Malaysiakini News

Subsidy abuse leading to rice oversupply

Gooi Hsiao Leung  |  Published:  |  Modified:

MP SPEAKS Kedah and Perlis rice mills are currently facing serious oversupply of rice stockpile in their mills, which they are unable to sell, estimated at more than 100,000 tonnes of rice.

According to rice millers, this excess supply of stockpiled rice is largely caused by corruption and abuse of the national rice subsidy programme.

In October 2014, a former senior employee of Padiberas Nasional Bhd (Bernas), Mohd Roslan Bani Amin, publicly exposed that quota receivers or wholesalers were required to pay bribes or "toci", as it is widely known in the rice industry, to corrupt Agriculture Ministry officers to obtain the "special quotas" to supply the national subsidised rice - Super Tempatan ST15 percent broken rice - which is meant to be sold to low-income earners.

According to Roslan, instead of selling the ST15 percent rice to retailers, the quota receivers would either sell the subsidised rice to other wholesalers at a profit or repackage the ST15 percent rice ("tukar baju") and pass it off as five percent broken rice, a higher grade rice, to be sold in the market to fetch a much higher price.

Rice millers complain that because of the flooding of cheap ST15 percent rice being traded in the market because of abuse and corruption, wholesalers are not buying from rice millers and as a result they are experiencing a rice stockpile.

This problem is compounded by widespread rice smuggling activities from neighbouring countries.

In reality, if the rice industry is properly managed by the government, there would not be a problem of excess rice because our country doesn’t produce enough rice locally to be 100 percent self-sufficient.

Locally, we only produce 70 percent of the country’s rice demand, while the rest is imported by Bernas.

Rice famers anxiety

Rice farmers too, especially in Kedah and Perlis, whose livelihoods are heavily dependent on income derived from their harvested crops, are concerned about the effects of the oversupply of rice stockpiled in local rice mills.

Kedah and Perlis padi farmers harvesting their crops at the end of this month and next month, are extremely worried that local rice mills will not buy their padi due to the oversupply of rice.

Additionally, the farmers fear that rice millers will be forced to make high deductions when grading the quality of their padi to be sold, which would greatly reduce their income.

 

Clearly the magnitude and effects of the abuse and corruption in the management of the national rice subsidy program are far reaching - affecting the entire supply chain of the rice industry, from farmers, to rice millers, wholesalers and ultimately, the consumers.

Notwithstanding the Agriculture and Agro-Based Industries Minister Ismail Sabri Yaakob’s (right) announcement to totally revamp the selection process of quota receivers in November 2014, following allegations of corruption and abuse of the national rice subsidy programme, rice millers complain that the new selection process is far from being transparent and satisfactory in curbing corruption and abuse.

Among the main criticisms of the new selection process is that everything is decided at the Agriculture Ministry headquarters in Putrajaya, without any consultation or feedback from local industry state actors.

No interviews or consultations are conducted with local quota receiver applicants. No consultations are made with local rice millers or wholesalers associations to evaluate the suitability or performance track records of applicants. Local state agricultural departments on the ground are not consulted on the suitability of applicants.

The latest new list of monthly quota receivers just released by the ministry this week only strengthens rice millers’ fears and suspicions that bribes continue to be paid in order to receive quotas to supply the subsidised rice.

The majority of wholesalers selected in Kedah are newly-appointed and unknown to the market, and do not have local distribution networks or equipment and machines to pack rice.

Each month the government sets a quota of 40,000 metric tonnes of ST15 percent rice to be supplied for Peninsular Malaysia, and 20,000 tonnes for Sabah and Sarawak, costing our taxpayers annually a budgeted sum of RM528 million to feed around eight to nine million mouths daily.

Abuse of rice subsidy scheme

However, the rice subsidy scheme has come under heavy criticism - because it is alleged that due to mismanagement, abuse and corruption, the subsidised rice has not reached the targeted recipients, namely the poor.

The national rice subsidy programme has been abused and mismanaged for years, enriching politically-connected individuals in the Agriculture Ministry.

I have made urgings in Parliament in November 2014 and again here, to urge the minister to seriously consider terminating the rice subsidy programme in its current form.

In the meantime, the agriculture minister must give his assurance to personally investigate the causes of the excess rice stockpile faced by rice millers in the country as this is an important national food security issue.

I ask that Ismail Sabri also ensures that all future appointments of quota receivers are selected in a transparent and fair manner to ensure that only qualified and deserving wholesalers are given quotas.


GOOI HSIAO LEUNG is Alor Setar MP and PKR supreme council member.

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