Simulative Impact Of Environment-Friendly Production Method Of Sarawak Pepper On Domestic And Export Supply
The need to protect the environment and utilize natural resources in more sustainable ways is gaining greater importance worldwide. Firms of any industry that do not keep abreast with this on-going trend of development in the global economy might sooner or later be swept away from the current hig...
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| Main Author: | |
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| Format: | Thesis |
| Language: | English English |
| Published: |
2007
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| Subjects: | |
| Online Access: | http://psasir.upm.edu.my/id/eprint/5019/1/FEP_2007_4.pdf |
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| Summary: | The need to protect the environment and utilize natural resources in more sustainable
ways is gaining greater importance worldwide. Firms of any industry that do not
keep abreast with this on-going trend of development in the global economy might
sooner or later be swept away from the current highly competitive international
market regime.
Malaysia is an open economy that depends greatly on international trade for its
national economic development. Pepper (Piper Nigrum L.), the King of spices, is
grown in Malaysia predominantly (about 90%) for export market. To retain a
significant market share for its pepper export, enhancing competitiveness in its
pepper industry is a must. Hence, the objective of this study is to examine and assess
the economic effects of cost of environmentally sustainable pepper production
techniques and agricultural practices on production and export volumes in Malaysia.One of the major findings of this study is that chemical cost of pepper production
has a significant negative effect on the domestic supply of both black and white
pepper in Malaysia. Thus, to discourage farmers from using chemical inputs
indiscriminately, increasing the chemical cost is suggested as a policy option. The
simulation analysis reveals that environmental regulation to increase the chemical
cost would enhance export market competitiveness of both black and white pepper
in Malaysia. In fact, driven by the higher price incentive fetched for better quality
environmental-friendly pepper produced, farmers start to produce more and thus the
volumes of production and export would increase. In addition, welfare analysis also
indicates that the welfare of pepper farmers will improve by adopting low cost
sustainable pepper production methods.
In short, promoting environmental-friendly pepper production in Malaysia should be
given high priority. This is crucial to continue making Sarawak Pepper products
marketable in the increasingly competitive international market. Moreover, by
enhancing the competitiveness of the Malaysian pepper industry through the
adoption of environmental-friendly pepper production methods will also help pepper
farmers to meet a more stringent food safety, environmental and basic humanity
requirements imposed in the international arena. This will ultimately help to improve
the welfare of the Malaysian pepper farmers. This is particularly important so that
pepper industry will continue to play its vital role as a major source of foreign
exchange earnings besides being an important source of employment for some
74,710 households in the state of Sarawak. |
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