Need to rethink our rice industry

It comes to mind that we need to end the subsidies on foods, even rice. Or in the case of what was recently raised by the Malay Economic Action Council (MTEM), especially rice. And it was an eye opener to get their data on issues plaguing our farmers.

For one, it was calculated that the seasonal revenue for paddy farmers in Sanglang is a mere RM4,773 for 1.4 hectares. Meanwhile, seasonal costs is calculated at RM3,027 thus leaving a mere RM1004.84 for the farmers to take home to their families.

It doesn't sound so bad to have a thousand bucks, right? Wrong.

That figure is for an entire season, which is four months long.

This means that the farmer gets an average monthly income of a mere RM250.

The rice industry for Malaysia is huge, it is a RM7 bil industry. But put that together with what the farmer is earning? Well, you don't have to be a rocket scientist to see something is wrong somewhere.

Today, the farming industry in Malaysia, particularly rice, is a dying one. There are only 13% paddy farming families in this nation of 30 million, with an average age of 60 years old.

If you thought the farmers have it bad, the next step in the supply chain has it equally bad.

With 95 per cent of the farmers being Malays, they formed up the Malay Rice Factory Association of Malaysia to set up their own factories.

From boasting numbers of 110 factories before, there are now only 35 left.

With all this in mind, let us consider what the government is targeting for the paddy farmers by 2020.

Among other points, this government is targeting the opening of 400,000 hectares of new land for paddy farming. Through the Economic Transformation Programme, the Malaysian government is also targeting self sufficient production, 85 per cent local production by 2020.

That figure currently stands at 57 per cent.

This is no longer a case where you can provide more subsidies to farmers in order to bolster their income. There needs to be total reform and further study into making their incomes more attractive.

Thus, when people say that subsidies distort the market, here we are. Subsidies on rice, yet very little intervention down the supply chain from farm to fork, has caused and will definitely cause our so called rice bowl to grow ever smaller to the point of insignificance.

And that is why we need to reconsider whether subsidising rice is truly the best move. Farmers used to be able to sustain a household in the past, but this is no longer valid as we have seen above.

So, should we reconsider paying a fair price for rice to allow the industry to become more attractive for a future generation of paddy entrepreneurs?

Or, will we be just content on increasing our import of rice to cater to local demand without a care about food security?

This, I believe, is dependent on the government's next Malaysia Plan which will plot out the next five years.

Perfect timing, since the average paddy farmer will be at the age of retirement by 2020.