Letters to the Editor

The government's economic policies

There are many economic policies of the government that I believe must be reconsidered. First of all the idea of identifying agriculture as the thrust sector of the economy. I think protectionism is the word better associated with agriculture. A thrust sector is normally defined as the sector that drives the entire economy of a nation. The wealth generated in this sector creates employment in other sectors and it accounts for the largest marginal addition to GDP. Now as it is with agriculture:

1) Prices of agricultural produce and products are subject to considerable fluctuations which leads to low farm incomes in some years, consumers having to pay more in others, producer uncertainty and a subsequent lack of investment.

2) Farm incomes rise less quickly than other incomes as instanced in Honduras when in 1987 they had to purchase one tractor for 3 tons of bananas and in 1998 one tractor cost them 14 tons of bananas (Geography in Action 2, Chapter 3: Asian Revolution). It is for this very reason that Malaysia diversified itself from what was once a country dependant on tin and rubber exports that accounted for over 50 per cent of GDP to what is now one of the Tiger Economies of Asia. And that did not happen with agriculture as their thrust sector.

Yes it is true that our agriculture sector requires protection against competition like that in all economies of the world, and it is important for poverty alleviation but calling it a 'thrust sector' would be wrong and maybe an economic blunder.

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