The country has already set aside about 25,000 hectares through the Permanent Food Production Zones programme, which will help protect land from encroachment by industries, according to Indonesian Deputy Agriculture and Food Security Minister Datuk Chan Foong Hin. That’s nearly 5% of Malaysia’s farmland, excluding palm oil and rubber plantations.

Chan said Malaysia must preserve a minimum proportion of farmland and strengthen protection for existing food production areas. The Ministry of Agriculture and Food Security also plans to propose expanding the protected agricultural land.

The move comes as Malaysia has attracted billions of USD in data centre investments in recent years. According to HSBC Holdings, investment in the sector is equivalent to nearly 18% of the country’s gross domestic product (GDP).

Malaysia has also emerged as a major manufacturing hub for artificial intelligence (AI) hardware and is among the world’s four largest net exporters. Rapid industrial growth has prompted some palm oil companies to convert parts of their land for data centres and solar farms.

There is growing competition between industry and agricultural activities, Chan said, adding that the governments of some localities see data centres as more profitable or more advanced than agriculture.

Land use is administered by local authorities and the federal government plans to align policies across states to strengthen food security, while remaining attractive to industry, Chan said.

Urbanisation is adding to the pressure on agricultural production. The sector’s share of Malaysia’s economy and employment has steadily declined over the past two decades, World Bank data shows, sparking concerns about food security. Frequent global supply chain disruptions and climate change impacts have only heightened those worries.

KPL