6. CUT FLOWER PRODUCTION IN MALAYSIA - Lim Heng Jong, Mohd. Ridzuan Mohd. Saad, and Nor Auni Hamir[6]

1. Introduction

The cut flower industry in Malaysia is a relatively recent development compared to other agricultural enterprises. From its rather humble origins as a hobby industry, the cut flower industry in Malaysia has developed into a very viable commercial enterprise with the most marked growth in the mid-Eighties. In fact it has shown such tremendous growth in the last decade that production has increased tenfold and export twelve-fold in response to local and foreign demands. The trend is expected to continue in the future with growing affluence of the local population and that of the developed countries as well as improved market opportunities. The cut flower market consists of 3 important components viz. temperate flowers, orchids and other lowland flowers. In general, the area of cultivation of cut flowers in Malaysia is determined by the climate and topography of the land. For instance, highlands such as the Cameron Highlands are the major growing areas of temperate flowers. Other cut flowers adapt better to the hot humid conditions in the lowlands with orchids constituting the major share of the production.

In the National Agriculture Policy (1992-2010) and the Seventh Malaysia Plan (1996-2000), cut flowers have been identified as a priority group of crops with good potential to meet the growing domestic and international demand and to generate higher income for producers. The main thrusts of the policy are reflected in the following areas:

• Substantial expansion of flower production of both the lowland and highland varieties to meet the demand of an expanding market, in particular world demand.
• Cultivation of lowland varieties on marginal as well as former mining areas.
• Efficient and reliable supply of planting materials.
• Intensification of R & D in the development of better varieties, cost effective production technology and post harvest handling.
• Diversification of exports beyond the traditional markets.
• Encouragement of foreign investment to bring in more advanced technology and provide access to international markets.

It has been estimated that at least 1,000 farmers are involved in the floriculture industry that contributed RM 370 million to the economy in 1995. Orchids contributed 40 percent of total value of production, followed by temperate cut flowers (33 percent) and ornamental plants (27 percent).

Although the contribution of cut flowers to the total of Malaysian exports is not significant, the annual growth rate over the last year was 24%. If the forecast of 10% annual growth rate of floriculture production holds true for the 7th Malaysia Plan period (1996-2000), the floriculture industry will enjoy the highest annual growth rate compared to other major commodities including rubber and palm oil over the same period.

2. Present Status of Cut Flower Production

2.1 Major Production Areas

The major production areas for temperate cut flowers are in the Cameron Highlands, Pahang State (638 ha), Gua Musang, Kelantan State (10.3 ha), and Ranau, Sabah (85.1 ha). In the lowlands the main orchid cut flower production areas are located in Johore Bahru, Johore State (162.5 ha), Batang Padang, Perak State (52.4 ha), Kota Tinggi, Johore State (32.89) and Petaling, Selangor State (27.36 ha). Smaller quantities of orchids and other lowland cut flowers are also produced in the states of Melaka, Negeri Sembilan, Kelantan, Perlis and Sarawak.

2.2 Area Under Cultivation and Flower Types/Varieties

The total area under cut flowers is estimated to be over 1,218 hectares, out of which 580 hectares are under orchids and 638 hectares are under temperate cut flowers. The major types of cut flowers and popular varieties of each species grown commercially are as shown in Tables 1 and 2. In terms of number of flower stalks, temperate flowers contribute 71.46% towards the total cut flower production while the remaining 28.54% is from orchids.

The most popular orchid types cultivated are Dendrobium (11.17%), Aranda (8.0%), Oncidium (5.01%) and Mokara (3.5%). Together these 4 orchid genera produced 97% of the country’s orchid cut flowers in 1994. The most important temperate flower types are rose (33.48%), chrysanthemum (22.62%) and carnation (9.02%). These three flower types contributed 91.1% of total temperate cut flower production.

