ALOR STAR: In light of Putrajaya's decision to float chicken retail prices starting next month, chicken breeders are pinning their hopes on the government to introduce a smooth transition mechanism for subsidy removal in the sector.
During a recent meeting between breeders, integrator companies, and the Agriculture and Food Security Ministry, the Kedah Chicken Breeders Association secretary, P. Ravintharan, expressed their concerns and expectations for this transition period.
"We are hoping that the government will consider a soft-landing mechanism for the withdrawal of subsidies, at least for the remaining two months of this year.
"We have also suggested that the government consider targeted subsidies or assistance for small and medium-sized breeders during the meeting in Putrajaya last week," Ravintharan said.
He also underscored the hope that these recommendations would be considered before the Agriculture and Food Security Minister Datuk Seri Mohamad Sabu unveils the details of floating chicken and egg prices on Oct 30.
Mohamad was reported as saying that his ministry, together with the Economy Ministry, the Finance Ministry, and the Statistics Department, were fine-tuning the particulars of the price floating mechanism
He also said the ministry held talks with the industry, specifically those producing eggs and chicken, to ensure that prices could be maintained without sudden increases.
The current retail ceiling price for standard processed chicken is RM9.40 per kg, while grade A eggs are 45 sen each, grade B (43 sen) and grade C (41 sen).
Ravintharan also said he expected that the retail price of chicken would increase a bit from the current ceiling price once the government completely withdraws subsidies.
"We can't tell for now because the price will depend on the market force, the supply and demand.
"The price will be determined based on the input costs, which fluctuate from time to time," he said.
Ravintharan also thanked the ministry for holding engagement sessions with the industry players before deciding on the floating price mechanism.
"We look forward to having more talks with the ministry to provide our feedback and input," he said.
Meanwhile, Bismi Empire Sdn Bhd (Ayam Bismi) managing director Mazlina Kamarudin said the company accepted the government's decision to abolish the subsidies for chicken breeders and egg producers.
However, she urged the government to consider the breeders' call for an intervention to reduce their operation costs.
"As small and medium industry players, we are hoping for the government to do something towards reducing the cost of buying chicks and chicken feeds.
"The prices for the input remain at an all-time high since the Covid-19 pandemic outbreak. Once the government removes the subsidies, the breeders must bear all the costs alone.
"If the big players in the supply chain decided not to bring down the input costs, the small and medium player will suffer in the event of low retail price," she said when contacted.
Following the government's decision to abolish the ceiling price, Mazlina said it should be practised throughout the year.
"If the government decides to impose a ceiling price for two months during the festive period, the breeders will suffer should the input costs remain high.
"The festive period is the time for breeders to gain a bit higher margin to sustain the business and pay bonuses to the employees."