The high food prices crisis in the country, no doubt has been caused by a number of domestic and global factors, including the ongoing economic recovery from the COVID-19 pandemic and the war in Ukraine.
The only consolation is that the rising cost of living that is leaving people unable to maintain their quality of life affects not only Malaysia but almost every country in and around the world.
Cost-of-living is a term coined by economists for the amount of money needed to maintain a certain quality of life while paying for housing, food, taxes and healthcare.
We have flooding at the end of 2021 in several states which caused mass damage to infrastructures and destroyed a significant amount of the country’s crop yields.
When things were about to return to normal, another massive flooding at the end of 2022 exacerbated the problems.
And in a short space of 3 months thereafter, the country again faced another round of flood across several states.
This caused the country to purchase more essential goods from other countries while having fewer of our own to sell, harming the country’s economy further.
The food import bill for the country has seen an increasing trend from RM51.4 billion in 2019 to RM55.4 billion in 2020 to a staggering RM63 billion in 2021.
If this persists, it will become very fiscally expensive to the government.
Already, it has become difficult for the rakyat to find necessary goods such as eggs which are in low supply across the country.
The depreciation of the currency has also made goods more expensive to import and for the people to afford.
Many Malaysians start to wonder.
Why is Malaysia experiencing continuous increase in prices of necessities and across the board?
The Malaysia Competition Commission (MyCC) in a 2019 report identified multiple causes of the exorbitant food price in the market that includes amongst others:-
1. Market manipulation by middlemen and multiple intermediaries with no transparency in price determination along the supply chain, causing an unreasonable hike in food prices,
2. Manipulation of AP which results in increasing food prices.
In this country, a small group of elite and well-connected individuals holds approved permits (AP) and they transacts through various middlemen and multiple intermediaries.
These groups are commonly referred to as cartels.
Business cartels are in a sense comparable to organized crime.
The rakyat was elated when the then-9th Prime Minister announced on 18 May 2022 that in ensuring sufficient food supply in the country, the government agreed to the removal of AP to import foodstuff into the country.
The 9th PM emphasized that previously where APs were required to import beef and cattle, it is now no longer required and anyone can import whatever food items to ensure sufficient supply.
However, much to the dismay of the rakyat, on 19 May 2022, a day after the announcement by the 9th PM, the Ministry of Agriculture and Food Industries (MAFI) announced that ONLY 4 specific types of agro-food commodities i.e round cabbage, old coconut seeds, chicken (chicken cuttings and round chicken) and milk are no longer subject to AP.
If the government is serious about decreasing food prices then it should seriously take action against those manipulating prices that caused suffering among consumers, especially low-income consumers.
Just like the Societies Act, the government has 2 powerful legislations to act against price manipulators, which are the Price Control and Anti-Profiteering Act 2011 and the Competition Act 2010.
These legislations are powerful instruments to detect price manipulation practices and profiteering, and more importantly to take strong action against manipulators and profiteers.
Similar as with Section 70 of the Societies Act 1966 which grants discretionary power to the Minister of Home Affairs, Section 60 and 60a of Price-Control-and-Anti-Profiteering-Act-2011 allows the Minister charged with the responsibility for domestic trade and consumer affairs to make regulations as may be expedient or necessary and the Minister may, by order published in the Gazette, amend the Schedule.
The unity government really needs to show to the rakyat that they are taking concrete steps to ensure that imported food and essentials are undertaken by parties that will ensure lower prices for consumers.
The government needs to focus on increasing regulatory pressure in order to destabilise the existing cartels.
Profiting by AP holders should be terminated.
If no action is taken, this could fully reverse the gains in poverty reduction seen in the country.
In the midst of rising food prices and the role of middlemen and intermediaries, where is the Federal Agricultural Marketing Authority (FAMA), an agency that was established on 30 Sept 1965 whose objective is to make Malaysia a major world producer of food through the efficient and effective marketing of food and agricultural products?
FLK is a content creator under the Newswav Creator programme, where you get to express yourself, be a citizen journalist, and at the same time monetize your content & reach millions of users on Newswav. Log in to creator.newswav.com and become a Newswav Creator now!
The User Content (as defined on Newswav Terms of Use) above including the views expressed and media (pictures, videos, citations etc) were submitted & posted by the author. Newswav is solely an aggregation platform that hosts the User Content. If you have any questions about the content, copyright or other issues of the work, please contact Newswav.
