DAP calls on Government to launch dynamic programme to reduce cost of production of rice so that padi farmers can increase their incomes and consumers get cheaper rice
This Bill seeks to amend the Muda Agricultural Development Authority Act 1972 to include a representative of the Lembaga Padi dan Beras Negara as a member of the Muda Agricultural Development Authority.
Malaysia has transformed herself from a rice-deficit country into near rice self-sufficient country. For this fact, the government has never ceased to boast of its achievements.
However, though it is an impressive technical achievement for a rice-deficit country to produce nearly all its rice requirements all home, it is an open question as to whether it is economically worthwhile.
We have heard Ministers stating that a rice self-sufficiency programme will save Malaysia in foreign exchange required for importing rice. There was, however, been little systematic attempt on the part of the government and the economic planners to estimate the real costs and benefits of a national self-sufficiency programme in rice production in Malaysia.
It is dubious whether Malaysia will save in foreign exchange from such a self-sufficiency programme. There may be a net gain or a net loss of foreign exchange depending on the economic efficiency of the programme. Thus if the resources now used in the self-sufficiency programme would have earned a greater amount of foreign exchange in export production of other commodities than the foreign exchange bill they have saved on rice, then the rice self-sufficiency programme has resulted in a net loss of foreign exchange. My view is that on the whole, Malaysian rice self-sufficiency programme has resulted in a net loss of foreign exchange, and not a saving.
I know that there may be non-economic reasons for wanting to be self-sufficiency or nearly self-sufficient in rice. However, we should not delude ourselves that we are saving foreign exchange by this programme. Even more important, we should know the actual costs of such a programme.
In fact, it is the conclusion of a recent study by the Asian Development Bank that Malaysia appeared to be going against the grain of her most advantageous pattern of economic development by trying to achieve self-sufficiency in rice as the scarce capital, technical and managerial resources she has diverted into production may well be missing highly productive opportunities in other uses.
If it is the national rice policy of the government to be self-sufficient, not for economic reasons but other considerations, the padi farmers must not be made victims and condemned to low incomes and low standards of living.
New agricultural technology today offers not only the physical possibility of self-sufficiency but also the economic opportunity of lowering the cost of production of rice and other agricultural products.
Malaysia, however, seems to have concentrated solely on the formers to the utter neglect of the latter.
While we appreciate the need to give protection and subsidies to our domestic rice producers, the government should not make the grave mistake of total concentration in rice self-sufficiency in utter disregard of lowering costs of rice production.
New agricultural technology, or what is now popularly termed as the Green Revolution, permits very high physical yields per acre. However, they require very high overhead costs such as massive irrigation complexes like the Muda Irrigation Works.
To economically justify such high capital costs, and to increase the incomes of the padi-farmers, it is clear that there should be a more intensive use of land and crop diversification, such as the development not merely of double-cropping, but multiple cropping on a diversified range of products.
If this is carried out, we will achieve on the one hand the reduction in the cost of production of rice, and on the other hand, the increase in the incomes of the farmers through the development of multiple cropping on their land of padi and other crops.
This will not only benefit the padi farmers themselves, but also the consumers, who will be able to get cheaper rice, from the reduced cost of rice production.
Rice forms the major part of the budget of Malaysians. A reduction in the price of rice is therefore equivalent to a substantial enlargement of their purchasing power for other produce, such as manufactured goods and other agricultural products, especially meat, vegetables and dairy products. In addition to rice, they will need vast quantities of protein food in order to be adequately fed. This can create a large expansion in the market for the farmers again.
A cheap food policy will also lead to a healthier working population with higher labour productivity and, together with lower labour cost based on a cheaper cost of living, give Malaysia a more competitive advantage whether in expending the exports of primary products or in the expansion of labour-intensive type of manufactured exports.
The DAP therefore calls on the Government to formulate and implement a policy whereby padi farmers will be able to increase their incomes through multiple cropping of diversified products on their land, and which will lead to the lowering in the cost of production for rice enabling cheaper rice and lower cost of living in the country.
Widening of the gap between the have and have-nots in rural areas
The Government is spending hundreds of millions of dollars on the Muda Irrigation project and others in order to increase the incomes from this sector.
There are sufficient indications to show, however, that the massive infusion of public funds and capital into the rice-growing sector have widened rather than narrowed the gap between on the one hand, the bigger and the smaller farmers; and also between the absentee landlords and the tenant-cultivators.
It is clearly against the national interest and the declared objective of the Second Malaysia Plan to eliminate poverty that the increases in rice productivity and incomes resulting from massive public expenditures should accrue to absentee landlords and the bigger farmers to the detriment of the smaller farmers and tenant-cultivators.
There is a very strong case for basic structural changes in our agrarian economy and basic land reforms if the increased incomes from higher productivities are not to enrich the wealthy landlords, but to uplift the downtrodden poor in the padi fields.
The 1960 Census of Agriculture undertaken by the Ministry of Agriculture and Co-operatives found that 78 percent of the padi farms in West Malaysia were less than five acres in size, and more than 50 per cent of them less than three acres. Further fragmentation into smaller and more uneconomical lots, varying from ΒΌ acres to two acres, must have proceeded apace since then, as poverty and indebtedness breed further poverty and greater indebtedness.
In fact, because of subdivision and fragmentation, farm size especially those of the rice sector, gets smaller and smaller rather then bigger and more economic over time.
Apart from the uneconomic size of rice farms, the other root problem of poverty of padi farmers is absentee landlordism, or the non-ownership of the land cultivated by the farmers. Looking at the Census of Agriculture, it is revealed that for Western Malaysia for all farms, 78% are owner-cultivated. However, only 20% of all such farms in Western Malaysia were found in the rice sector. Of all the rented farms in Western Malaysia, 93% were in the rice sector.
I believe that if the Ministry of Agriculture should update its Agricultural Census, it would have found that since 1960, a high percentage of the owner-operators had been dispossessed of their land, having been forced to surrender them because of poverty.
It is vital that if the benefits which the government expenditures in agriculture are to help the farmers in the padi sector, basic land reforms should be carried out. I call on the government to abolish landlordism in the rice farming sector. Landlord should be allowed to retain maximum acreage for self-cultivation, the size to be determined after survey of the size of operational holdings. The government should buy up the rest of the padi farms, pay compensation to the absentee landlords and resell them to the present tenant-cultivators, who can pay back the government in ten, fifteen or twenty years.
The abolition of padi landlords will release the padi farmers from exploitation and give them a stake to put more effort into their farms to achieve higher productivity and incomes. The ground will then be set for the organization of the owner-cultivators to co- operate in their farming activities and make use of the new agricultural technology, not only to increase productivity, but also to cut the cost of production.
Before I conclude, I would urge the Minister of Agriculture to immediately commission a new Census of Agriculture. It is an indication of the lop-sided sense of priorities of the government that it should allow more than a decade to pass without an agricultural census to be taken to ascertain about the livelihood and conditions of living of Malaysian farmers, who comprise the majority of the people in Malaysia. It is necessary to have the latest figure about Malaysian agricultural life and conditions before economic planners and government leaders can choose policies and programme.
Speech by DAP Secretary-General and Member of Parliament for Bandar Melaka, Mr. Lim Kit Siang, in the Dewan Rakyat on the Muda Agricultural Development Authority (Amendment) Bill 1972 on Friday 11th August 1972.