecurity is crucial as it can lead to a decline in productivity, demographic change, slowdown in economic growth, and political instability. Like many emerging economies, Malaysia also faces issues related to food insecurity, which impacts its economy and social well-being. Below is an outline of the challenges facing Malaysia’s food security and a look at how public-private partnership (PPP) and technology could be a source of solution to it.
Challenge 1: Import dependency
Self-sufficiency in food matters
Malaysia is not self-sufficient in many food items. According to analysis by the Franklin Templeton Institute, Malaysia relies 80-85% on imports of supply food to the population1. However, the reality on the ground is far more nuanced as part of the high dependency of food importation is by-design from the government’s policy.
- The focus of the government has been on the production of food staples, predominantly rice. Nonetheless, the import dependency lies at 50% for rice as of 20202 versus the government’s target of being 70% self-sufficient by the year 2020.
Given the risks in climate change, economic slowdown and geopolitical conflicts, it would be prudent to reduce dependency on imports or at least diversify the import partners as protectionism may increase.
Challenge 2: Nutritional intake
Long distance towards a healthy nation

With a rising consumer class due to rising disposable income and a growing population, Malaysians are demanding a greater variety of foods not found within Malaysia itself, and nutritional intake has increased with wide ranging implications for health.
- It is estimated that 1 in 5 adult Malaysians are living with diabetes,
- 1 in 3 are living with hypertension, and
- nearly half are overweight or obese3.
Challenge 3: Food wastage
Want not, waste not

Not only are Malaysians eating more, but food waste is also an issue. According to Solid Waste and Public Cleansing Management Corporation (SWCorp) in Malaysia, the nation wastes about 17,007 tons of food per day, of which 24% is edible wastage (an amount that can feed around 3 million people three times a day4. Food wastage takes place at different levels of the food supply chain, from:
- agricultural production,
- storage and transportation,
- to processing, distribution, and
- the consumer.
For instance, poor harvesting techniques or left-over eatables on the fields during agricultural production accelerates the demand for wastage systems.
Indeed, it is not an issue unique to Malaysia as governments from neighbouring countries also attempted to address food wastage at various stages of the supply chain. China’s government, for instance, launched a “Clean Plate” campaign in August 2020 to increase awareness and prevent its people from wasting food. While, in India, about 40% of food is wasted due to inefficient logistics, according to the National Agricultural Cooperative Marketing Federation. The Indian government introduced a new policy called “National Logistics Policy” in September 2022 to improve transportation, aiming to save time and money.
Challenge 4: Agri-workforce decline
Agri-workfore should not be “work by force”
Malaysia is also struggling to entice a new generation of workers to the agricultural sector. Between 1991 and 2019, Malaysia’s agricultural workforce as a share of the total workforce declined from 22% to 10%5.
- About 30% of the agricultural workforce are low-skilled that work in elementary operations6, potentially posing a challenge for the adoption of agricultural technology for food production.
Challenge 5: Climate change
A destabilising risk

Like many countries in the region, Malaysia is already feeling the effects of climate change such as flooding that affects crop yields, which in turn, impacting the food bowl, including the production of staples like rice.
- It’s estimated that Malaysia’s rice yield will decrease by 12% in the main season and 31.3% in the off-season until 2030 as temperatures
increase and precipitation patterns change7.
This has a ripple impact on the prospects of Malaysia’s food exports. For example, the US has restricted the importation of shrimp from Malaysia after the US authorities found antimicrobial contaminated shrimps.
Key to a more food-secure nation
Public-Private Partnership (PPP)
Greater collaboration and cooperation across government agencies, research institutions and the private sector can contribute to building a successful strategy towards a more food-secure nation. Improving food production, imports and logistics through technology would help build resiliency. A lot of technological development takes place with the involvement of private companies, potentially providing attractive investment opportunities.
These “digital natives” would help agriculture move up the value chain by embracing high-tech farming involving the use of sophisticated and integrated platforms, such as robotics, fertigation (combining fertilisation and irrigation), the use of new technologies to monitor production, harvesting and sorting of crops and the introduction of lab-grown and plant-based meats. For instance, the introduction of flood-tolerant rice in India has increase in rice production in this flood-prone nation8.
In essence, PPP enables the players within the food security ecosystem to converge and collaborate, and the investor as an enabler in providing funding resource for investments in food security-related technologies towards building a resilient food security system for the nation.
Endnotes
- As of 2020, Based on Franklin Templeton Institute’s calculations of data from FAO. Analysis by Franklin Templeton Institute. Notes Calculated import dependency pertains to that for staple foods (wheat, rice, corn barley) expressed as imports as a percentage of domestic supply.
- As of 2020, Based on Franklin Templeton Institute’s calculations of data from FAO. Analysis by Franklin Templeton Institute.
- Source: World Health Organization’s article titled “The annual health-care cost of cardiovascular diseases, diabetes and cancer in Malaysia exceeds RM 9.65 billion”, dated August 9, 2022.
- As of 2021, Source: Article by The Star titled “M’sians continue to waste food”, dated June 6, 2022.
- As of 2019. Source: International Labour Organization, World Bank.
- As of 2020, Based on Franklin Templeton Institute’s calculations of data from the International Labour Organization.
- Source: Tan, B.T.; Fam, P.S.; Firdaus, R.B.R.; Tan, M.L.; Gunaratne, M.S. Impact of Climate Change on Rice Yield in Malaysia: A Panel Data Analysis. Agriculture, dated June 21, 2021, https://doi.org/10.3390/agriculture11060569
- Source: https://borgenproject.org/flood-tolerant-rice-benefits/, dated February 27, 2021.
WHAT ARE THE RISKS?
This material is intended to be of general interest only and should not be construed as individual investment advice or a recommendation or solicitation to buy, sell or hold any security or to adopt any investment strategy. It does not constitute legal or tax advice. This material may not be reproduced, distributed or published without prior written permission from Franklin Templeton.
The views expressed are those of the investment manager and the comments, opinions and analyses are rendered as at publication date and may change without notice. The underlying assumptions and these views are subject to change based on market and other conditions and may differ from other portfolio managers or of the firm as a whole. The information provided in this material is not intended as a complete analysis of every material fact regarding any country, region or market. There is no assurance that any prediction, projection or forecast on the economy, stock market, bond market or the economic trends of the markets will be realized. The value of investments and the income from them can go down as well as up and you may not get back the full amount that you invested. Past performance is not necessarily indicative nor a guarantee of future performance. All investments involve risks, including possible loss of principal.

