universiti putra malaysia fep 2007 4
TRANSCRIPT
UNIVERSITI PUTRA MALAYSIA
SIMULATIVE IMPACT OF ENVIRONMENT-FRIENDLY PRODUCTION METHOD OF SARAWAK PEPPER ON DOMESTIC AND
EXPORT SUPPLY
WONG SWEE KIONG
FEP 2007 4
i
SIMULATIVE IMPACT OF ENVIRONMENT-FRIENDLY PRODUCTION
METHOD OF SARAWAK PEPPER ON DOMESTIC AND
EXPORT SUPPLY
By
WONG SWEE KIONG
Thesis Submitted to the School of Graduate Studies, Universiti Putra Malaysia,
in Fulfilment of the Requirement for the Degree of Doctor of Philosophy
February 2007
ii
Dedicated To:
My Caring, Understanding and Beloved Dad and Mum,
My Dearest sisters, Swee Min, Swee Hui and Swee Ching,
My Dearest and Only Brother, Selamat Wong,
My Brothers-in-Law, Kwong Lee and Simon, and
My Loving and Cute nephews, Timothy and Matthew.
iii
Abstract of thesis presented to the Senate of Universiti Putra Malaysia in fulfilment
of the requirement for the degree of Doctor of Philosophy
SIMULATIVE IMPACT OF ENVIRONMENT-FRIENDLY PRODUCTION
METHOD OF SARAWAK PEPPER ON DOMESTIC AND
EXPORT SUPPLY
By
WONG SWEE KIONG
February 2007
Chairman: Professor Khalid Abdul Rahim, PhD
Faculty: Economics and Management
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.
iv
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.
v
Abstrak tesis yang dikemukakan kepada Senat Universiti Putra Malaysia sebagai
memenuhi keperluan untuk ijazah Doktor Falsafah
IMPAK SIMULASI BAGI CARA PENGELUARAN LADA SARAWAK
YANG MESRA-ALAM KE ATAS PENAWARAN DOMESTIK
DAN EKSPORT
Oleh
WONG SWEE KIONG
Februari 2007
Pengerusi: Profesor Khalid Abdul Rahim, PhD
Fakulti: Ekonomi dan Pengurusan
Keperluan untuk menjaga alam sekitar dan menggunakan sumber-sumber asli
dengan cara yang lebih mapan (lestari) kini menjadi semakin penting di dunia.
Firma-firma bagi mana-mana industri yang tidak mengikut perkembangan berterusan
dalam ekonomi dunia semasa seterusnya akan ketinggalan daripada rejim pasaran
antarabangsa semasa yang semakin kompetitif.
Malaysia adalah sebuah ekonomi terbuka yang banyak bergantung kepada
perdagangan antarabangsa untuk pembangunan ekonomi negara. Lada (Piper
Nigrum L.), Raja rempah ratus, ditanam di Malaysia kebanyakannya (lebih kurang
90%) adalah untuk pasaran eksport. Bagi mengekalkan agihan pasaran yang penting
untuk eksport lada, adalah wajib untuk Malaysia meningkatkan kepersaingan
industri ladanya. Jadi, objektif kajian ini adalah untuk mengkaji dan menilai kesan
ekonomi bagi kos teknik pengeluaran lada yang mapan (lestari) atau mesra-alam ke
atas kuantiti pengeluaran dan eksport lada di Malaysia.
vi
Salah satu penemuan utama bagi kajian ini ialah kos kimia bagi pengeluaran lada
didapati mempunyai kesan negatif yang penting dalam mempengaruhi penawaran
tempatan kedua-dua lada hitam dan lada putih di Malaysia. Dengan itu, untuk tidak
menggalakkan pekebun menggunakan input-input kimia secara tidak berhemah atau
tidak cermat, peningkatan kos kimia adalah dicadangkan sebagai satu pilihan polisi.
Analisis simulasi menunjukkan undang-undang alam sekitar untuk menaikkan kos
kimia akan meningkatkan kepersaingan pasaran eksport untuk kedua-dua lada hitam
dan lada putih di Malaysia. Sebenarnya, akibat daripada dorongan harga istimewa
yang diperolehi bagi lada yang mesra-alam yang lebih baik kualitinya, petani mula
menambahkan pengeluaran dan sebab itulah kuantiti pengeluaran dan eksport akan
meningkat. Tambahan pula, analisis kebajikan juga menunjukkan bahawa kebajikan
bagi pekebun-pekebun lada akan meningkat dengan mengamalkan cara-cara
pengeluaran mapan lada berkos rendah.
