CUSTOM FARMING (SERVICE PROVIDING) SYSTEM IN PADDY FARMING IN MALAYSIAN GRANARY AREA

Abstract

Rice is an important food commodity in Malaysia and remains relevant to
agriculture sector in Malaysia and this subsector is essential to ensure national food
security. According to Muda Agriculture Development Authority (MADA) (2008), 90% of
the farmers used modern mechanization and outsourcing their farm operations such as land
preparation, seedling, planting, fertilizing, pest and diseases managing and harvesting. For
these farm operations, the service for machinery and wage labor was provided by private
service providers and Area Farmer Association (AFO). Custom hiring (Service Providing)
System is really important due to the risen in the cropping intensity (Double Cropping
System) and farm size (economic scale) in paddy farming in Muda granary area. However,
how this custom farming system (Service Providing System) was established and the
reason why they are still relevant until now was not yet identified. This study attempts to
investigate the actual status of the service providing system (custom farming) in paddy
farming in Muda area. This research focus on the role of service providers and the brokers
as the middleman in service providing system that shows on how they cooperate and
provide various services to farmers. Several aspects may influence the loyalty of farmer to
the provider and broker such as reasonable rate of payment given by the provider and close
relationship from generation to generation. However, there might be some ambiguity about
the way of services performed by the provider and the broker. Therefore, by identifying
any problems exist in this system, it will determine whether this system is effective or not.
Subsequently, a better guideline or policies have to be created in order to improve the
smoothness of the service providing system comparable with custom farming system in
countries such as United Stated and Japan.