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Malay rice mills say facing extinction as complaints remain on 'cartels', monopolies

This is despite the community's traditional link to the padi plantation sector.

3 minute read
Rice plantation is traditionally linked to the Malays, but they are fast losing grip in the sector due to monopolies and well-oiled big players who control rice mills and wholesalers.
Rice plantation is traditionally linked to the Malays, but they are fast losing grip in the sector due to monopolies and well-oiled big players who control rice mills and wholesalers.

Malays in the rice milling industry are becoming increasingly uneasy about their dwindling numbers, with only a handful of Malay-owned rice mills still operating in a sector long linked to the community.

Many also lamented a recent directive by the agriculture and food security ministry in Perlis for all current rice stocks in the state to be handled through several companies licensed by Padiberas Nasional Bhd (Bernas), saying this will only strengthen the rice monopoly that has long been the bane of the industry.

From 220 Malay-owned rice mills nationwide, there are now only 11 still operating, many of which struggling to survive.

Industry players say this handful of mills are barely getting by in the face of government policies that, according to them, are of little help.

The same is said to be true for Malay rice wholesalers, many of whom have already closed down.

In Perak, for example, there are only three Malay wholesalers still operating.

One of the surviving mills and wholesalers is owned by Mohamad Tarmizi Yop.

Tarmizi said he had brought the problems of the Malays in the rice industry to the attention of Agriculture and Food Security Minister Mohamad Sabu, but that no steps had been taken to solve them.

"Where is Mat Sabu? Where is Anwar Ibrahim who said he wanted to fight for the rights of the people, the rights of the Malays?" Tarmizi told MalaysiaNow.

The Malays' involvement in the rice industry is seen as closely linked to the community's traditional role as rice farmers.

Tarmizi said the government could not remain silent about the problems faced by Malay millers and wholesalers.

"The few who are still surviving are on their last legs," he added.

He said the crux of the problem is the fact that wholesalers have no restrictions when it comes to buying padi.

rice-beras_Mnow_20230929This allows big companies with a lot of capital to buy large quantities, and most of these companies are owned by Chinese businessmen.

"Although we have capital and a network of customers, we cannot compete with these big companies," he said.

Tarmizi described the big companies as "rice cartels", adding that they include government-linked companies, which he said have a monopoly in the rice industry.

Recently in Perlis, the government allowed only four companies to produce local white rice, which has been in short supply in the market since last year.

MalaysiaNow has learnt that the agriculture and food security ministry has issued a directive that all current stocks comprising 140,000 tonnes of rice to be milled for distribution, supermarkets, hypermarkets and mini-markets must be produced by four companies.

In a circular sighted by MalaysiaNow, rice mills in Perlis were instructed to sell local white rice to these companies at RM2,550 per tonne.

However, there is still a shortage of local white rice in supermarkets despite the National Action Council on Cost of Living ordering that all current stocks of padi and rice purchased from manufacturers must be processed and released to the local market immediately.

An industry representative who did not wish to be named said the ministry's move had only worsened the plight of Malay millers and wholesalers.

"Why are these four companies given the privilege to produce local white rice? What about other rice mills and wholesalers? Why are these mills authorised to 'repackage' 5kg or 10kg of rice for direct supply to retailers when that is the job of wholesalers?" he asked.

"If this is the case, the Malay manufacturers and wholesalers will die out."

When questioned by MalaysiaNow, a company authorised to produce local white rice claimed there was an adequate supply of local rice for distribution to retail stores, but that this still needed to be topped up with imported rice. 

A company spokesman said many consumers preferred "soft rice" to local rice.

"But it's a bit expensive," he added.

Local rice meets 65% of the country's demand. The rest is covered by imported rice.

In September last year, Bernas, the only company licensed by the government to import rice, announced a 36% increase in the price of imported rice from RM2,350 per metric tonne to RM3,200.

The move led to panic buying of local rice, which soon "disappeared" from the market. This was compounded by the actions of manufacturers who hoarded domestic rice stocks, forcing people to buy imported rice which allowed sellers to make larger profit margins.

On Oct 9 last year, a rice mill in Kedah was sealed by the authorities on suspicion of hoarding 180 tonnes of local white rice worth an estimated RM405,000.