Committee to deliberate on rice industry’s new model

Bernas stays as country’s sole rice importer until concession agreement to import and supply rice ends in 2021


The special committee formed to oversee the country’s rice industry is still deliberating on the technicality of forming a new model in order to tackle the monopoly in the industry, according to Agriculture and Agro-based Industry Minister Salahuddin Ayub (picture).

The government plans to disband Padiberas Nasional Bhd’s (Bernas) status as the single national importer under the new model.

Currently, Bernas owns about 28 out of 180 mills in Malaysia, where between 650,000 metric tonnes and 800, 000, metric tonnes of rice are imported into the country per year.

“We recently had a meeting led by Economic Affairs Minister Datuk Seri Mohamed Azmin Ali to discuss the technicality of several models suggested for the rice industry.

“At the moment, we have not come to a conclusion on the right new model and we will table it when a model is agreed by the government and stakeholders,” he said at the Agrobank Agropreneur Award 2018 in Kuala Lumpur recently.

Salahuddin said Bernas will remain as the country’s sole rice importer until its concession agreement to import and supply rice ends in 2021. “At present, Bernas still has roles to play,” he said.

Salahuddin said in June, a working paper consisting of the findings and recommendations of the model and assessment of Bernas’ monopoly status was to be presented to the Cabinet in August, of which has been extended to September 2018.

Last month, Bernas defended its role in Malaysia’s rice supply and argued that the liberalisation of rice industry would not guarantee a cheaper price for consumers.

According to him, 60% of the rice consumed in Malaysia are locally produced white rice, which are price-controlled by the government, while 30% are imported white rice and 10% imported brown rice, which cannot be sold cheaper than the local products.

In 1974, Bernas was appointed by the previous government under the single gate keeping mechanism, which granted Bernas the monopoly of the rice industry.

The mechanism was introduced to ensure the welfare of rice farmers by maintaining low prices for consumers while at the same time safeguard the food security.

For the last decade the mechanism has largely stabilised the price of local rice at RM2.60 per kg, while imported white rice at a range of between RM2.80 and RM3.20 per kg.

According to Salahuddin, the government is also looking to develop and implement a new policy which is an extension to the National Agri-food Policy set in 2011 that will end in two years.

“Seven years is long enough to see the result of the policy and determine the maturity of the agriculture industry.

“If necessary, we will review the policy and look at all aspects — the assessment and new suggestions involve towards increasing the productivity of the agriculture and food sector,” he said.

The policy was introduced and approved by the Cabinet on Sept 28, 2011, replacing the National Agriculture Policy with aims to address the issue of sufficient food supplies, which are safe for consumption.

Salahuddin said the commodity sector contributed 8% to the national GDP in the second quarter of 2018, while the agriculture sector contributed between 3.2% and 3.3%.