RICE HISTORY AND POLICIES IN MALAYSIA

RICE (Oryza sativa) is the third most important crop grown in Malaysia after Oil Palm and Rubber. For me who works in agriculture sector for almost 40 years and write more than 8,000 articles about agriculture familiar with this paddy industry history and government strategy respectively. In Malaysia historically before independence (1957) the food policies in Malaysia were implemented to serve the colonial masters who focused mainly on plantation crops (especially oil palm, rubber and cacao) for export and foreign investments. During that period as I know there were no support programs dedicated to infrastructure development and research and development allocated. As the SSL of rice in Malaysia at that time reported was below 50% in which crop such as tapioca and other tubers was the main source of carbohydrates for the poor. However, the situation after post-independence there are some changes when some organization such as MARDI, FAMA, LPP, Bank Pertanian Malaysia and others form their parent Department of Agriculture (DOA) was established. MARDI established to lead research on agriculture which included rice and paddy. Later as I know in which in 1971, the National Board of Paddy and Rice (LPN) was formed to oversee the national rice supply and farmers’ welfare. The first notable milestone for the paddy industry was the construction of Muda Irrigation Project (1966 -1970) which supplied water for the rice granaries in Kedah and Perlis and the budget is from International Loans. In 1994 a board known as LPN was corporatized to form Padiberas Nasional Berhad (BERNAS), the nation’s single rice gatekeeper. The rice crisis in the 1970s set the tone for a blanket shield on rice production. The issues such as the heavy subsidies, market control, guaranteed minimum price (GMP) for farmers, fixed retail ceiling price and import monopoly by BERNAS were triggered by this crisis. The long history of paddy industries in Malaysia are long good and bad for us to know. However, in this article in "Anim Agriculture Technology" blog I would like to share the rice history, trading partners and governmental policies in Malaysia.

In the beginning the monopoly by the gatekeeper suppressed open market practices. In 1988 reported that the World Bank raised a red flag on Malaysia’s market intervention approach which heavily caters for subsidies that burdens the economy and hence labelled the rice industry as both non-viable and unsustainable (World Bank, 1988). Reported that the higher spending on the cost of production did not necessarily okey to translate into higher productivity. According to other studies at that time in which if fertilizer subsidy is removed it will impact the cost of production will to increase, however then the rice productivity is projected to drop. Though many criticize by many groups later these government policies in which BERNAS as the guardian of the country’s rice stockpile had continuously protected the national rice sector against world market price fluctuations. Further, BERNAS keeps rice imports checked while ensuring that the farmers always have a buyer even when the demand is low. BERNAS is committed at sustaining a sufficient rice stockpile for the entire nation over a course of 45 days of buffering period. If indeed the domestic production drops, MoU is in place with Thailand and Vietnam as the next layer of insulation. Later in 2008 the main rice exporting countries such as Vietnam, India, China and country such as Cambodia halted export to secure supply for domestic consumption. The international price for rice supply showed pronounced escalation during the fuel and financial crisis. This pressed the panic button on net rice importers such as Malaysia and the Philippines. However later in which was also the world’s largest rice importing country are resorted to establishing trading with Thailand which decided to hike up the price to $700/metric tonne. The price then went up to about $1,000/metric tonne when other neighboring countries joined the race to secure enough stockpiles of rice for their own consumption. Before 2008 reporte that the price of rice hovered between $200 - 300/metric tonne. Food security has always been on the agenda for food-related policies even before the latest food crisis. Various policies under different names were drawn to ensure the country does not go through another round of crisis. The National Food Security Policy and Agrofood Policy (2011 to 2020) were introduced to increase the national rice buffer stock. These policies were later was implemented in the interest of food security and to increase farmers’ income. In Malaysia, food security is equated to rice security and hence the government had mandated full SSL but to date, the values has been staggering around 70%. According to the United Nations Committee on world food security, all people at all times are physically, socially and economically accessible to sufficient, safe and nutritious food that meets their preferences and dietary needs for an active and healthy lifestyle (Source: FAO, 1996). As previous food policies reached the end of its term, the current National Food Security Policy Action Plan (2021- 2025) had vouched to embrace the five pillars of food security as per the UN’s definition: availability, accessibility, consumption, stability and sustainability. Under the Malaysian context, availability is referred to sufficient domestic rice production otherwise recognized, when all Malaysians consume locally produced rice, free from import dependence. Accessibility imparts equitable distribution among people and equal purchasing power. In this regard, the governance and regulatory policies in Malaysia have set the feedstock price of unhusked raw rice at a guaranteed minimum price (GMP). The selling price imposes a 20% deduction from the fresh weight of the unhusked rice grain which accounts for rice husk agro-waste. According to personal communications with local farmers, the selling price fluctuates in accordance with the grain quality, as well. The market price for a kilogram of rice has been ranging between RM3-6. The consumption and stability criteria are interconnected with availability and thus, are heavily modulated by the national rice productivity. Sustainable agricultural technologies build resilience to shocks and better manage trade-offs in food security during unprecedented times. The main thrusts for the paddy sector are to increase rice productivity via mechanisation, empowerment of research and technology, intensification of the use of rice by-products, improve the management of rice stockpile, and restructuring of the rice subsidies and incentives. Thanks...

By,

M Anem,

Senior Agronomist,

Putrajaya,

Malaysia.

(August 2023).