Kesimpulannya, mempromosikan pengeluaran lada cara mesra-alam di Malaysia
patut diberi keutamaan. Ini adalah penting supaya Lada Sarawak masih dapat
dipasarkan di pasaran antarabangsa yang semakin kompetitif. Lagipun, dengan
meningkatkan kepersaingan industri lada Malaysia melalui amalan-amalan
pengeluaran lada yang mesra-alam juga akan membantu pekebun-pekebun lada kita
memenuhi keperluan yang lebih tegas mengenai keselamatan makanan, alam sekitar
dan kemanusiaan asas yang ditetapkan di arena antarabangsa. Ini akhirnya akan
membantu untuk meningkatkan kebajikan pekebun-pekebun lada Malaysia. Ini
terutamanya penting supaya industri lada akan terus memainkan peranan yang
penting sebagai sumber pendapatan utama bagi pertukaran wang asing negara di
vii
samping sebagai satu sumber pekerjaan penting untuk lebih kurang 74,710 isi rumah
di negeri Sarawak.
viii
ACKNOWLEDGEMENTS
Praise to the Lord, our Mighty God as He has been guiding me all the way through to
complete my PhD studies in Universiti Putra Malaysia (UPM). Though the journey
to earn a PhD degree is long and not easy, He has never forsaken me from
conception to completion. May all the glory be to Him!
Along the PhD research journey, I would not have succeeded without the guidance
and assistance of a group of very dedicated, caring and excellent supervisors. First
and foremost, I would like to extend my utmost gratitude to my main supervisor,
Professor Dr. Khalid Abdul Rahim. His continuous support, generosity and
willingness to share with me his precious time and astounding knowledge, ideas,
comments and even patience are highly appreciated. Besides that, Professor Dr. Mad
Nasir Shamsudin, my co-supervisor with a very sharp analytical skill, is indeed very
brilliant and intelligent. Despite being very busy as the Dean of the Faculty of
Environmental Studies in UPM, he was ever ready to spare his valuable time to
assist me to improve and to accomplish my PhD thesis. In addition, Associate
Professor Dr. K. Kuperan Viswanathan, though is far away from UPM who has a
very tight schedule working with the World Fish Centre, his willingness to serve as a
member in my supervisory committee is indeed highly appreciated. Dr Kuperan is
never stingy in giving me his continuous support, encouragement, advice, and in
sharing with me his great knowledge and experience while working at the
international scientific research organization. All of my supervisors have indeed
contributed enormously in motivating me in one way or another to excel in my
studies.
ix
On the other hand, I am indeed very lucky to be in UPM to pursue my PhD studies
as I am surrounded by a pool of outstanding senior professors and lecturers who are
always generous in providing me with constructive advice and guidance. The credit
of my success in getting my PhD degree should concurrently go to my beloved
professors and lecturers particularly in the Faculty of Economics and Management,
UPM. Your relentless spirit in teaching and educating me, encouraging and inspiring
me to think and solve problems has given me a good foundation to move forward in
research and teaching. You are all very wonderful. I would like to convey my sincere
appreciation to you all.
Besides that, I would also like to express my gratitude to all of the officers and
librarians at the Pepper Marketing Board, Sarawak both from the headquarters as
well as at the branch offices, Department of Agriculture Sarawak, Agriculture
Research Centre in Semonggok, Sarawak, Department of Environment, Sarawak
Branch, Department of Statistics Malaysia, Natural Resources and Environment
Board (NREB), Sarawak, Universiti Putra Malaysia, Universiti Malaya and
Universiti Kebangsaan Malaysia for willingly and generously providing me with all
the necessary means, information, references and data. In addition, sincere thanks are
also extended to all respondents who have shown great co-operation to participate in
the interviews to provide me with the useful information necessary in this research.
Without your help, I would not be able to accomplish my PhD thesis.
