“So I think we should not lose focus with another subsidy, which will cost the government a lot of money,” he told FMT.
“The issue now is not the price of local rice, but its availability as it seems to have disappeared from the shelves of all hypermarkets, supermarkets and convenience stores.”
Should any form of subsidy be deemed necessary, he suggested directing it towards supporting local rice producers to enhance their production capabilities and profitability.
Ameer was commenting on a suggestion by Ismail Awang, president of the Bumiputera rice dealers association, calling for subsidies to be introduced to control rice prices.
Ismail was quoted as saying by Utusan Malaysia that a portion of Petronas’s profits should be allocated for rice subsidies, amounting to about RM800 million a year.
National rice importer Bernas recently announced that the price of imported white rice will be raised by 36%.
Ismail’s suggestion was welcomed by lecturer Ahmed Razman Abdul Latiff of Putra Business School as a suitable short-term solution to stabilise prices.
However, he expressed concern about its long-term fiscal burden and impact on innovation by rice producers.
He also cautioned against diverting funds from Petronas for rice subsidies as the oil and gas company is a valuable national asset.
“If we allow income from Petronas to be channelled for rice subsidies, we need to make sure that it will not impede Petronas’s capital expansion and sustainability,” the economist said.
He proposed a voucher system for households affected by the increase in the price of rice by which they could redeem the vouchers at retailers in exchange for rice.
“Retailers will collect these rice vouchers to be credited against their income tax. This way, the government does not need to find money to give subsidies,” he said.
