The Paddy Arithmetic Still Does Not Add Up

to raise floor price of paddy to RM1,300 per tonne, from RM1,200 per tonne 

OSTB : So the paddy farmers are going to get paid an extra RM100 per tonne of paddy. Paid by whom? Paid by whoever buys paddy from the farmers. Who buys paddy from the paddy farmers? Did you buy paddy from the paddy farmers? The answer is no. Paddy is bought by that taukeh padi dan beras tanah air kita yang tercinta.

So now the taukeh has to pay an extra RM100 per tonne of paddy. 

But has the price control or the price cap (kawalan harga) on rice (beras) been lifted? Or adjusted upward? Not to my knowledge. It is still RM2.60 per kg for the 5% beras tempatan or whatever they call it. (The one that is missing from the supermarket shelves).

So the floor price of paddy at the farm has been increased from RM1,200 per tonne to RM1,300 per tonne but the selling price of local rice (beras tempatan) has not been increased. 

This means the profit margin for the  taukeh is going to be squeezed further - by RM100 per tonne. The beras tempatan is really going to disappear now from the shelves.

But wait a minute. Here is the solution:

to allocate RM58.1 billion for subsidies, incentives and assistance, with 50% of the allocation for controlling prices of goods and services.

So 50% or RM29 billion will be used to "control" prices of goods and services. So the taukeh will collect the subsidies from the gomen. 

How much? Does an extra RM100 per tonne of paddy sound reasonable to you? 

This is just taking taxpayer's money from the right pocket and paying the taukeh in his left pocket.

So now the taukeh's job is much easier. He just bills the gomen "Gimme my subsidy". Electronic funds transfer before the bank closes for the day.  

Will this solve the "shortage of local rice" problem in the country?  

I think as long as India does not lift the ban on rice exports this problem will persist. But what has "imported" Indian rice got to do with the price of our local rice?

Mao Zedong said, “The guerrilla must move amongst the people as a fish swims in the sea.."

The views expressed are those of the writer and do not necessarily reflect those of MMKtT.