KUCHING: The federal government’s decision to subsidise 10 kg imported white rice in Sabah and Sarawak, reducing its price from RM45 to RM31, is highly welcomed; however, it could only be a short term measure.
Malaysian Academy of Sciences fellow Datuk Dr Madeline Berma said both states have very high incidence of poverty, while the expenditure on rice and food consumption is relatively higher in Sabah and Sarawak as compared to other states.
Thus, she said, subsidising imported white rice is highly needed as it will provide relief to low-income families and food-related businesses – due to low supply of local white rice and high price of imported white rice.
Speaking to the New Sarawak Tribune, the economist said it is also necessary for the government to address the low supply of local rice production in both states in the long run.
She said there is a need to provide incentives to encourage more farmers to continue with paddy cultivation and to ensure that rice farming is worth the cost and hard work.
“Both states are below self-sufficiency in rice production despite their huge land sizes due to the decreasing numbers of paddy farmers. So, the government must address the high price of agriculture inputs such as fertilisers and weed killers and pesticides,” she said.
Last week, Prime Minister Datuk Seri Anwar Ibrahim announced a subsidy of RM950 for each metric tonne of imported white rice to lower its price to a maximum of RM31 for a 10 kg pack.
This means that for every 10-kg pack of (imported white rice) sold to consumers, the government subsidies RM9.50, and RM4.75 for every 5 kg pack
However, Anwar also acknowledged that the price for this rice in the interior areas would be higher due to logistics costs; thus, he would discuss with the state government how to reduce costs.
Meanwhile, economist Prof Geoffrey Williams opined that breaking the rice import monopoly would be the best solution; to keep imported white rice at the lowest competitive price, including in the rural areas of Sabah and Sarawak.
“This will open up the market, allowing for competitive dynamics in the market and allowing various players to participate in the supply and demand aspects of the industry.
“If consumer prices remain high, then the government can consider giving cash support to low-income groups. I believe this is the way to solve the high price of imported white rice and other related issues,” he said.
On the restriction of each person to 10 sacks of 10 kg rice a year to address the shortage of local white rice in the market, Williams said the policy is unclear and seems very unreasonable and difficult to monitor.
He argued that individuals or smaller households will use less rice and can still buy 100 kg and sell it to those who need it.
“They can actually sell it on a secondary market to bigger families or more likely to restaurants that need more than they are allowed to buy. This defeats the purpose of the restrictions and rationing,” he said.
“There is also the problem of monitoring and enforcement which is very costly and subject to abuse and corruption. We are already hearing of rice cartels and mixing of rice, even with plastic. It appears to be a very difficult policy to implement in practice,” he added.
