• editor.aipublications@gmail.com
  • Track Your Paper
  • Contact Us
  • ISSN: 2456-8635

International Journal Of Horticulture, Agriculture And Food Science(IJHAF)

Economic Climate Model of the Oil Palm Production in Malaysia

Ali Chizari , Zainalabidin Mohamed , Mad Nasir Shamsudin , Kelly Wong Kai Seng


International Journal of Horticulture, Agriculture and Food science(IJHAF), Vol-1, Issue-3, September - October 2017, Pages 27-32, 10.22161/ijhaf.1.3.6

Download | Downloads : 17 | Total View : 1460

Share

Climate change is arguably one of the most important factors influencing agricultural production in developing countries such as Malaysia. Therefore, it becomes important to explore the impacts of climate change on agricultural yield and production. Cocoa was brought to Malaysia for commercial planting in the 1950s. The palm oil industry grew to become the first major commodity crop in Malaysia. This study applied the autoregressive distributed lag (ARDL) co-integration approach over the periods (1980 – 2014). There are two main methods including the Regional Climate Model (RCM) which can reasonably produce appropriate projections that can be used for climate scenario generation in a country-scale. Based on this information, this study considered three scenarios: 1) First Scenario, Rainfall changes 2) Second Scenario,Temperature changes 3) Third Scenario, Scenario 1 and 2 simultaneously. Preliminary results from the Autoregressive Distributed Lag (ARDL) model applied indicated that despite the projected changes in the climate variables (temperature and rainfall),in scenario 1 (the projected changes (5% increase) in rainfall). The result showed that climate variables (rainfall and temperature) have negative impacts on palm oil yield. The production trend is expected to be positive while changes in rainfall (5% increase), changes in temperature (2% increase) and simultaneous changes in rainfall (+5%) and temperature (+2%) will cause the yield to decline by 0.24%, 0.58%, and 0.82% respectively.

Climate Model, Oil Palm, Malaysia, ARDL.

[1] AGEB, 2015. Arbeitsgemeinschaft Energiebilanz (AGEB).https://www.rainforest-rescue.org/topics/palm-oil
[2] Asari, F.F, Hayati, N.H.A, Razak, E.A.A, Ahmad, B.A.S, Harun, N.F.A, and Jusoff, K., 2011. A Time Series Analysis of the Relationship Between Total Area Planted, Palm Oil Price and Production of Malaysian Palm Oil, World Applied Sciences Journal, Vol. 12, pp. 34 - 40.
[3] Auffhammer, M., Hsiang, S. M., Schlenker, W., and Sobel, A., 2013. Using weather data and climate model output in economic analyses of climate change. Review of Environmental Economics and Policy, ret016.
[4] Bank Negara Malaysia, 2011.Bank Negara Malaysia Annual Report 2011, P27
[5] Basiron, Y., 2007. Pakistan-Malaysia Palm Oil Trade: Why Buy Malaysian Palm Oil, presentation slide Downloadable from: http://cfile213.uf.daum.net/attach/20172A574DAFE5E4179D63, retrieved on 08 January 2011.
[6] Brodie, J. F. (2016). Synergistic effects of climate change and agricultural land use on mammals. Frontiers in Ecology and the Environment, 14(1), 20-26.
[7] Christopher Teh Boon Sung, 2012. Effect of climate change on oil palm yield in Malaysia: Some simulations, Extraordinary Minds Discuss Ideas.
[8] Corley, R. H. V., Tinker, P. B. H., 2015. The Oil Palm, 5th Edition, ISBN: 978-1-4051-8939-2,680 pages. October 2015, Wiley-Blackwell
[9] Dell, M., Jones, B. F., and Olken, B. A., 2014. What do we learn from the weather? The new climate–economy literature. Journal of Economic Literature, 523, 740-798.
[10] Edy Sigit Sutarta, Heri Santoso, and M. A. Yusuf, 2015. Climate Change on Oil Palm: It’s Impacts and Adaptation Strategies. https://www.researchgate.net/publication.
[11] Faruk, A., Belabut, D., Ahmad, N., Knell, R. J. and Garner, T. W. J. (2013), Effects of Oil-Palm Plantations on Diversity of Tropical Anurans. Conservation Biology, 27: 615–624.
[12] Jamal Othman, and Yaghoob Jafari, 2014. Selected Research Issues in the Malaysian Agricultural Sector. Jurnal Ekonomi Malaysia, 482, 127–136. \cite{JamalOthman2014}
[13] Kwan Kok Foo, 2010. Climate Prediction and Information for Decision Making in Malaysia, APEC Climate Symposium 2010, APEC Climate Centre APCC, Busan, Korea, 20 –24 June 2010.
[14] Lam Kuok Choy, 2014. The analysis of rainfall variability and response of oil palm phenology in tropical climate using MODIS vegetation index, Rotterdam, The Netherlands.
[15] Malaysian Investment Development Authority (MIDA), 2012
[16] Malaysian Palm Oil Board (MPOB), 2015. Malaysian Oil Palm Statistics, various issues (2014-2015).
[17] MP, 2015. Eleventh Malaysian Plan, 2016-2020, Kuala Lumpur: Government Printers
[18] Nelson Fu Yee Kium, Master of Science, 2014. Analysis of Malaysian Pepper Market Model.
[19] Paterson, R. R. M. et al. Future climate effects on suitability for growth of oil palms in Malaysia and Indonesia. Sci. Rep. 5, 14457; doi: 10.1038/srep14457 (2015).
[20] Pesaran, M. H., and B. Pesaran, 1997. Working with Micofit 4.0: Interactive Econometrics Analysis. Oxford University Press, Oxford.
[21] Pesaran, M. H., Shin Y. and Smith R. J., 2001. Bounds Testing Approaches to the Analysis of Level Relationships. Journal of Applied Econometrics 16,289-326.
[22] Pindyck, R. S., 2013. Climate change policy: What do the models tell us? Journal of Economic Literature, 513, 860-872.
[23] Shamsudin, M. N. (2008) Econometric Modelling For Agricultural Policy Analysis and Forecasting: Between Theory and Reality, Journal of Quantitative Methods, Vol. 4(2), pp. 1 — 18.
[24] Talib, B.A., and Darawi Z., 2002. An Economic Analysis of the Malaysian Palm Oil Market, Oil Palm Industry Economic Journal, 2(1), 19-27.
[25] Vaghefi, N., Shamsudin, M. N., Makmom A., and Bagheri, M. (2011). The economic impacts of climate change on the rice production in Malaysia. Int. J. Agric. Res., 6: 67-74.
[26] WWF, 2016. http://www.worldwildlife.org/initiatives/climate
[27] Zahid, Z., M. Nasir, S., Zainalabidin, M., and Shehu Usman, A, 2012. Economic Impact of Climate Change on the Malaysian Palm Oil Production. Trends in Applied Sciences Research, 710, 872–880.