Energy Use in Agriculture Sector: Input-Output Analysis

Abstract

Many sectors rely on energy as input to produce output. Even though the use of energy in agriculture sector is not as high as in other sectors, it is important to study the connectedness between the two sectors as there is no study done so far to show the linkages between them in Malaysia. Input-output analysis has been used to study the connectedness degree between the two sectors using input-output data for 1991-2000. The direct and total backward linkages analyses have shown that there is a significant increase in the use of energy in agriculture sector for the 1991-2000 period but the connectedness is still weak. Among the three energy-related sectors namely; crude oil, natural gas & coal, petrol & coal industries and electricity & gas, it was found that the agriculture sector depends more on inputs from petrol & coal industries as compared to the other two sectors. Based on these results, some policy implications have been proposed to help the decision-makers in economic planning especially on implementing policies related to energy and agriculture sectors.