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Abstract
The purpose of this study is to evaluate the effects of changes in the external trade environment and domestic
economic policies on the agricultural development of Malaysia. The scope of this research also includes providing
further insights into the strengths and weaknesses of the computable general equilibrium (CGE) methodology for
agricultural policy analysis. The first analysis focuses on the export agriculture sector which encompasses Malaysia's
two primary agricultural commodities, rubber and palm oil. Heavily dependent on exports of rubber in the 1950s and
1960s, Malaysia has since built a more diversified economy with strong emphasis on manufacturing. Export
agriculture, however, is still an important component of the national economy. The second objective examines the
influence of domestic policy on agricultural development. The simulation results demonstrate the growing resiliency
of the Malaysian economy to external shocks. Also, they point to the domestic economy's ability to buffer internal
policy-induced distortions.