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Malaysia's Rice Industry: A Revamp Needed?


By Melati Mohd Ariff

(The First of a Two-Part Feature)

KUALA LUMPUR, April 16 (Bernama) -- So far, Malaysians have yet to reach the situation where they need to queue up in long lines in order to buy rice.

But this does not mean that we should remain idle and wait for the situation when we have to press the panic button.

Domestic Trade and Consumer Affairs Minister Datuk Shahrir Abdul Samad had came out with a reassuring statement that the nation has enough supply of rice despite the current global shortage of this commodity.

His counterpart in the Agriculture and Agro-based Industries Ministry, Datuk Mustapa Mohamed, had also reassured the public that Malaysia's rice stocks could hold for more than three months, while Syarikat Padi dan Beras Nasional (Bernas) was reported to have 600,000 tonnes of rice and paddy in its warehouses.

The agency is also reported to be importing between 600,000 and 700,000 tonnes of rice from Thailand and Vietnam.

The foreign media reported that the global price for rice had jumped to US$700 (about RM2,240) per tonne, three times more than the price five years ago.

As Malaysia is also importing rice, any hike in the commodity's global price would create impacts in the local market, even though the heat is yet to be felt.


Malaysia produces 70 percent of its rice consumption. Hence, it needs to import the balance of 30 percent from other nations.

Universiti Putra Malaysias (UPM) Dr Amin Mahir Abdullah said this is inappropriate as Malaysia has vast land resources.

"In the 1960s and 1970s, the government was targeting self-sufficiency by pumping huge investments in the construction of infrastructure like drainage and irrigation channels.

"Research work to produce disease-resistant, high-yield and twice-a-year varieties was step up," he said.

The Agri-business and Management Policy laboratory head for UPMs Agriculture and food Policy Research Institute told this to Bernama here recently.

He said Malaysia had reached 90 percent of its rice self-sufficiency in the 1970s and the rice and padi industry at that time had focused on 100 percent self-sufficiency.


The nations economic structure, which switched from the agriculture-based to that of the industrial in the 1980s, had significantly altered the polarity of Malaysias rice and padi industry.

This switch had created competition for resources like manpower, land and water and this, according to Dr Amin Mahir, had led to a major blow to the local rice and padi industry.

He said much of the agriculture land had been converted for industrial and housing purposes.

"Rapid development in the housing and industrial sectors had impeded the agriculture sector growth.

"Now the average is a mere 2.0 hectares (of land) for a paddy farmer with an average age of 55-60 years old," he said.


Paddy is nothing new to this country and cultivating this crop is not that difficult.

However to rehabilitate idle paddy land or creating new planting zones for paddy requires huge investment.

"In the 1960s and 1970s, we were able to see irrigation channels almost everywhere, but now this scenario is scarce. We need to remember that paddy planting needs a lot of water. Infrastructures for drainage and irrigation need to be constructed and this requires land reacquisition if new padi-cultivation areas are to be opened.

"If in 1966, the Muda Irrigation Project for Kedah and Perlis had cost RM238 million, just imagine how much it is going to cost now? I agree if the government plans to open up new rice bowl areas in Sabah and Sarawak but the projects should be commercially-viable," said Dr Amin Mahir who is also a lecturer of UPM's Agriculture Faculty Agri-business and Information System Head.


When speaking of the rice-production industry, many may query why the industry flourishes in Thailand, based on the quality of the rice grains, which proved to be popular among the Malaysian consumers.

According to Dr Amin Mahir, based on the Philippines International Rice Research Institute (IRRI), the production per hectare is 3.3 tonnes for Malaysia, Thailand (2.9 tonnes) and Vietnam (4.9 tonnes).

"But in terms of the production cost, ours is the highest. This makes our padi production less viable as compared to the other nations," he said.

He said padi is the main crop in Thailand, contributing 26 percent of the worlds exports, making it the globes number one rice exporter.

"Quality of the grains is definitely the priority of rice producers in Thailand, as what is wanted by consumers including those in Malaysia. "That is why the (Malaysian) rice import is high, at RM558 million in 2006 and close to 25 percent of the commodity is fragrant rice," said Dr Amin Mahir.

On Malaysia's rice production industry, it still centers on quantity with the market geared for domestic consumers.

"That is the reason why past research had focused on the High Yielding Variety that is expected to boost productivity and living cost.

"The farmers, in turn received aid based on the quantity sold at RM248.10 a tonne regardless of the grains quality. The grading is on the maturity and moisture content aspects", he said.



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