Many thanks should also go to a vast number of my friends, church members and my
dear pastors who have played a vital role particularly for your never-ending
encouragement and prayer support throughout the course of my PhD thesis
x
preparation till completion. Your support in some ways has enlightened me and thus
is warmly acknowledged here!
Taking this opportunity, I would also like to express my special thanks to the
examination committee chaired by Professor Dr. Mohd Shahwahid Haji Othman and
comprising of Professor Dr. Zakariah Abdul Rashid, Associate Professor Dr Tai
Shzee Yew and Professor Dato’ Dr. Jamalludin Sulaiman for your constructive
criticism and recommendation to improve my final thesis product. Your precious
time devoted in reading my thesis and giving invaluable ideas, comments as well as
guidance, support and encouragement are greatly acknowledged.
I must also thank my dean, Associate Professor Dr. Abd. Mutalip Abdullah and the
faculty members in the Faculty of Social Sciences, Universiti Malaysia Sarawak
(UNIMAS) for your valuable support and the wisdom you imparted to me.
Last but not least, my family members are the most crucial persons in giving me all
the necessary resources either financially or the prayer and moral support to enable
me to accomplish this significant milestone in my life. Thank you so much for your
love and everything that you have done for me particularly in transporting me to and
back from the various departments and places to get the data/information/references
that I needed for my research studies. You are all too great for me. Thank you very
much everyone and may God continue to shower you with abundant blessings!
xi
I certify that an Examination Committee has met on 26 February 2007 to conduct the
final examination of Wong Swee Kiong on her Doctor of Philosophy thesis entitled
“Simulative Impact of Environment-Friendly Production Method of Sarawak Pepper
on Domestic and Export Supply” in accordance with Universiti Pertanian Malaysia
(Higher Degree) Act 1980 and Universiti Pertanian Malaysia (Higher Degree)
Regulations 1981. The Committee recommends that the candidate be awarded the
relevant degree. Members of the Examination Committee are as follows:
Mohd. Shahwahid Hj. Othman, PhD
Professor
Faculty of Economics and Management
Universiti Putra Malaysia
(Chairman)
Zakariah Abdul Rashid, PhD
Professor
Faculty of Economics and Management
Universiti Putra Malaysia
(Internal Examiner)
Tai Shzee Yew, PhD
Associate Professor
Faculty of Economics and Management
Universiti Putra Malaysia
(Internal Examiner)
Dato’ Jamalludin Sulaiman, PhD
Professor
School of Social Sciences
Universiti Sains Malaysia
(External Examiner)
________________________________
HASANAH MOHD GHAZALI, PhD
Professor/Deputy Dean
School of Graduate Studies
Universiti Putra Malaysia
Date: 22 MARCH 2007
xii
This thesis submitted to the Senate of Universiti Putra Malaysia and has been
accepted as fulfillment of the requirement for the degree of Doctor of Philosophy.
The members of the Supervisory Committee are as follows:
Khalid Abdul Rahim, PhD
Professor
Faculty of Economics and Management
Universiti Putra Malaysia
(Chairman)
Mad Nasir Shamsudin, PhD
Professor
Faculty of Environmental Studies
Universiti Putra Malaysia
(Member)
K. Kuperan Viswanathan, PhD
Associate Professor
World Fish Centre Global Headquarters
Bayan Lepas, Penang
(Member)
____________________________
AINI IDERIS, PhD
Professor/ Dean
School of Graduate Studies
Universiti Putra Malaysia
Date: 12 APRIL 2007
xiii
DECLARATION
I hereby declare that the thesis is based on my original work except for quotations
and citations which have been duly acknowledged. I also declare that it has not been
previously or concurrently submitted for any other degree at UPM or other
institutions.
