KUALA LUMPUR: The Institute for Democracy and Economic Affairs (IDEAS) has urged the government to implement reforms to break the monopoly in the rice industry, facilitate the transition to an open market and the deregulation of imports in the next eight years.
It said the phased approach must be underway by 2031, as Padiberas Nasional Bhd's (Bernas) 10-year government concession runs from 2021 to 2031.
IDEAS chief executive officer Dr Tricia Yeoh said this would ensure that supply chain challenges and high import costs could be improved as the price of essential goods rise globally.
"The call by certain groups to ban foreigners from buying local rice scapegoats vulnerable communities and redirects the cause of the issue at hand.
"We urge the government to use the next eight years to implement the reforms that will encourage competitiveness, efficiency and innovation within the local rice market."
Recently, Agriculture and Food Security Minister Datuk Seri Mohamad Sabu said breaking Bernas' national rice monopoly would require a "solid reason" and "time".
Yeoh said controlling the price of rice to achieve food security through price stabilisation had led to gradual monopolisation of the padi and rice supply chain.
She said IDEAS had outlined a roadmap, titled "Padi and Rice Sector Policy Roadmap: Towards Equity and Sustainability", that envisions the deregulation of farm subsidies and import monopoly, among other reforms.
"With the extension of Bernas' concession until 2031, issues besetting the agriculture industry such as slow growth as well as the low investment of new capital and new entrants of young farmers continue to prevail."
IDEAS senior fellow Professor Fatimah Mohamed Arshad said after the 2008 rice price crisis, Malaysia had not taken steps to seriously revamp its padi sector to build resiliency against market vagaries and uncertainties.
She said Malaysia was continuing its half-a-century-old protectionism policy despite the deindustrialisation impact and overall slow growth, particularly in productivity.
"The industry is trending downwards, overwhelmed by climatic factors, high input costs, inflation and structural deficiencies. As production declines, the dependency on imports increases together with imported inflation.
"India's export ban shock had plunged the country into 'rice shortage and price crises', which is avoidable if Malaysia had been able to ensure rice supply security through higher productivity and production and a more competitive industry.
"Clearly, the industry is in need of systemic change for resiliency rather than a short-term firefighting strategy."