Technology-related investments in Malaysia’s agribusiness sector are expected to pick up over the next five years, as 5G connectivity becomes more widespread and the state’s support for increased productivity and efficiency takes shape, BMI Country Risk and Industry Research said last Friday.
The Fitch research unit said in a note that artificial intelligence (AI)-powered solutions and applications, delivered via 5G networks to a growing ecosystem of connected devices, will support increased sophistication of the agribusiness value chain, from production through to sales and distribution.
It is noted that Malaysian fixed-mobile telco CelcomDigi has entered into a partnership with hyperlocal farming solutions developer BoomGrow under which 5G-delivered artificial intelligence (AI) and extended reality (XR)-based applications will be used to provide precision farming solutions to a sector yet to fully embrace digital transformation.
By tapping CelcomDigi’s 5G network, BoomGrow Machine Farms can connect to a range of integrated sensors and monitoring systems that can offer farmers realtime information on crop health and growth, environmental conditions and location data for machinery such as tractors.
According to BMI, AI solutions can offer up deeper analysis, such as identifying pests or diseases and suggesting solutions that can speed up decision-making processes and improve overall productivity.
Significantly, Machine Farms are interlinked and, by pooling data from a wide variety of users, authorities will have access to information of critical importance within the sales and distribution channels as wholesale goods purchasers increasingly demand more complex data – for example, whether certain pesticides were used during the growth process – on the products they sell on to retailers.
Encoded in blockchains, such data could help Malaysia’s agribusiness sector improve its export capabilities and assist with the country’s economic growth.
It is noted that the agribusiness sector accounted for 7.9 percent of Malaysia’s gross domestic product (GDP) in 2023, versus 9.5 percent in 2022, a contribution rate that is forecast to decline to 5.2 percent by 2028 as the country faces greater competition from neighboring markets in fields such as cocoa, fruit and vegetable production.
Rival production centers, such as India, are proving more adept at integrating new technologies into existing production and logistics channels, while Malaysia’s agribusiness sector has proved less agile owing to the prevalence of under-resourced small and medium-sized enterprises outside the dominant palm oil sub-sector.
According to BMI, 5G is particularly well-suited to supporting local wireless data networks and processing large quantities of data in real time through AI-based applications.
However, the technology is not yet in widespread use in Malaysia, given that services were only initiated in 2021 and telco participation in the country’s first wholesale open access 5G network has been reluctantly given.
Having ceded control of the traditional infrastructure element of the mobile service provider business model, it noted Malaysia’s telcos have begun looking to develop industry-specific services and applications in order to diversify their revenue bases away from mass-market consumer offerings, and the agribusiness sector is one that is ripe for exploitation.
It is noted that over the last three years, the principal operators – CelcomDigi, Maxis and Telekom Malaysia (TM) – have been working on small scale projects with agricultural
technology (agritech) developers and with the agribusiness community, developing solutions and applications that could be commercialized on a larger scale in the future.
Increasingly, as is the case with the CelcomDigi-BoomGrow partnership, these projects will leverage high-speed, low-latency connectivity platforms such as 5G cellular networks, low-power wireless access networks (LP-WANs), satellites and fibre.
BMI forecasts the number of 5G connections in Malaysia to grow from 14.2mn in 2023 to 32.3mn by the end of 2033, resulting in a penetration rate of 55 percent by the end of the 10-year period.
Most of these will be mass-market voice and data communications connections, such as smartphones.
However, a growing proportion will be machines such as sensors, cameras and automated machinery.
“We forecast the number of cellular and other wireless-hosted machine (M2M) connections in Malaysia to grow from 1.6mn in 2023 to 3.0mn by 2033,” said BMI.
Malaysia’s BoomGrow partners CelcomDigi to launch 5G and AI-powered Machine Farms