__________________________
WONG SWEE KIONG
Date: 1 MARCH 2007
xiv
TABLE OF CONTENTS
Page
DEDICATION ii
ABSTRACT iii
ABSTRAK v
ACKNOWLEDGEMENTS viii
APPROVAL xi
DECLARATION xiii
LIST OF TABLES xviii
LIST OF FIGURES xx
LIST OF ABBREVIATIONS xxii
CHAPTER
1 INTRODUCTION 1
1.1 An Overview 1
1.2 Challenges Facing Pepper Industry in Malaysia 6
1.3 Problem Statement 10
1.4 Objectives of the Study 13
1.5 Significance of the Study 14
1.6 Definitions 22
1.6.1 Environmental-friendly Production 22
1.6.2 Competitiveness 24
1.7 Organization of the Study 25
2 BACKGROUND OF THE STUDY 26
2.1 Country Background 26
2.1.1 Country Overview 26
2.1.2 Overview of the Malaysian Economy 26
2.1.3 Agriculture Sector in Malaysia 32
2.1.4 Pepper Policy under Third National Agricultural
Policy 1998-2010 34
2.1.5 Malaysia’s Domestic and Trade Policies 36
2.1.6 Brief Introduction to Sarawak Economy 37
2.1.7 Environmental Consciousness in Malaysia 43
2.1.8 Related Institutions 45
2.1.8.1 Pepper Marketing Board Malaysia 45
2.1.8.2 Department of Agriculture, Sarawak 47
2.1.8.3 Department of Environment (DOE) Malaysia 50
2.1.8.4 Natural Resources and Environmental Board
(NREB) Sarawak 53
2.1.9 Some Scenarios on the Existing Pepper Industry in
Malaysia 55
2.1.9.1 Environmental, Health and Social Impacts of the
Existing Pepper Industry 55
xv
2.1.9.2 Environmental, Health and Sustainability Costs
of Existing Pepper Industry 59
2.2 Commodity Background 60
2.2.1 The History of Pepper 60
2.2.2 The Uses of Pepper 62
2.2.3 World Pepper Industry 63
2.2.3.1 International Pepper Community (IPC) 64
2.2.3.2 World Pepper Production and Export 65
2.2.3.3 World Pepper Demand and Consumption 70
2.2.3.4 World Pepper Prices 72
2.2.4 Sarawak Pepper 72
2.3 Environment Related Issues and Concepts 74
2.3.1 Trade Liberalization 74
2.3.2 Economic Growth and the Environment 76
2.3.3 Sustainable Development 78
2.3.4 Agriculture and Its Environmental and Social Impacts 79
2.3.5 Sustainable Agriculture 82
2.4 Research Imperative 85
3 LITERATURE REVIEW 91
3.1 An Overview 91
3.2 Sustainable Development, Trade Competitiveness and
Welfare Effects 91
3.2.1 Empirical Evidence on Environmental Policies and
Trade Competitiveness 97
3.2.2 Sources of International Competitiveness 99
3.3 Supply Response 102
3.4 Cointegration Test 105
3.5 Measuring Welfare Change 109
3.6 Triangulation 113
3.7 Related Empirical Studies on Pepper Industry in Malaysia 115
4 METHODOLOGY 117
4.1 Theoretical and Analytical Framework: A Brief Methodological
Overview 117
4.1.1 The Fundamental Partial Equilibrium Approach 122
4.1.2 Analysis Incorporating Efficiency Improvements 130
4.1.3 Quality Products and Export Premium Price Adjustment 132
4.1.4 Measuring Economic Surplus 134
4.2 Model Specification 138
4.2.1 Domestic Supply for Black Pepper and White Pepper 138
4.2.1.1 Domestic Supply of Pepper Production 142
4.2.1.2 Average Local Price of Black Pepper and White
Pepper 144
4.2.1.3 Government Allocation and Government
Expenditure 148
4.2.1.4 Area of Pepper Farms 150
4.2.1.5 Cost of Pepper Production 151
xvi
4.2.1.6 Local Price Differentials between Black Pepper
and White Pepper 153
4.2.1.7 Dummy Variables for the Uncontrolled Factors of
Disease and Weather (D2) 154
4.2.2 Export Supply of Black Pepper and White Pepper 155
4.2.2.1 Export Supply of Pepper 158
4.2.2.2 Average FOB Price of Black Pepper and White
Pepper 159
4.2.2.3 International Price Differentials between Black
Pepper and White Pepper 162
4.2.2.4 Stock of Pepper Stored 162
4.2.2.5 Dummy Variable 163
4.2.2.6 Trend Variable 164
4.3 Estimation Techniques and Methods 165
4.3.1 The Unit Root Test 165
4.3.2 Model Selection and CUSUM and CUSUMSQ Tests 169
