KUALA LUMPUR, April 10 — The country’s rice industry remains severely deficient despite having received billions worth of federal subsidies, incentives and other forms of assistance, said a new study on food security by Khazanah Research Institute (KRI) released today.
The think tank in its ‘Status of Paddy and Rice Industry’ report found the rice trade is beset with structural weaknesses, even if production has increased over the last 30 years to allow Malaysia to meet its safe self-sufficiency target (SSL) of 60 to 70 per cent.
If left unaddressed, KRI said any supply shock risk hurting the most vulnerable groups such as the poor, rural residents or migrant workers, the most dependent on rice as a food source.
“Households in the below 40 per cent group, rural areas and non-citizens spend a higher proportion of their monthly F&B expenditure on rice, compared to their respective counterparts,” it said in a fact sheet.
“For some consumers such as undocumented workers, their consumption is invisible and are therefore easily left behind making these communities more vulnerable.”
The study identified four key weaknesses that needed urgent remedies.
At the policy level, it found the government’s definition of food security too narrow and heavily-production driven with rice SSL used as a proxy for food security.
KRI said this definition only covers availability and exclude nutritional importance of other food, which pushes farmers to focus only on meeting production targets, neglect quality and resort to unsustainable methods like the overuse of dangerous but cheap pesticides.
Dr Sarena Che Omar, lead author of the report, said the government must expand and incorporate food quality factors in a broader definition of food security.
“We need to emphasise on nutritional values... it’s important because we need to design the right policies,” she said during her presentation of the report here.
Malaysia ranks among nations with the highest obesity rate, according to the World Health Organisation in 2018.
Poor policies are also behind what KRI called a “midstream squeeze”, in which rice millers are forced to buy low quality grains at a premium and sold at a controlled price despite a steadily increasing production cost.
The think tank said protectionist policies aimed at safeguarding farmers and consumers neglect the difficulties faced by midstream players.
Dealt with a thin profit margin, the study said most millers either diversify or resort to “malpractices”, which deepens the distrust between them and farmers that KRI said worsened after the government standardised the RM1,200 Guaranteed Minimum Price per tonne nationwide.
There are also numerous cases where millers were forced to close shop.
“This is what we call a midstream squeeze: they are forced to buy low quality grains from farmers and then they have to sell it at a controlled price,” Serena said, adding that millers need urgent federal support.
“In Kelantan, only one miller is still operating while the rest couldn’t operate anymore.”
Malaysia is predicted to remain a net rice importer for the next 20 years despite decades of production-oriented policies, KRI noted.
Some economists have called on the government to return its focus on agriculture for food security reasons.
Consumption goods imports totalled RM2 billion last year, down from RM6.5 billion the year before with food and beverages posting a RM440 million drop or 44 per cent year-on-year, official data showed.
