A group of farmers protested in Alor Setar, Kedah today over the steep drop in the price that manufacturers are buying paddy from them, which they allege may be due to manipulation.
Pertubuhan Persaudaran Pesawah Malaysia (Pesawah) wants the government to intervene and review price control mechanisms which it said have not been updated since 2008.
According to reports, on Oct 3, manufacturers in Kedah revised the price they would buy paddy from farmers to RM1,200 per metric tonne, compared to RM1,700 per metric tonne a few months ago.
RM1,200 per metric tonne is the floor price set by the government for manufacturers to buy paddy from farmers.
This came three weeks after a shortage in the supply of local rice to consumers, which is now reportedly on the mend.
Pesawah said that the price revision was abnormal given the previous local rice shortage.
"This shows that the situation on the supply of rice and the price of paddy is not normal, or that there is meddling from a cartel," it said in a statement.
Pesawah also reportedly questioned whether the Paddy and Rice Control Division at the Agriculture and Food Industry Ministry was in cahoots with cartels to lower prices.
Pesawah chairperson Mohd Fuad Yaacob said the price drop contradicted an order from Paddy and Rice Control director-general Azman Mahmood in September, who in a meeting with industry players allegedly instructed Bernas to buy paddy from farmers at a price of RM1,600 per metric tonne.
"So are the authorities bending to (demands from) the paddy cartel?" Fuad was quoted as saying by Berita Harian.
Previously, there were separate allegations that a cartel was manipulating the price of local rice, through allegedly selling standard rice - which is price-controlled - as broken rice, which is not price-controlled.
Weak price-control enforcement
In its statement, Pesawah urged the government to increase the floor price of paddy to RM1,500 per metric tonne as a safeguard against alleged price manipulation.
"Farmers are in a tough spot after the costs of planting paddy rose when the price of paddy went up, including the price of seeds, machinery, and rental for fields.
"Hence, the drop in paddy prices will surely result in unexpected major losses," it added.
According to the group, the price of certified paddy seeds is RM52 per bag when bought from manufacturers and RM56 per bag retail.
This, the farmers claimed, was proof of weak enforcement by authorities as the control price for certified paddy seeds is supposed to be RM31 per bag at factories and RM35 per bag retail.
Last Wednesday, Agriculture and Food Security Minister Mohamad Sabu said farmers would still get RM1,700 per metric tonne of paddy, after taking into account a government subsidy of RM500 per metric tonne.
The RM500 per metric tonne subsidy was increased from RM360 by Prime Minister Anwar Ibrahim in August.
The subsidies are paid directly to farmers who are registered for the scheme.
Malaysiakini was made to understand that when the price of paddy was RM1,700 per metric tonne, the subsidies would help the farmer earn a total of RM2,200 per metric tonne. - Mkini
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