4.3.3 Cointegration Test 172
4.3.4 Autoregressive Distributed Lag (ARDL) Method 173
4.4 Triangulation 183
4.5 Data Collection 184
5 RESULTS AND DISCUSSION 186
5.1 A Summary of the Description of the Variables Used 186
5.2 The Unit Root Test 189
5.3 Cointegration Test 191
5.3.1 Empirical Results for the Domestic Supply of Black
Pepper Production and the Domestic Supply of White
Pepper Production Models 191
5.3.2 Empirical Results for Export Supply of Black
Pepper and Export Supply of White Pepper Models 205
5.3.3 A Summary on the Empirical Results of Domestic Supply
and Export Supply of Pepper and their Policy
Implications 221
5.4 Simulation on the Effects of Adopting Environmental-Friendly
Pepper Production Method 237
5.5 Welfare Analysis 249
5.6 Field Survey 250
6 SUMMARY AND CONCLUSION 261
6.1 An Overview 261
6.2 A Summary 267
6.3 Policy Implications 272
6.4 A Concluding Remark 276
6.5 Limitations/Shortcomings of the Study 281
6.6 Recommendations for Future Studies 284
xviii
LIST OF TABLES
Table Page
2.1 Basic Economic Statistics of Malaysia, 1980, 1985, 1987-2004 29
2.2 Domestic Product Value for the Major Economic Sectors and
Their Percentage to Total GDP in Malaysia 30
2.3 Number of Employed Persons by Major Industries and Their
Percentage in Malaysia 31
2.4 Distribution of Employed Persons (and its Percentage) by
Industry in Sarawak 39
2.5 Principal Exports of Sarawak 1991-2004 40
2.6 Distribution of Sarawak Land Area by Major Crops (in Hectare
and its Percentage) 41
2.7 Export Value (in RM‘000) and Its Percentage of Major
Agricultural Products in Sarawak for 1991-2004 42
2.8 World Pepper Production (in metric ton) 68
2.9 World Pepper Export (in metric ton) 69
2.10 Percentage of Domestic Consumption of Pepper over Production
and Per Capita Consumption of Pepper 70
2.11 Calendar of Pepper Farm Operations in Sarawak 74
5.1 Data Set: Key Variables, Description and the Source 188
5.2 Augmented Dickey-Fuller (ADF) and Kwiatkowski-Phillips-
Schmidt-Shin (KPSS) Unit Root Test Results 190
5.3 Results of Long-Run Significance Tests for Domestic
Supply of Black Pepper Model 193
5.4 Long-Run Coefficient Estimates of the Domestic Supply of
Black Pepper 194
5.5 Error Correction Representation (Short-Run Estimates) for
Domestic Supply of Black Pepper 195
5.6 Results of Long-Run Significance Tests for Domestic
Supply of White Pepper Model 199
xix
5.7 Long-Run Coefficient Estimates of Domestic Supply of
White Pepper 199
5.8 Error Correction Representation (Short-Run Estimates) for
Domestic Supply of White Pepper 200
5.9 Results of Long-Run Significance Tests for Black
Pepper Export Supply Model 208
5.10 Long-Run Coefficient Estimates of Black Pepper Export Supply 208
5.11 Error Correction Representation (Short-Run Estimates) for
Black Pepper Export Supply 209
5.12 Results of Long-Run Significance Tests for White
Pepper Export Supply Model 215
5.13 Long-Run Coefficient Estimates of White Pepper Export
Supply 216
5.14 Error Correction Representation (Short-Run Estimates) for
White Pepper Export Supply 217
5.15 Long-Run and Short-Run Supply Elasticities of Domestic
Supply and Export Supply of Pepper in Malaysia 222
5.16 Simulation Results for Malaysian Black Pepper Case Study 241
5.17 Simulation Results for Malaysian White Pepper Case Study 242
xx
LIST OF FIGURES
Figure Page
4.1 Impacts of Environmental and Food Regulations on Export
Performance of Pepper in Malaysia 120
4.1a Impacts of Environmental and Food Regulations on Domestic
And Export Markets of Pepper in Malaysia 121
4.2 Consumer Surplus and Producer Surplus with Different
Supply Intercepts 137
4.3 Local Prices for Black Pepper and White Pepper (RM/tonne) 146
4.4 The Relative Local Price for Black Pepper 146
