ALOR STAR: The government has been urged to come up with an alternative mechanism to help small and medium-sized breeders to cope with high input costs in light of Putrajaya's decision to float chicken retail prices and remove subsidies starting next month.
Bismi Empire Sdn Bhd (Ayam Bismi) managing director Mazlina Kamarudin said while the company respected the government's decision, an alternative mechanism has to in place to help SME-sized breeders to stay afloat.
"At the moment, the supply has stabilised and might be slightly over the demand with the help of the subsidies injected by the government as well as the influx of imported chicken.
"However, we cannot tell for sure if the breeders will maintain the current chicken production volume following the removal of the subsidy beginning next month.
"Our input costs such as the price of chicks remain high. Hence, without the subsidy, the breeders will have to absorb all the high input costs," she said when contacted.
Mazlina said as for now she could not pre-empt the farm price and the retail price of chicken once the price is floated.
"Hopefully, the supply will remain stable but it will depend heavily on whether the breeders are capable of maintaining the current production volume without the subsidy," she said.
Mazlina also reiterated the stand that the government should refrain from imposing ceiling price during festive periods or when the demand is high as it would affect the breeders' margin.
"A prolonged price control enforcement will hurt the breeders especially with high production costs without the subsidy," she said.
She was commenting on Agriculture and Food Security Minister Datuk Seri Mohamad Sabu's announcement earlier today that subsidies and price controls for chicken would be discontinued from Nov 1.
The government however, has decided to retain subsidies for chicken eggs for now. The retail ceiling price for grade A eggs is 45 sen each, grade B (43 sen) and grade C (41 sen).
Mohamad was reported as saying that the decision was made after taking into consideration the current supply and price trends and the cost of chicken production has begun to stabilise, contributing to the current market prices being below the ceiling price of RM9.40 per kg set by the government.
He added that the government has spent RM3.8 billion for egg and chicken subsidies since February last year.
When presenting 2024 Budget on Oct 13, Prime Minister Datuk Seri Anwar Ibrahim said the government was considering floating the price of chicken and eggs as the supply of both items were now stable.
On Oct 20, the New Straits Times reported that Kedah Chicken Breeders Association hoped that the government would introduce a smooth transition mechanism for subsidy removal in the sector.
Its secretary P. Ravintharan was reported as saying that the association has also proposed to the Agriculture and Food Security Ministry to consider targeted subsidies or assistance for SME-sized breeders, at least for the final two months of this year.
Earlier today, it was reported that the Consumers Association of Kedah (Cake) has expressed concern on the government's decision to withdraw subdies and price control on chicken would lead towards a price hike of food.
Its president Mohamad Yusrizal Yusoff was reporting as saying the move as being too drastic and lacking proper preparation in ensuring stability in the retail price of chicken.