RICE ISSUE: A LESSON FOR ALL?

By Melati Mohd Ariff

KUALA LUMPUR, May 2 (Bernama) -- Whenever there is a price hike for rice, among the questions that linger in the mind of consumers is why Malaysia is not among the globes major rice producers.

And, what Thailand and Vietnam, which are among the worlds rice producers have, that Malaysia does not have?

There are several answers to these questions.

A major contributing factor to this debacle is Malaysia's policy when it focused on industrialization.

Hence, when there is a jump in the global price of this commodity, the nations leaders have switched their attention towards boosting the country's rice production.

The Agriculture and Agro-based Industries Ministry is eyeing to push the country's rice production from the current 72 percent to 80-90 percent in the coming seasons.

This move is hoped to reduce the country's dependency on imported rice. It was reported that Malaysia annually imports 30 percent of its rice needs, or about 700,000 tonnes with most of this commodity coming from Thailand and Vietnam.

ESCALATING PRICE

Rice is categorized as a strategic security commodity since it is the staple food for Malaysians.

Local consumers have every reason to be concerned when there is a global price hike of rice, as they would face with uncertainties in the market price and supply of this commodity.

Lately, the rices price is steadily on the rise.

"Before, I used to buy a 5kg bag of rice at RM16.50, but now the price is RM18.50.

For 10kg, the price is RM37.00 now as compared to RM35.00 previously, a jump of RM2," said a housewife who wished to be identified as Rahayu.

"Even though the price is escalating, I still need to buy it. Before, I used to buy that of another brand but if I cook the rice in the morning, in the evening it had already turned bad," she said.

Civil servant Zulkifli Ibrahim said the price of the Vietnam-produced rice that he buys from a hypermarket had jumped.

"Three months back, it was RM 28.70 for a 10kg bag, now it is sold at RM35.70," he said.

Canteen operator Mazlina Ismail complained that the price of the 50kg bag of rice that she had purchased had catapulted to RM115 from RM85. The escalating price is not only for rice, but also that of other items as well. It is difficult to do business nowadays," lamented Mazlina.

Recently, the Federation of Malaysian Consumers Association (FOMCA) announced that its findings had shown escalation in the price of rice nation wide.

There is also price manipulation, as the government has no control over the price of imported rice as this determined by the producer countries.

FOMCA's chief executive officer Muhammad Sha'ani Abdullah said the federation received complaints over the uncontrolled price hike.

"The complaints prompted FOMCA to conduct checks and it is true that there is hike in the price of rice at between 10 and 20 percent. However this is for rice which is not regulated by the government," he said.

CONTROLLED RICE

He said the rice regulated by the government under the Rice Order (Grade and Price Control) 1992 is the local super grade that has 15 percent broken rice.

"The selling price is fixed between RM1.65 and RM1.80 per kg based on zonal categories in Peninsular Malaysia," said Muhammad Sha'ani.

The poser is that, most of the rice sold in supermarkets contain the maximum of 10 percent broken grains, while that of 15 percent is difficult to find.

"This means that the rice with 15 percent broken grains are sold mostly in the rural areas and consumed by the lower-income earners," Muhammad Sha'ani told Bernama.

At the same time, FOMCA received complaints from Bumiputera wholesalers that they are facing difficulties in getting the supply.

"They used to get the supply from Bernas and they can use their own brand names. A number of these wholesalers have their rice-packaging mills and this cuts down the production costs.

"Now Bernas supply only its subsidiaries or consortium comprising major wholesalers which are not Bernas subsidiaries. This consortium imposes certain quotas on independent wholesalers," he said.

Bernas had also packaged the local super rice (15 percent broken grains) with existing brands, hence preventing the independent wholesalers from using their own brand names," he said.

DILIGENT MEASURES

Careful measures are needed to deal with the price and supply of rice to prevent Malaysia from being drag into food crisis as that experienced by several countries like Egypt, Haiti and Cameroon.

A Washington-based agency recently reported that the worlds food crisis is getting more acute. At least three major rice-producing nations -- Vietnam, Brazil and India, have enforced the ban on exports of this commodity, causing the price to jump in the international market.

The price of rice in Thailand, which is the worlds largest exporter of this commodity, had increased to US$1,000 (RM3,150) per tonne last April 24. a jump by some 70 percent within the last four months.

Amidst the worlds worst food crisis since the Second World War, the Malaysian Government had announced a RM4.0 billion allocation for the implementation of the National Food Security Policy to ensure enough food supply for the country, particularly during crisis times.

The government appears not to be contented with the 65-75 percent rice production for the country's own needs, but wants the target of 100 percent production to be reached.

It had also named Sarawak as the country's new 'rice bowl. Meanwhile, FOMCA said Malaysia's dependency on imported food would create negative impacts on the nation when natural disasters or wars occurred.

"Food supply can be cut off. In this context, the government needs to have strategic planning and political will in drawing out the National Food Security Policy, to make it a really effective long-term planning," said Muhammad Sha'ani.

LPN, BERNAS

The Malaysian government, in fact, has given priority on the food issue. This can be seen with the setting up of the Lembaga Padi dan Beras (LPN) in September 1971.

This task was later shouldered by the Padiberas Nasional Berhad (Bernas) when LPN became a private entity under the National Privatisation Policy.

As the price hike of rice being the current hot topic, Bernas had inevitably came into mention as the agency inherited LPNs tasks in managing the country's rice supply.

Bernas was named as the country's sole importer of rice and already there were calls for the government not to renew Bernas import permit when it expires in 2010.

Muhammad Sha'ani who is also FOMCAs secretary-general said Bernas inherited LPNs responsibility to ensure enough supply of rice for the nation.

"It is Bernas responsibility to store and maintain the National Rice Stockpile to ensure stable supply and price of rice," he said.

He said, as the sole import license holder of rice, Bernas was reported to have forged joint-venture firms in rice-producing nations. Among these nations are Thailand, Myanmar, Vietnam, India, Pakistan and China.

"FOMCA was informed that the role of these joint-venture companies is to compile data on the supply and price of rice in these countries.

The joint-venture firms would buy rice at good prices and store it in warehouses in the respective rice-producing nations.

"When needed, the rice is shipped to Malaysia. This way, Bernas is able to control the price of rice from the major rice-producing countries," he said.

Muhammad Sha'ani said the data compiled allows Bernas to know before hand the exact price situation.

-- BERNAMA