KUALA LUMPUR: The government must go beyond raising the floor price for padi to stabilise farmers' income by introducing targeted subsidies and technological advancements, an expert suggested.
Universiti Utara Malaysia research fellow Associate Professor Dr Bakri Mat said increasing the floor price to RM1,800 could provide immediate financial relief for farmers.
However, he said, it may also lead to unintended consequences, including higher rice prices for consumers and increased reliance on imported rice.
"Raising the floor price to RM1,500 or RM1,800 is a short-term solution to address rising costs, as many farmers have reported sharp increases in fertiliser and machinery prices," he said.
"This would provide immediate financial relief by guaranteeing a minimum return.
"However, I believe this approach may have significant drawbacks, including inflated rice prices for consumers and increased reliance on imported rice, similar to Malaysia's rice market crisis in 2018."
Yesterday, a group called on the government to address farmers' appeals for a higher padi floor price.
Gabungan Nasionalis chairman Aminuddin Yahaya said rice farmers would continue to face losses due to high cultivation costs unless the floor price was increased to RM1,800 per tonne, as requested.
He warned that without this adjustment, many farmers might abandon padi farming, as costs far exceed the government-set floor price of RM1,300 per tonne.
Bakri, who holds a PhD in food security policy in Malaysia, said a hybrid approach would be more sustainable, combining a moderate floor price increase with subsidies for production costs.
"While raising the floor price offers immediate benefits, combining it with subsidies for production costs could reduce the impact on consumers and prevent market distortions.
"This would support farmers without undermining affordability for the general public."
He added that subsidies and targeted incentives could provide more effective support than raising the floor price alone.
"For example, Thailand's fertiliser subsidy programme significantly reduced production costs and boosted farmers' incomes.
"A similar initiative in Malaysia could work by subsidising key inputs like machinery, irrigation and sustainable farming technologies.
"Financial incentives for climate-resilient practices could also reduce farmers' reliance on higher prices for profitability.
"In contrast to a blanket price increase, subsidies offer flexibility, allowing the government to address both short-term and region-specific challenges without burdening consumers."
Bakri also stressed the need to modernise Malaysia's padi farming industry, citing Vietnam's success in reducing production costs through technology adoption.
"Investing in modern farming technology can significantly cut costs and improve productivity.
"For instance, precision farming technologies in Vietnam have led to a 15 per cent reduction in input costs, making farmers more competitive.
"In Malaysia, however, many farmers still face high costs due to outdated methods and labour shortages.
"Additionally, improving supply chain efficiency is equally important.
"Post-harvest losses remain high, with a 2023 study showing that poor storage and transportation infrastructure result in nearly 20 per cent wastage.
"Addressing these inefficiencies could boost farmers' net incomes without requiring drastic price increases, providing a win-win solution for both farmers and consumers."