2.3 Open Field and Protected Production Systems

The type of production system used for different species of cut flowers in Malaysia is dependent on weather conditions, cultural requirements and quality maintenance, as described below:

Temperate Flowers

The climate of the Cameron Highlands, where the mean day and night temperatures are 14°C and 22°C, respectively, is very conducive to the cultivation of a wide range of temperate cut flower species. However, the total annual rainfall of 2700 mm that falls mainly in April-May and October-December affects growth and vigour of the plants, increases disease incidence and pest infestation, reduces yield and quality and causes erosion of top soils. Thus, almost all temperate cut flowers such as rose, carnation, chrysanthemum, peacock and lilium are grown under simple plastic shelters. These are simple open structures with height of 3 m and each consists of a wooden or galvanised iron frame with a polyethylene roof to protect the cut flowers from rain. Anthuriums, on the other hand are planted in shadenet houses with shading level of 75-80%. Irrigation is generally provided by overhead sprinkler daily during the first month of growth and gradually reduced during later phases. Surface and drip irrigation is used when the flower starts to open. Processed organic fertilizers, compound fertilizers and foliar fertilizers are used at different stage of growth. Chrysanthemum is different from the other flower types because there is a need for disbudding, application of plant growth regulator (to regulate height, strengthen stems and for quality blooms) and the use of artificial lighting and light interruption for vegetative development and floral initiation, respectively.

Table 1. Main Orchid Cut Flower Types and Varieties and Percentage Composition of Total Cut Flower Production (1994).

Main Flower Types	Main Varieties	% of Total Cut Flowers Produced
Orchids
1. Dendrobium	D. Sonia, D. Tomie Pink,	11.17
	D. Shavin White, D. Chanel,
	D. Sharifah Fatimah, D. Tuang Pink
2. Aranda	A. Wan Chark Kuan,	8.00
	A. Noorah Blue, Aranda Kooi Choo,
	A. Happy Beauty, A. Anne Black
3. Oncidium	O. Golden Shower,	5.01
	O. Gower Ramsay, O. Taka
4. Mokara	M. Chark Kuan (Pink, Orange, Red),	3.50
	M. Dinah Shore, M. Khaw Phaik Suan
5. Arachnis	A. Maggie Ooi	0.56
6. Aranthera	A. Anne Black, A. James Storei	0.13
7. Vanda	MAS Los Angeles	0.09
8. Holttumara	H. Loke Tuck Yip, H. Chee Kiong	0.06
9. Phalaenopsis	P. Sun Prince Pink,	0.01
	P. Hawaiian Clouds x P. Carmela Pink
10. Kagawara	K. Christine Low	0.01
11. Cymbidium		0.00
Subtotal for Orchids		28.54

Table 2. Main Temperate Cut Flower Types and Varieties and Percentage Composition of Total Cut Flower Production (1994).

Main Flower Types	Main Varieties	% of Total Cut Flowers Produced
1. Rosa	Hybrid teas - Samantha, Etna, Sonia, Kiss, Dukat, Amber Green, Cocktail 80, Golden Times, Madelon	33.48
2. Chrysanthemum	Reagan Yellow, Reagan Dark Spendid, Jaguar Red, Vyron, White Spider, Fiji Pink, Cleopatra Royal, Yellow Standard, Red Japanese Standard, Rivalry, Ice Follies White	22.62
3. Carnation	Standards - Master, Killer, Oriana, Indios, Liberty, Nicol, Samor Spray - Elsy, Etna, Cherry Fantasia, Cartauche, Iceland	9.02
4. Aster (Peacock flower)	Monte Cassino, Suzanne, Pointed Lady, Solidago, Suntop	2.36
5. Gerbera	Melody, Beauty, Sundance, Mickey	1.77
6. Limonium	Misty Blue, Misty White	0.63
7. Anthurium	Nitta Orange, Anneke Pink, Avanti	0.60
8. Lilium	Cassablanca, Star Gaze, Dreamland, Harmony, Snow Queen, Olympic Star	0.44
9. Heliconia	Spaciata Purple, Spaciata White	0.30
10. Liatris		0.08
11. Solidago		0.05
12. Gladiolus		0.05
13. Strelitzia	Bird of Paradise	0.02
14. Gypsophila		0.02
15. Alstromeria		0.01
16. Dahlia		0.00
17. Helichrysum		0.00
Subtotal for Non Orchids		71.46
Subtotal for Orchids		28.54
Grand Total for Cut Flowers		100.00

Source: Basic information on Cut Flower Industry, Malaysia, 1995. Department of Agriculture, Peninsular Malaysia

Orchids

The three major orchid types of Malaysia are grown under different production systems. The more popular sympodial orchids such as Dendrobium and Oncidium are grown under shadenet with shading level varying between 25-50% depending on the species. For the production of quality white dendrobium blooms that are free of specks and other blemishes, these varieties are sometimes grown in plant houses with roofs of polyethylene or transparent artex. For those Dendrobium species that are grown in shadenet houses without polyethylene roof, excessive rains are known to cause bud drops and flower specks in light-coloured varieties.

