Fund for food loans to boost food production, reduce burden of inflation

KUALA LUMPUR: The National Recovery Council (NRC) has recommended that Bank Negara Malaysia (BNM) set up a "fund for food" to encourage farmers and agro-entrepreneurs to explore the country's food production sector more aggressively.

NRC chairman Tan Sri Muhyiddin Yassin said it can be done through the provision of loans by Malaysian financial institutions and commercial banks.

"This way, it will help alleviate the burden of inflation on the people, especially among the B40 group," he said after chairing the council's 7th meeting this year, today.

Earlier this month, Prime Minister Datuk Seri Ismail Sabri Yaakob announced that an allocation of RM100 million from the Agrofood Fund regulated by the BNM would be channelled to cooperatives involved in the sector to boost food production and increase national food security.

In another development, Muhyiddin said the government should carry out a review of the subsidy system in the country as it involved a large amount of money.

"Maybe we can recommend for a targetted subsidy to be implemented to ensure that priority would be given to the deserving groups, such as the B40 dan B50 groups as more than 50 per cent of the subsidies were enjoyed by high-income earners," he said.

On the increase in the Overnight Policy Rate (OPR) which affects loan interest rates in Malaysia, Muhyiddin said the move was appropriate because it was also implemented in other countries, such as the United States, to reduce the burden of inflation.

"Whatever it is, we leave it to the BNM and the Ministry of Finance to decide on the fiscal policy," he said.

-- BERNAMA