Food security policy may be extended

The STAR - Food security policy may be extended

(Saturday April 9, 2011)

By HANIM ADNAN
 nem@thestar.com.my

FOOD security in Malaysia is poised to become more stable and secure with the Government's commitment to possibly extend the expired National Food Security Policy (FSP) and also implement the fourth National Agricultural Policy (NAP 4) this year.

The FSP (2008-2010) was introduced at the height of the global food crisis with prices of food-based crops like wheat soaring by 130%, rice 74% and soybean 87% as a result of supply shortage due to climate change on the back of strong demand from the growing world population.

Under the policy, RM5.6bil was allocated for agriculture development in FSP with defined strategies focusing firstly on increasing the production of rice (see table)

The focus on Malaysia's rice sector can be seen from NAP 1 (1984-1991), NAP 2 (1992-2010) and the revised NAP 3 (1998-2010) with food security being the thrust of the policy for the sector.

It is vital for Malaysia to incorporate a food reserve system or food bank ANNI MITIN (left)

The success of new NAP from 2011 to 2020 therefore will determine whether Malaysia will be food secured through self-sufficiency or import-dependent for daily meals taking into consideration the targeted high-income population.

This prolonged policy is then translated into a prominent objective to attain a reasonable self-sufficiency level (SSL) in rice which has been used as an index to food security in the country.

The SSL was targeted at a comfortable level of 65% in NAP 3, but was required to be at 86% by end of the Mid-Term Review of the 9th Malaysian Plan (2006-2010) in order to fit its production-centric vision of self-sufficiency level in most commodities for reducing deficit in trade balance.

Most of the efforts are carried out via a comprehensive set of market interventions in the form of input and output subsidies, production programmes, guaranteed minimum price for paddy, paddy price support and other production-based incentives.

For this year despite the expiry of FSP, the Government has decided to continue with the incentives for farmers under the national FSP to ensure “sufficient food supply at all times”.

An estimated RM2.77bil was allocated for management expenditure, of which RM1.54bil would be for increasing paddy output, whereby farmers would be provided assistance.

The assistance is in the form of fertiliser subsidy (RM409mil), padi price subsidy (RM480mil), padi seed subsidy (RM85mil), padi production incentive (RM150mil), padi yield subsidy (RM80mil) and rice price subsidy (RM167mil).

An additional allocation of RM400mil for the padi sector is needed to ensure supply would not be affected by unpredictable weather conditions.

Southeast Asia Council for Food Security and Fair Trade (Seacon) executive director Anni Mitin (pic) says there are a lot of food insecurity issues not being thoroughly addressed under the National FSP, like accessibility issues and acceptability concerns such as food safety, nutrient values and food production technology, in light of the climate change and rising cost of production due to high external input dependency.

She says Malaysia should look at its national food security interest far beyond production and stockpiling of rice. “Rice is only one of Malaysia's staple food. What about meat, fish, vegetable, fruits and other grains?”

In Malaysia, she claims that only rice farmers under Muda Agriculture Development Authority and Kemubu Agriculture Development Authority schemes are well-taken care off by the Government instead of ensuring all agriculture-based farmers are given a sense of guarantee in terms of increasing their income.

Anni says Malaysia also has the capability to take its vegetables and fruits cultivation into the next level. So far, the country has been successful, being self-sufficient in chicken and eggs.

Malaysia currently is a net importer of food, importing about RM13bil worth of food annually.

While some economists say Malaysia does not really need to be self-sufficient in food items, this thinking is only good if the population mass has good income to buy the goods, says Anni.

“As it is right now, there are the hardcore poor with household income of RM400 and even the urban poor with household income below RM1,500 still cannot afford to buy food as prices are rising,” explains Anni.

She says Malaysia need to broaden the scope of its existing FSP and NAP along the line of the Asean Integrated Food Security Framework and the Strategic Plan of Action on Food Security in the region. (see table)

“It is vital for Malaysia to incorporate a food reserve system or food bank, and also an integrated information system on the food value chain.

Anni says it is unfortunate that vegetable and fruit farmers in Malaysia still do not have specific pricing mechanism i.e. farm gate prices for their goods, unlike industrial commodities like cocoa, pepper, rubber and palm oil which have agencies looking after their respective pricing.

Fama's role

The role of Federal Agriculture Marketing Authority (Fama) needs to be strengthened, not only to encourage stable production but also increase demand for Malaysian produce especially in the domestic market to reflect Malaysian food sovereignty. LPP must also play a bigger role to empower farmers.

“For the country's food security to run effectively, there need to be a multi-stakeholders' approach.

“All parties should be involved such as the state governments on land issues, Health Ministry with regard to food safety and nutrition aspects related agencies such as Farmers Organisation Board and Domestic Trade, Co-operatives and Consumerism Ministry among others,” adds Anni.

Federation of Malaysian Vegetable Growers Association secretary-general Chay Ee Mong says recently vegetable cultivation in Malaysia holds big prospects given the industry's strength in terms of conducive lowland and highland climate, minimal risks of natural disasters, market opportunity especially with 23% or 184,000 tonnes per year of local vegetables exported to Singapore and the fund for food/incentives given to farmers.

However, on the other hand, since it was free to import vegetables from China, Thailand, Indonesia and Australia, this had made it uncompetitive for local vegetable producers.

Other weaknesses within the industry include shortage of cheap and skilled workers, lack of cold chain facilities, poor packaging and handlings causing about 20% to 30% damages had affected the quality of local vegetables.

Prices also were determined by wholesalers and sometimes through many hands, resulting in a big difference between ex-farm and retail prices, adds Chay.

Malaysia's consumption of vegetable per capita is only 49kg per year, which is very low compared with other developed countries.

He projects the land bank required for self-sufficiency in vegetable at about 30,000ha.

Currently, the total vegetable cultivation area is 38,000ha or 0.61% of the country's total agriculture area.

The country's vegetable production is 800,000 tonnes per year versus the local requirement of about 1.06 million tonnes annually.