Most sun-loving monopodial orchids such as vandaceous types are grown in open fields while some Mokara and Aranda hybrids are also cultivated in shadenet houses with 25% shading.

2.4 Advances in Production Technology

Varietal Improvement

Three programmes for varietal improvement of orchids are currently being carried out, namely conventional breeding, genetic engineering and mutation breeding. The germplasm collection has increased to 500 species representing 100 genera. Another 196 accessions are being maintained as “studs” for hybridization work. Conventional breeding has resulted in the release of at least 7 hybrids consisting of 4 Dendrobiums, 1 Vanda, 1 Cattleya and 1 Kagawara.

Research in genetic engineering has just been initiated to induce colour change in established varieties, for instance changing yellow Oncidium (O. Golden Shower and O. Gower Ramsay) to white. Meanwhile studies on in vitro mutagenesis include the use of mutagens and gamma ray irradiations on Aranda, Mokara, and Vanda orchids. Induced mutation research on Dendrobium has indicated variations in pigmentation and flower size in response to irradiation.

For temperate cut flowers, varietal evaluation trials have identified promising varieties of chrysanthemum, rose, carnation, lilium, anthurium and gerbera for highland cultivation. Induced mutation studies on 3 chrysanthemum varieties have also indicated that the recommended optimum dose for the mutagenesis of these varieties is 30 Gray.

Cultural Practices

In orchids, the application of fertilizers at night and in the morning helps to increase inflorescence yield. Oil palm bunch compost when mixed in charcoal medium improved seedling growth by three times in Oncidium, twice in Dendrobium and one and a half times in Aranda seedlings.

The quality of chrysanthemum cut flower can be improved significantly through the application of calcium up to 150 mg/1. Cyclic light interruption as opposed to continuous night light interruption reduces energy cost and thus lowers the cost of chrysanthemum cut flower production.

Disease Control

In orchids, necrotic specks in Dendrobium blooms are common in plants grown under plastic shade. The spraying of 1 g/1 Ronilan every 10 days can effect complete control of this problem. The black nose disease of orchids has been confirmed to be caused by the association of Fusarium monoliforme with thrips. This disease can be controlled by alternate sprayings of Mesurol and Dithane M 45. Chemical control measures have also been developed for Sclerotium rot and pseudobulb rot, Cercospora leaf spots and alga.

The white rust problem on chrysanthemum that has restricted its import by countries such as Australia and Japan has been overcome with rust resistant varieties such as Tigerrane, Tiger, Target, Naru and Puma Yellow. Effective chemical control is also obtained with fungicides such as bromuconazole, bitertanol, flutolanil, myclobutanil, tridemenol and propiconazole. Powdery mildew in roses can also be controlled by chemicals such as sulphur and cupric oxide.

Pest Management

Leaf miners are a major pest problem of cut flowers in the Cameron Highlands. Studies on biological control have indicted that two eulophid parasitoid species (Hemiptarsenus varicornis and Chrysocharis sp.) parasitize both species of leaf miners (Liriomyza sp. and Chromatomyia horticola) found in a wide range of cut flowers. Meanwhile neem extracts have been found to be effective against leaf miner in potted chrysanthemum.

Studies have identified the most serious nematode pests as Eadopholus simillis on chrysanthemum and Pratylenchus coffeae on chrysanthemum and anthurium. These pests can be controlled by the application of nematicide such as fenamiphos, carbofuran, dazonmet and isazophos and adoption of preventive phytosanitary measures. Effective chemical control measures have also been developed for the beetle Oulema pectrolis and snail.

Post Harvest Handling

Studies indicated that the telescopic box type is suitable for packing temperate cut flowers while treatment of rose and carnation flowers at the right stage with certain flower preservatives has reduced bent-neck problem and extended its shelf-life. In addition, preservation techniques have been developed for rose, carnation, peacock, golden rod, anthurium, statice and cosmos for use as dried and pressed flowers. Although orchids are less perishable than temperate cut flowers, storage temperature does affect its quality. Dendrobiums can be stored at temperatures between 10-15°C without any sign of scorching.

All mites and thrips on roses, carnations, chrysanthemums and orchids are killed by methyl bromide fumigation without affecting the shelf life of the flowers. Evaluation of several chemicals as fumigants has yet to come out with an effective alternative to methyl bromide.

