Give Bernas allocation directly to rice farmers, industry players say

While the move to distribute RM10 million this year to padi farmers has been welcomed by those in the sector, industry players say a comprehensive view is needed of the problems at hand, in order to ensure the effective improvement of their welfare. 

Nurfitri Amir Muhammad, coordinator of the Malaysian Food Security and Sovereignty Forum, said the allocation was in fact the long-delayed responsibility of Padiberas Nasional (Bernas), as the company still has social duties that have yet to be carried out, including the establishment of disaster funds, the supply of machinery and the development of a padi database in addition to ensuring funds for the supply of rice seed buffer stocks. 

"Nevertheless, the farmers have not yet been told how the funds will be channelled, whether in direct cash aid or through development programmes," he said. 

He was responding to the move by Prime Minister Anwar Ibrahim directing Bernas to pay RM10 million to farmers this year and RM50 million in the year to come. 

Bernas, known as Lembaga Padi dan Beras Negara before it was privatised in 1994, controls the local rice industry and foreign rice imports.

Its largest shareholder is corporate tycoon Syed Mokhtar Albukhary.

Tey Yeong Shen, a senior researcher at Universiti Putra Malaysia (UPM), said it was not yet clear how the RM10 million allocation would be used. 

"If it is to be returned to the farmers, output-based incentives will present a greater likelihood of attaining productivity growth than input subsidies," Tey, of UPM's Institute of Tropical Agriculture and Food Security, told MalaysiaNow. 

On the problems faced in the rice industry, he said that in terms of policy, proactive measures such as price controls and input subsidies contribute to unintended effects including stagnated yields, a drop in competition and innovation, and low added value in addition to stunted development for SMEs.

"Straight removal could be politically and socially infeasible," he said. 

"A soft landing or transitional approach would be better for materialising progressive measures, such as output-based incentives." 

Nurfitri meanwhile said that troubles in the rice industry could be seen from the aspects of market and production. 

Over time, he said, farmers had lost more and more of their bargaining power due to a dip in the number of rice mills. 

"Farmers looking to harvest their crops don't have a lot of choices when it comes to selling as there are only one or two mills in any given location," he said. 

"So they are forced to accept whatever price is offered as well as the net weight deduction imposed by the mills." 

He said farmers should also have the freedom to choose which seeds, fertiliser and cropping system to use, whether conventional or alternative. 

"Subsidies should be given directly to the farmers, not the suppliers," he said. 

"The agricultural input market must be opened up to allow for competition. Then the price and quality will be reasonable."