Malaysiakini News

Much abuse in national rice subsidy scheme

Gooi Hsiao Leung  |  Published:  |  Modified:

MP SPEAKS A few days ago, I had asked the agriculture deputy minister whether the ministry would review the ST15 percent national rice subsidy programme.

This follows the Public Accounts Committee’s (PAC) recent recommendation to suspend the national rice subsidy programme for having failed to achieve its objectives in benefiting the poor.


In April, the PAC had called for the national rice subsidy programme to be suspended after it found that there were no standard operating procedures (SOP) or guidelines in the sale and distribution of the subsidised ST15 rice to low income earners and the poor.


The purpose of this rice subsidy scheme was to produce ST15 percent (ST15) broken rice, to ensure that low income groups and the poor would have sufficient supply of the subsidised ST15 rice at a controlled retail price of between RM1.65 to RM1.80 per kg. 

In 2014, our government allocated RM528 million in its budget for the ST15 national rice subsidy programme. By year-end 2015, our government would have spent in excess of RM3.9 billion for the entire programme since its introduction in 2008.


The deputy minister’s answer in Parliament - that businesses of rice millers, wholesalers and retailers would be adversely affected if the national rice subsidy programme is stopped - totally fails to address PAC’s concern that subsidised rice is not reaching the intended target of low income groups in Malaysia.


The deputy minister also could not give me a straight answer on whether the agricultural ministry has data on actual amounts of ST15 rice sold by wholesalers to retailers on a monthly and yearly basis, after I had pointed out to him that the agriculture minister had failed to answer this exact question in my written question asked in the last Parliament sitting.


Since its inception, the national rice subsidy programme has been plagued with allegations of government mismanagement, corruption and abuse in its implementation.


Corruption allegations

There have been allegations of corrupt officials in the agricultural ministry demanding bribes to give quotas to wholesalers to buy and sell ST15 rice, and complaints of widespread practice of unscrupulous wholesalers mixing ST15 rice and selling the rice off as higher grade (ST5 and ST10) rice for profit.


Additionally, there is no effective government control and supervision of retailers in the sale of the subsidised rice to ensure that only the targeted low income groups can buy ST15 rice.


There is a clear and urgent need to review and revamp the implementation of the national rice subsidy programme in its current form, failing which hundreds of millions of taxpayers’ money will be wasted each year without benefiting the poor, as the subsidy program was originally intended to achieve.


As such, I fully support the PAC's call to Malaysia’s auditor general to conduct an audit of the rice subsidy scheme. I urge the auditor general to focus their audit on the following areas:


i)      Whether the selection process of ST15 rice wholesalers has been carried out in a fair, transparent and proper manner;


ii)     Whether the government has implemented effective enforcement mechanisms to stop abuse of wholesalers mixing ST15 rice and selling off the rice as a different grade of rice to fetch higher prices;


iii)    Whether the government has implemented effective measures to monitor and control wholesalers and retailers nationwide - to ensure that ST15 rice is only sold to the targeted low income group and the poor.


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


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