3. Production of Planting Material

A survey of the cut flower industry conducted in 1995 indicated that 107 orchid growers produced their own planting materials, 241 producers obtained their planting materials from local nurseries while 122 growers imported theirs from other countries. The corresponding figures for non-orchid cut flowers are 107 (own production), 294 (local) and 134 (import). Based on the application of import permits, import of planting materials during the first 6 months of 1996 consisted of 3.43 million cuttings/plants, 1.01 million bulbs/corms, 156 kg of flower seeds, 51,595 flask of tissue cultured orchid materials, 4,000 community pots of orchids, and 330,450 orchid seedlings.

Although many temperate cut flower growers produce planting materials, a large number purchase these from local nurseries or importers. In the case of chrysanthemum, the most widely grown temperate flower, two companies namely Van Der Kemp and Fides, produce most of the rooted and unrooted cuttings. Van Der Kemp has a 15-acre nursery that produces cuttings in imported Dutch greenhouses under drip and mist irrigation systems. Fides operates a smaller 10-acre nursery with cuttings produced under plastic rain shelters that are equipped with similar irrigation facilities. These two nurseries together produce an estimated 50 million chrysanthemum cuttings. About 80% of these materials are supplied to growers in the Cameron Highlands, while the rest is exported to nearby ASEAN countries. It is estimated that a total of 300 million chrysanthemum cuttings is required by growers in the Cameron Highlands and both these companies can only produce between 10-13% of the local needs.

There are more than a dozen commercial tissue culture units producing orchid materials. These are mostly small operations producing either meristem culture or seed culture. Some major orchid growers also contract out the production of planting materials of orchid hybrids to large tissue culture laboratories in Thailand and Singapore.

4. Marketing

Marketing of cut flowers in Malaysia is less organized than that in Western countries with different degrees of sophistication depending on flower varieties traded, farm size and destinations of the produce. The various marketing channels through which cut flowers are exported are shown in Fig. 1.

The multi-tiered marketing and distribution system is rather complicated and according to growers does not pay premiums for good quality. Malaysia is studying the possibility of establishing an auction market. However, growers still play an important and direct role in the distribution to retailers in the local market as well as to importers in the foreign market. The grower can either deliver directly (large farms) or through an export agent (small farms) to the importer. The flowers are then sold directly to wholesalers or in auction markets (foreign countries) before distribution to the retail markets and from there to the consumers.

There are several associations of cut flower producers but these are formed to provide service and supplies to members only. The more significant ones are the Cameron Highlands Floriculturist Association and the Commercial Orchid Growers’ Association of Malaysia. Although these associations do not collectively market their produce there is growing realization of the benefits of such marketing arrangement. Several temperate flower producers have already grouped together to form a trading company to deal directly with importers in foreign countries. Some companies also specialize only in export and buy directly from growers who have production contract with them.

Figure 1. Marketing Channels for Flowers in Malaysia

The exports of floricultural products increased from RM 6.5 million in 1985 to RM 54 million in 1994 showing an eight-fold increase over a ten-year period (Table 3). However, conservative official records show a decline in the export value of cut flowers from a high of RM 40.63 million in 1992 to a low of RM 18.31 million in 1995, although there was an increase in cultivated production area. This two conflicting trends appear misleading but may be explained by the low market prices that plague the industry in 1995, under declaration of import volume and value, movement to lower-price markets and increased domestic consumption. The main export markets are Japan, Singapore and Hongkong. Japan is the leading export market for orchids, Singapore for ornamentals and Hongkong for temperate flowers.

Import of cut flowers has shown a fourfold increase from RM 0.73 million in 1992 to RM 2.77 million in first eleven months of 1995 (Table 4). The main countries exporting cut flowers to Malaysia are the Netherlands, Singapore and Thailand.

5. Potential for Cut Flower Production Development

The prospects for the cut flower industry in Malaysia are very bright due to the growth in domestic and export markets. The domestic per capita consumption has increased from RM 0.71 in 1990 to its current level of RM 2.50. This trend is expected to increase further with greater consumer affluence and growing appreciation for fresh cut flowers. Other factors that contributed to this forecast is the rapid economic growth and the fast rate of urbanization in the country.

There is also an increasing demand for cut flowers in the international market that is expected to continue at a growth rate of 6% per annum. This will result in a corresponding increase in value that is expected to reach RM 20 billion and RM 36 billion in the years 2000 and 2010, respectively.

