Is Malaysia ready for a rice crisis?

Questions have been raised about the government's readiness to manage the supply of rice, as the import cost of the staple good rises in tandem with a global increase in prices which could add on to operating costs for restaurant and business owners. 

Malaysia Food Sovereignty Forum coordinator Nurfitri Amir Muhammad said it was unlikely that the problems with local food supply would resolve on their own. 

"Farmers are still selling their rice, so they cannot be accused of pleading low yields," he said. 

"What is happening is at the factory and retail levels." 

The price of imported rise has risen to RM38 per 10kg while the price of local white rice has been capped at the retail level at a rate of RM2.60 per kg.

Nurfitri estimated the country's rice self-sufficiency level at about 65%, saying the market would need to have supply of at least the same percentage. 

Speaking to MalaysiaNow, he referred to claims of local rice being switched with sacks of imported rice in order to turn a profit. 

He said the rice and padi regulatory department had also said that it would take 20% of the rice from each factory to be given to government-appointed parties to produce local rice. 

"Now, customers are said to be buying too much rice, so purchases are limited. The inconsistency of these statements means something is going on." 

At the global level, India, the world's largest exporter of rice, has banned exports due to the dry weather. 

In Southeast Asia, meanwhile, the Philippines has inked an agreement with Vietnam to buy rice from that country, while Indonesian President Joko Widodo has proposed the purchase of rice from Cambodia, China and Bangladesh.

And in Malaysia, Padiberas Nasional or Bernas, the only company granted a licence to import rice, announced a 36% increase in the price of imported rice from RM2,350 per metric tonne to RM3,200 per metric tonne effective this month.

Fatimah Mohamed Arshad, a senior visiting fellow at Khazanah Research Institute, said Malaysia would need to put diplomacy at centre-stage in order to guarantee its rice supply.

"Indonesia has already signed an agreement with India on the potential import of one million tonnes of rice," she said. 

"We could approach nations like Pakistan, Myanmar, Brazil and Uganda for the supply of imported rice." 

Nurfitri meanwhile said that the import licence granted to Bernas meant that it alone had the answers to import efforts. 

"If we want supply, we need to make an agreement when the price of rice is down. Importing rice at high prices goes against their corportate interests. This is the effect of privatisation." 

Economist Adilah Zafirah meanwhile said that rice subsidies and price controls were only stopgap measures.

Speaking to MalaysiaNow, Adilah, from Iris Institute, said the problem would continue as long as cartels are not removed from the country's supply chain. 

"We can achieve the local supply of rice to meet the people's needs, and it possible that one day we could export rice as well given our rich resources and the ongoing efforts to deal with the root problem of cartels.

"Terengganu, for example, has good agricultural practices as well as a supply-chain model that could be replicated at the national level."