The RM3.3 billion spent on rice subsidies by the Agriculture and Agro-based Industries Ministry succeeded in covering losses incurred by Bernas as the country’s sole rice supplier but failed to benefit its targeted lower-income groups, said the Auditor-General’s Report 2014, released today.

“An audit carried out between March and July 2015 revealed that one of the programme's main objectives, which is to benefit the target group to purchase rice at cheaper prices, has not been fully achieved.

“While a quota was set specifically for the target group, subsidised rice was also purchased by foreigners, restaurant and food stalls, as well as to feed pets,” the report said, adding that this had resulted in the unavailability of subsidised rice in the retail market.

On Oct 31, the ministry had announced that the subsidies have been abolished, following too many leakages in the programme.

From 2008 to 2014, subsidy allocations were approved for the government to procure and supply Super Tempatan 15 percent (ST15) rice not exceeding 40,000 metric tonnes per month to wholesalers in peninsular Malaysia and 20,000 metric tonnes per month of ST15 to wholesalers in Sabah and Sarawak.

The report, however, noted that quotas to supply rice were still given to wholesalers with expired licences, and that special monthly quota allocations were given without going through the selection process.

Other problems identified also included wholesalers who received the quota but did not actually carry out wholesaling activities and that the distribution of quotas was not in accordance with their capabilities to distribute the supply.

Aside from problems with the supply of subsidised rice, it was also revealed that in Sarawak, there were instances where the price of subsidised rice was higher than the controlled price.

Past editions of Auditor-General Reports had recorded almost identical concerns with regards to the supply of subsidised rice.

In October 2012, it was reported that the Auditor-General’s Report 2011 had noted that the subsidy programme did not have proper mechanisms to ensure that target groups benefit from a steady supply of rice at an affordable price.