There is tremendous scope for expansion of the export potential of Malaysian cut flowers, as major consuming countries are facing rising production cost and will increasingly depend on lower-cost producers to supply their requirements. Malaysia has several advantages including a wider product range, longer shelf-life for Malaysian orchids, potential to exploit its biodiversity for product development and ability to export flowers year round.

New markets especially for Malaysian orchids are emerging in the Middle East, Northern Europe and East Asia. Existing markets such as Belgium, Finland and Ireland are expected to expand further.

6. Constraints in Cut Flower Production Development

Although the cut flower industry in Malaysia has shown impressive growth in the last decade, it has not been able to realize its full potential because of several constraints. Among the more important ones are the following:

Table 3. Exports of Cut Flowers According to types from 1992-1996 (RM ‘000)

Type/Year	1992	1993	1994	1995	1996*
Orchids	6,259.60	4,268.40	9,034.49	6,828.24	6,069.18
Temperate Flowers	33,305.84	20,450.93	23,283.37	9,632.21	9,140.85
Other Cut Flowers & Flower Buds, Other than Fresh	1,063.82	753.08	1,394.76	1,853.90	1,239.78
Total Export	40,629.26	25,472.41	33,712.62	18,314.35	16,449.81

Source: Statistics Department, Malaysia

* Data based on Jan-Nov. 1996

Type/Year	1992	1993	1994	1995	1996*
Orchids	114.17	14.28	39.03	74.88	977.10
Temperate Flowers	287.46	171.69	434.87	433.27	701.20
Other Cut Flowers & Flower Buds, Other than Fresh	326.03	392.55	461.15	747.47	1,093.30
Total Import	727.66	578.52	935.05	1,255.62	2,771.60

Source: Statistics Department, Malaysia

* Data based on Jan-Nov. 1996

The intense competition for land resources with more lucrative economic activities, high development cost, short land tenure and environmental considerations (highland production) impede the expansion of the cut flower industry both in the highlands and lowlands. This is further compounded by the high initial investment for planting materials, irrigation systems, shade and other infrastructure facilities. Financial institutions are also unwilling to provide credit for floriculture projects due to perceived high risks.

Technology

The development of new varieties has not been able to keep pace with changing consumer preferences. Moreover, inconsistency in the supply of uniform and high quality planting materials and the slow rate of technological advancement in critical areas such as post harvest handling, storage and transportation have resulted in export of lower quality produce with shorter shelf-life.

Infrastructure Support

Existing marketing practices do not ensure premium prices for good quality. Prices are also not normally fixed at the point of sale in the open account payment system. This often results in non payment, high arbitrary discounts and commissions especially by buyers from Singapore and Hongkong.

Insufficient facilities for refrigerated transportation and storage have led to high post harvest losses and export of poor quality produce. Exports are also confined to traditional markets due to insufficient air cargo space and handling facilities at airports.

Institutional Issues

The high tariff barriers imposed by Taiwan, Thailand and Europe and the strict phytosanitary requirements enforced in Japan, the United States of America, Australia and New Zealand, are other impediments to further development of the industry. These problems are further compounded by the lack of a standard domestic grading and inspection system.

Human Resources

There is a general lack of skilled human resources in important areas such as production, post harvest handling, product handling, product development, biotechnology and auctioning. This can become a serious handicap in the highly competitive cut flower industry, where innovation and responsiveness to changes can give local growers the edge over their rivals.

7. Conclusions

The prospect for cut flowers is very bright taking into consideration the growing demand in the domestic and export markets and the fact that flowers are relatively recession-proof. The Malaysian Government has recognised this fact and has accorded priority to floriculture in the National Agriculture Policy, providing various tax and financial incentives to attract investments. Malaysia should make full use of its inherent advantages and attempt to rise above current constraints and provide an adequate and consistent supply of quality cut flowers during periods of maximum demand. Current production and marketing activities including development of desired varieties, and the search for new markets should be upgraded with the full cooperation of all parties concerned. These efforts and other future development plans are expected to enable Malaysia to make the quantum leap and become one of the leading producers of tropical cut flowers in the world. A successful development plan will have to pay particular attention to the following areas:

- Expansion of domestic production through the efficient utilisation of domestic resources to exploit the opportunities that exist.

- Strengthening market and market capabilities through better cooperation between private sector and Government agencies in order to expand existing markets and penetrate new ones.

- Strengthening the institutional support and support services for continuous innovation and development of capital-intensive production technologies to improve product quality and to meet changing consumer demand.

- Exploitation and enhancement of processing and downstream capabilities.