ISSUE ON PADI PRODUCTION COST IN MALAYSIA

RECENTLY The Malaysian Government has adjusted the floor price of padi to RM1,500 per tonne, effective February 16, 2025, to help farmers absorb rising production costs and maintain the price of local white rice at RM2.60 per kg. Before reported that padi farmers bear rising service cost says a NGO group known as Pesawah. Reported that farmers are still incurring losses, with service costs reaching up to 55% despite the adjustment of the padi floor price, says the Malaysian Padi Farmers Brotherhood Organisation (Pesawah). Its chairman, Abdul Rashid Yob, said this is due to the pricing of retail diesel based on market rates in which has increased by RM1.20.  Hence, farmers must bear the rising costs of machinery, ploughing, and padi harvesting. He said that service provider rates varied by region. For example, the rental cost of padi harvesting machines in Kedah used to be RM120 per 'relung' (0.71111 of an acre) but was now RM230'. This is not regulated by the government, and farmers must absorb the overall service costs. Reported that seven months have passed, and the government has yet to take action to provide 'fleet cards' or incentives following the announcemen in which last Thursday, the government announced that the padi floor price would be adjusted from RM1,300 to RM1,500 per metric tonne, effective tomorrow.  Agriculture and Food Security Minister Datuk Seri Mohamad Sabu also announced that the price of local white rice would remain at RM2.60 a kilogramme in the market. And to maintain this price, the government must bear production costs amounting to RM150 million over the next six months. This article in "Anim Agriculture Technology" blog I rewrite few articles regarding an issue on padi production cosat in Malaysia fir readings.

A group og padi growers known as 'Pesawah' head said that if the government could allocate RM150 million in subsidies to millers, there should be no issue with increasing subsidies for farmers. The padi industry falls under Act 522, which is strictly regulated, meaning both padi and rice prices are controlled. Since both are controlled, the government must provide subsidies to farmers. If the government wants to keep rice prices low, subsidies must be increased to offset rising costs. They hope the government will introduce a new model for the padi industry. However, tr revised padi floor price falls short of farmers' expectations as claim bya Pesawah ( The Malaysian Padi Farmers Brotherhood Organisation (Pesawah) in which they has expressed its gratitude to the government for revising the floor price of padi purchase from RM1,300 per metric tonne to RM1,500. Its chairman, Abdul Rashid Yob, expressed disappointment that the revised floor price did not meet the farmers' expectation of RM1,800 per metric tonne. Pesawah expresses its gratitude for the revised padi floor price announced by the Agriculture and Food Security Minister today in Parliament. However, we are disappointed as the revision is insufficient to cover rising costs caused by the removal of diesel subsidies and the increase in seed prices in 2024. This announcement does not meet our aspirations and meet their expectations in which is to set the padi floor price at RM1,800 (per metric tonne). Pesawah urged the ministry to reconsider the farmers' demands and to take more concrete steps to assist the farmers. 

They propose an additional RM300 padi incentive (for each metric tonne) to be given to farmers, in addition to the RM1,500 floor price that has been announced. We are also calling for a reduction in the certified paddy seed price from RM58 to RM35 (per bag of 20kg) in which was the original price before the increase in March 2024. The justification for the seed price increase at that time was the prevailing padi purchase price (not the floor price), which was RM1,700 as offered by millers. Since the purchase price has since decreased, the seed price should also be adjusted accordingly. They added that the farmers' demand for the padi floor price to be revised to RM1,800 is reasonable and well-founded. It takes into account the rising cost of living, increased diesel and seed costs, and various other challenges faced by farmers in ensuring the sustainability of national padi production. We hope the government will listen to and understand our plight. We are the backbone of the nation's food production. Without adequate support, how can we continue to produce padi to meet the needs of Malaysians". Rashid said that out of the billions of ringgit in subsidies injected by the government, only 20 per cent reached the farmers directly in the form of a padi price incentive. The remaining subsidies mentioned by the honourable Minister in Parliament today primarily benefit vendors supplying seeds, agricultural inputs, and machinery services. The core issue with subsidies is the fact that rice prices have not been reviewed for 17 years. This is why subsidies have increased every year to absorb controlled rice prices. Padi subsidies are not an act of government generosity but a government obligation because rice prices are regulated.

Earlier today, Agriculture and Food Security Minister Datuk Seri Mohamad Sabu announced a revised padi floor price from RM1,300 per metric tonne to RM1,500, effective this Sunday. Mohamad informed the Dewan Rakyat that the decision was taken considering the rising costs of wages, agricultural input, and the impact on rice production costs. He also announced that the government would maintain the price of local white rice at RM2.60 per kg, with RM150 million allocated to absorb production costs over the next six months. In January, 2025 Pesawah urged the government to revise the padi floor price to RM1,800, considering the increase in operating costs for padi farmers since 2023. In other report stated that 'Govt to allocate RM150mil in subsidies to offset padi price hike' as told bye  Agriculture and Food Security Minister Datuk Seri Mohamad Sabu is set to present Cabinet papers next week regarding the price increase for padi. A new floor price for padi will be announced next week, as Agriculture and Food Security Minister Datuk Seri Mohamad Sabu is set to present cabinet papers on the price adjustment. Prime Minister Datuk Seri Anwar Ibrahim said the government will allocate an additional RM150 million in subsidies over six months following the price hike. He emphasised that any price increase for farmers would not result in higher costs for consumers. Government do not want prices to rise for consumers. For now, I have discussed this with the Finance Ministry to ensure the government continues to provide additional subsidies so that local rice prices for consumers remain unaffected. The government will bear an additional RM150 million in subsidies for six months, and this decision will be finalised soon. On Jan 27, 2025 the Malaysian Padi Farmers Brotherhood Organisation (Pesawah) and around 300 farmers from the peninsula called for immediate government intervention to raise the padi floor price to RM1,800 from the current RM1,300. A memorandum, too, had been handed to Prime Minister Datuk Seri Anwar Ibrahim's political secretary, Chan Ming Kai, at Perdana Putra on the same day. Meanwhile, responding to the submitted memorandum, he said he welcomes it and has reviewed it together with the Agriculture and Food Security Minister, assuring that the matter will be addressed. Thanks.

By,

M Anem,

Senior Agronomist,

Malacca City,

Malacca,

Malaysia.

(Febuary 2025).