A group of rice millers have called on the Malaysia Competition Commission (MyCC) to take action against cartels in the rice industry, following the recent action against chicken feed price fixing. The Bumiputera Small Millers Association (PPBMM) and the Malay Economic Action Council (MTEM) stated that monopolies in the rice industry were exacerbating supply issues.
MTEM senior fellow Ahmad Yazid Othman expressed the need for MyCC to crack down on cartels that have deliberately created rules to exclude small players in the rice industry, which have been concealed by the Control of Padi and Rice Act 1994 (Act 522). He made this statement on Wednesday (Jan 10) in response to MyCC’s recent action of fining five companies RM415mil for forming a cartel to fix the price of chicken feed.
Given that there are only 10 Malay-operated rice mills remaining in Malaysia, with the numbers decreasing, Ahmad Yazid questioned whether the government was protecting large producers who have been seen monopolising the supply of rice nationwide. Furthermore, he highlighted the lack of enforcement through rice mill licenses to regulate and harmonise the local rice market, stating that this would reinforce rice cartel monopolies and further control the national rice industry
According to Ahmad Yazid, the difficulties facing people in obtaining supplies of local white rice provides evidence of the control these cartels have over the rice market in the country. He expressed sadness at how Malaysians have been affected by the current rice prices, and called for the government’s attention to the extremely low participation of Malay wholesalers in rice mills, with less than 10% of them being active.
The main reason behind the low participation of Malay wholesalers, according to Ahmad Yazid, is the difficulty in obtaining local and imported rice supplies. Even though the ministry intervened by telling padi millers and rice wholesalers to increase the rice production quota by 20% following a sudden increase in rice prices from the middle of last year, rice mills are reluctant to sell rice to Malay wholesalers.
After the privatisation of the National Padi and Rice Board (LPN), which was replaced by Padiberas Nasional Berhad (Bernas), there has been no room for the Malay mills in the national rice industry, as well as programmes and incentives. Furthermore, all of these issues have been neglected by the ministry.
Last Dec 22, MyCC announced that five companies were fined a total of RM415mil for forming a cartel to fix the price of chicken feed. The fines ranged from RM70mil to RM157mil, and the companies involved were Dindings Poultry Development Centre Sdn Bhd, FFM Berhad, Gold Coin Feedmills (Malaysia) Sdn Bhd, Leong Hup Feedmill Malaysia Sdn Bhd and PK Agro-Industrial Products (M) Sdn Bhd.
