KUCHING: The proposal to set a ceiling price for pork works the best to prevent further increase in the short term, especially during a festive season, where an increase in demand is expected.
However, if the ceiling price is set below market price, the government needs to subsidise producers in order to keep the business going. Otherwise, some might decide not to produce or sell if they are not gaining much profit.
Associate Professor in the Faculty of Economics and Business (FEB), Universiti Malaysia Sarawak, Dr Evan Lau said thus, it was important to ensure that producers or pig farms and retailers do not go on ‘pork holiday’ (not producing or selling) due to such ceiling pricing, when or if – it is set below the market price.
This, he said, would also create a ‘vicious circle’ of price hikes on other final products where pork is the main production source.
“It will, in the long run, negatively impact the economy and the industry itself. So, proper implementation and planning are needed for this to take place,” he told New Sarawak Tribune.
On Monday, Sarawak Food Industry, Commodity and Regional Development Minister Datuk Seri Dr Stephen Rundi Utom said his ministry would be proposing the implementation of a price ceiling for pork to the Ministry of Domestic Trade and Living Costs, to stabilise the price and prevent further price hike.
Dr Rundi said the price hike was due to shortage of supply due to the African Swine Fever (ASF) outbreak, which has greatly reduced live pig production. Besides, the increased in the price of feed, which used to be RM800 per tonne, now costs RM2,000 per tonne.
Citing the example of imported grain corn, he said the price had increased from USD165.45 per tonne to USD255.5 per tonne.
Lau said Russia and Ukraine were significant producers and exporters of several commodities including wheat, corn, wheat, corn, which are used in animal feed to produce beef, pork, poultry and fish for Asian markets.
Thus, the Russia-Ukraine conflict has impacted the global supply chains, which also evident in other food-related products; Sarawak is affected as well.
He said the state government was looking into establishing more Pig Farming Areas (PFA) to expand the production of this commodity to meet both domestic and foreign demand supply, would eventually stabilise the price.
However, the economist said, more effort was also needed focusing on modern breeding technologies and improving farmer management skills, which can ensure a more sustainable industry in the long run.
“This will need commitment from all stakeholders and not just the government alone. Everyone has an active role to play in this situation. And this is not just specifically for this specific industry but food and agriculture as a whole.
“This, in turn, will allow this sector to develop into a steady and resilient industry. These efforts, despite being ambitious, may contribute toward reducing Sarawak’s enormous dependence on imported sources while promoting a self-sufficiency economy. This would prevent future food crises, the roots of hunger and famine,” he added.
Lau said to promote and increase the involvement of PFA, policymakers could provide subsidies or tax exemptions for these players. Besides, meat scientists should look forward to developing cultured meat and plant-based alternatives to overcome food insecurity under such worst situations.