4.5 Government Allocation and Government Expenditure on
Pepper Projects and Pepper Subsidy Scheme 149
4.6 International Prices for Black Pepper and White Pepper
from 1980 to 2004 161
4.7 Relative International Price of Black Pepper 161
5.1 Plots of CUSUM and CUSUMSQ Statistics for Coefficient
Stability in the Domestic Supply of Black Pepper Model 196
5.2 Plots of CUSUM and CUSUMSQ Statistics for Coefficient
Stability in the Domestic Supply of White Pepper Model 203
5.3 Plots of CUSUM and CUSUMSQ Statistics for Coefficient
Stability in the Black Pepper Export Supply Model 210
5.4 Plots of CUSUM and CUSUMSQ Statistics for Coefficient
Stability in the White Pepper Export Supply Model 220
5.5 Farmer Respondents by Race 252
5.6 Farmer Respondents by Age Group 253
5.7 Farmer Respondents by Division 253
5.8 Farmer Respondents by Income Brackets 254
5.9 Farmer Respondents by Educational Levels 254
xxi
5.10 Percentage of Farmers Currently Producing Special Quality
Pepper 256
5.11 Farmers' Current Cultural Practices at their Pepper Farms 256
5.12 Farmers' Perception on the Effects of the Use of Chemical
Inputs 257
5.13 Farmers' Options if Given Chance to Use Chemical Inputs 258
5.14 Farmers' Response towards Government Policies 258
xxii
LIST OF ABBREVIATIONS
ADF Augmented Dickey-Fuller
AFTA ASEAN Free Trade Area
AIC Akaike Information Criteria
ARC Agriculture Research Centre
ARCH Autoregressive conditional heteroscedasticity
ARDL Autoregressive Distributed Lag
ASEAN The Association of South-East Asian Nations
BOD Biochemical oxygen demand
CEPT Common Effective Preferential Tariff
CO Carbon Monoxide
CS Consumer surplus
CV Compensating variation
DOA Department of Agriculture
DOAS Department of Agriculture Sarawak
DOE Department of Environment
DOS Department of Statistics
DSM Department of Standards, Malaysia
ECM Error Correction Model
ECT Error Correction Term
EKC Environmental Kuznets Curve
EV Equivalent variation
FAO Food and Agriculture Organization of the United Nations
FAQ Fair Average Quality
xxiii
GATT The General Agreement on Tariffs and Trade
GDP Gross Domestic Product
GMP Good Manufacturing Practices
HACCP Hazard Analysis & Critical Control Point
IEC International Electotechnical Commission
IOSTA International Organization of Spice Trade Association
IPC International Pepper Community
IPPC Integrated Pollution Prevention and Control Bureau
ISO International Standards Organization
KPSS Kwiatkowski-Phillips-Schmidt-Shin
LM Lagrange Multiplier
LNG Liquefied natural gas
MARDI Malaysia Agricultural Research and Development Institute
MITI Ministry of International Trade and Industry
MR Malaysian Ringgit
NAP National Agricultural Policies
NAP3 The Third National Agricultural Policy
NREB Natural Resources and Environment Board
OECD Organization for Economic Co-operation and Development
OLS Ordinary least Squares
PMB Pepper Marketing Board
PPMs Process and Production Methods
PS Producer surplus
RM Ringgit Malaysia
xxiv
SALM Skim Akreditasi Ladang Malaysia
(Malaysian Farm Accreditation Scheme)
SAMM Skim Akreditasi Makmal Malaysia
(Laboratory Accreditation Scheme of Malaysia)
SBC Schwartz Bayesian Criteria
UECM Unrestricted Error Correction Model
UNCED United Nations Conference on Environment and Development
UNCTAD United Nations Conference on Trade and Development
UNEP United Nations Environment Programme
UN-ESCAP United Nations Economic and Social Commission for Asia and the
Pacific
US The United States
UVAR Unrestricted vector autoregressive
VAR Vector Autoregressive
WCED World Commission on Environment and Development
WHO World Health Organization
WSSD World Summit on Sustainable Development
WTO World Trade Organization