Rice industry in Malaysia can grow exponentially

Kuala Lumpur, The Gulf Observer: The paddy and rice industry in Malaysia can grow exponentially and become a major source of revenue if farmers in Sabah and Sarawak were to cultivate speciality rice grains on a large scale, Khazanah Research Institute (KRI) said today.

The think tank said there were around 500 unique rice varieties and that these seeds need to be preserved to prevent genetic loss of their unique characteristics; among them the Bario, Biris and Bajong.

In just one village there can be multiple varieties of rice, KRI said in its report launched today titled “The Paddy and Rice Industry of Sabah and Sarawak: Status and Potential”.

For example in Kampung Katagayan in Tambunan, Sabah there are several varieties of specialty rice like Padi Tamparuli, Tadong, Keladi Merah, Bukit Bulan, Keladi Putih and Seribu.

KRI deputy director of research Sarena Che Omar who is the lead author of the report said that Malaysia’s paddy and rice industry were dual in nature where one focused on the cheaper price controlled medium grained rice and the other was for speciality heirloom rice.

She said in order to grow this revenue channel, the government needed to update some laws and policies to improve the businesses acumen and competitiveness among paddy farmers in East Malaysia.

One of the laws that needed updating is the Control of Padi and Rice Act 1994.

“The Control of Padi and Rice Act 1994 (522) is an important act that’s there to regulate the prices of rice but it poses some challenges like the need for around RM200,000 in capital for three months to start cultivating rice, it requires one to get permission to export.

“KRI acknowledges that Act 522 is an important Act to protect the supply and prices of cheap medium-grained rice with the goal of ensuring food security. Meanwhile, specialty rice has the potential to be commercialised and exported. These two rice segments have differing objectives which require separate policies and regulations,” she said in presenting her report.

“Farmers we spoke to want to plant their own unique rice as they like the flavour profile and it gives them a different option but they also want to know how they can sell the excess and make some extra income but they don’t have the capacity to try and reach a high end market like selling to places like St Regis or a Hilton,” she added, referring to international upscale hotels.

The difference between cheap and special rice is that cheap rice is sold at around RM1.60 to RM2.60 per kg, is high volume with a price ceiling, matures within 100 days and is valued at RM3.3 billion a year.

Speciality rice is priced around RM5 to RM22 per kg, is low volume with premium pricing, has a long maturity rate at three to six months, has hundreds of varieties and the seeds are not certified (informal or heirloom) and the industry is valued at RM3.1 billion.

“Given the low rice self-sufficiency for Sabah and Sarawak, it may be beneficial to explore alloptions for improving production, including the potential of rural specialty rice varieties as a means to assist in achieving that objective.

“But, of course, achieving rice self-sufficiency alone is not the only goal we should be aiming for. Other holistic factors of food security include improving income of farmers (food affordability) and instilling sustainable, good agricultural practices,” former minister Tan Sri Nor Mohamed Yakcop who is incumbent KRI chairman, said at the report launch.

Apart from that, KRI said the challenges faced by the industry were regulations that were designed solely for the purpose of security (in supply and prices).

In an effort to promote the uniqueness of specialty rice to both local and international markets, the report suggests several policy considerations. These recommendations would serve to support small businesses producing specialty rice, as well as facilitate the distribution of rice beyond Sabah and Sarawak.

The first suggestion to state governments would be to safeguard as many unique seeds and top introduce a universal naming system and to formally characterise these varieties.

Federal government needs to recognise the big difference between cheap and specialty rice and not subject the latter to the same regulations as the former. Once these two rice groups are differentiated the report suggested to allow specialty rice to be exported without needing special permission from the Director General, allow rice to be transported across state, review input subsidies for growers of specialty rice meant for export and to lower the minimum working capital requirement for the relevant licenses for micro and small enterprises in this sector.

By adopting these steps KRI hopes it will help alleviate the farmers from living in poverty as they can now expand their specialty rice business and market it to a bigger audience.

The think tank hopes it would increase the overall income of the locals while boosting Malaysia’s food supply and reserves.