As soaring food prices start to bite, experts say Malaysia learned little from pandemic

·5-min read
Malay Mail
Malay Mail

KUALA LUMPUR, May 21 — Experts said Putrajaya has not responded quickly enough to tackle long standing structural problems threatening domestic food security, keeping Malaysia vulnerable to the world commodities supply shock that has sent prices of basic goods soaring.

Food policy advocates have long warned about the dangers of the country’s growing reliance on imports to meet its food demand, as well as fertilisers and crops that make livestock feed, which make it especially susceptible to supply chain disruptions.

Food insecurity came under the spotlight after the Covid-19 crisis revealed underlying disparities in access to food, but experts said there has been no tangible action taken since the pandemic to address Malaysia’s food conundrum, when calls were growing for food production to be prioritised over cash crops.

Fatimah Mohamed Arshad, who heads the Agriculture and Food Security Cluster at the Academy of Professors Malaysia, suggested Putrajaya should put in place what she called a “Food First Policy” to divert resources towards producing more food locally, including domesticating production of inputs like making our own fertilisers or small machines so costs could be lowered.

“Malaysia should give high priority to food by instituting a Food First Policy, and mobilising resources to increase food productivity and value added and reduce cost of production,” she told Malay Mail.

“It needs to produce her own fertiliser, apply advanced technology, develop small machines and processing plants for small producers and traders and upgrade to a high-tech supply chain, among others.

Putrajaya unveiled the National Food Security Action Plan 2021-2025 last year amid public concern about the rising cost of food when Covid-19 curbs disrupted supplies.

Despite being resource-rich, Malaysia’s food trade deficit has grown wider in the last decade. The nation of 33 million people imported RM55.5 billion in food products compared to RM33.8 billion of exports in 2020, translating to a large deficit of RM21.7 billion, according to Bank Negara Malaysia data.

Total food imports have amounted to RM482.8 billion compared to RM296 billion in exports in the last ten years, a trend food security researchers felt is “worrying”.

Malaysia now ranks 39th in the 2021 Global Food Security Index by the Economist Intelligence Unit that scores food security over 100 countries using indicators like affordability, access and natural resources and resilience among others.

Malaysia’s ranking was far below resource-scarce countries like Singapore, which came in at 15th and Qatar, at 24th.

Tan Sri Muhyiddin Yassin, then the prime minister, said the plan was aimed at reducing the country’s reliance on food and input imports by shifting focus towards domestic food production.

One of the plan’s major thrusts would be to modernise food production, move away from labour-intensive methods and beef up research.

But experts said structural reform and food production takes time so it will take years before consumers can expect to see tangible results from the plan, so some researchers have proposed liberalising imports of food as a quick solution.

“We should limit the issuance of Approved Permit (AP) for imported products to certain categories only (such as) food items that have (lower) self-sufficiency ratios,” Amanda Yeo, analyst with think tank Emir Research, wrote in a paper on the topic published earlier this month.

“In other words, liberalise our import system for food to ensure level playing field and tackle monopolies and oligopolies which adds to the cost of doing business and cost of living.”

Prime Minister Datuk Seri Ismail Sabri Yaakob on Wednesday waived the AP requirement for food imports in a bid to alleviate some of the problems stemming from global supply shortages that is squeezing food import prices.

The move has been criticised by local producers who said the move could hurt local farmers and food producers who will have to compete with cheaper imports from larger producing countries, which tend to be highly subsidised.

Food security advocates and researchers have mostly agreed that Malaysia’s food security will likely hinge on the political will of elected leaders to make painful reforms that would mostly hurt allies that have benefitted from a distorted supply system that tends to enable cartels and oligopolies.

Nurfitri Amir Muhammad, an activist who coordinates the Food Sovereignty Forum, said the AP import system had largely enriched politically-connected business elites instead of smallholders, even as he suggested the protectionism afforded by a permit quota could still help smaller producers thrive.

“There are many allegations that the AP system has been abused to allow some parties to monopolise the market,” he told Malay Mail.

“We need to reform and improve the system so that it would be limited and given only to eligible wholesalers, not abolish it totally,” he added.

On the retail side, Yeo said the government should work closely with non-governmental organisations to organise outdoor food bazaars that could allow food producers to sell their fresh products directly, cutting off the “middle-men” to make the food cheaper.

“They could identify several hotspots in every Malaysian state and implement the carnivals at least twice a month. The mom-and-pop stall owners will have the opportunity to sell leftover but consumable food or “lower quality” vegetables and fruits, generating their economic livelihoods,” she said.

“On the other hand, the middle class would find it more affordable to purchase ‘lower quality’ food at lower prices.”

Malaysia's Consumer Price Index (CPI) in March 2022 rose by 2.2 per cent to 125.6 against 122.9 in March 2021, surpassing the average inflation for the January 2011-March 2022 period that stood at 1.9 per cent. The spike was driven mostly by food prices, the Department of Statistics Malaysia said, which rose 4 per cent in March year-on-year.

Food security is now a key component of the five-year 12th Malaysian Plan, which Putrajaya said underscored its commitment to keep food affordable and accessible to all.

But experts have cautioned about problems that often beset the execution, citing failures of previous blueprints unveiled by several past administrations because of the government’s lack of willingness to address structural deficiencies at every level of the supply chain.

“If Malaysia continues business as usual or the way it does now, the situation may worsen further. This is because the world market may face more shocks in the future,” Fatima said.

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