Poultry farmer fear bankruptcy over cabinet's unclear decision yesterday

The cabinet via statement from the Minister of Agriculture and Food Industries (MAFI) reiterated chicken prices will not be floated and government will continue to subsidise in order to maintain  maximum ceiling price for chicken at RM9.40 per kilo.  

One Facebooker saw from the 4th para onward, the statement is repeating itself like a political propaganda to go on chest thumping mode and gloating over the willingness of government to continue to subsidise chicken prices. 

Presuming it was not written by the Minister, the writer failed to appreciate that it is of no public relation value and sheer irrelevant. To the industry players, bankers, policy makers, enforcement personnel, investors, etc, their interest is more on how the subsidy mechanism works? 

Farmers concern

In the not too distant past, government failed to timely process and disburse the subsidy due for chicken farmers as announced in January. It made poultry farmers restless. 

The Vibe reported: 

Waiting game for poultry farmers as govt yet to reveal subsidy rates

Cabinet’s decision, which also opts not to float prices of chicken, takes effect tomorrow

Published on 30 Jun 2022 10:15AM

KUALA LUMPUR – The cabinet’s decision to continue the present subsidies for standard chicken yesterday, received various reactions from poultry associations despite the rise in retail ceiling prices from RM8.90/kg to RM9.40.

The decision, which comes into effect tomorrow, also saw the government deciding not to float the prices of chicken.

Federation of Livestock Farmers’ Associations of Malaysia (FLFAM) adviser Datuk Jeffery Ng Choon Ngee said the newly announced prices will not adversely affect poultry farmers as it is the price that is being sold to consumers at present.

However, he reiterated that the association is waiting for the subsidy rates proposed by the government through the Agriculture and Food Industries Ministry (Mafi) following the announcement.

“So far, we still do not know the form of subsidy that will be submitted by the government and what the mechanism will be, but FLFAM has no issue on the matter (announcement),” he told The Vibes’ sister portal Getaran.

He said the retail ceiling price and the farm ceiling price were two different things and the subsidy provided by the government would determine the cost borne by the farmers.

“Therefore, we will hold discussions with the government through Mafi, to determine the appropriate farm ceiling price and subsidy in the next one or two days,” he said.

In contrast to FLFAM’s views, Selangor State Poultry Breeders chairman, Idrus Zainal Abidin said, the ceiling price announced by the government will cause more poultry farmers to go bankrupt.

The situation, he said, could result in a shortage of chicken supply within the market in the near future.

“I would prefer if the price of chicken is floated because it will create healthy competition in the open market, thus being able to lower and stabilise the price of chicken.

“If there is a shortage of chicken supply this time, I expect it will continue for the long term,” he said.

According to him, to date, as many as three farmers under his association have had to quit as they were unable to continue their business, due to lesser profits earned following the government’s setting of low ceiling prices.

“If the government sets the ceiling price at RM10/kg, we can still make a profit even if it is not much.

“However, with this new rate, the profit margin is greatly reduced and will cause many farmers, especially small ones, to have trouble making capital rounds,” he said.

Malaysians will pay more for standard chicken as the government has set the new ceiling price at RM9.40/kg for Peninsular Malaysia, up from the current RM8.90, while maintaining the subsidy programme.

The cabinet also decided to set new ceiling prices for chicken eggs in Peninsular Malaysia – an increase of 2 sen for three categories – at 45 sen each for grade A, 43 sen for grade B and 41 sen for grade C.

Both sets of ceiling prices will be effective from July 1 onwards.

According to Agriculture and Food Industries Minister Datuk Seri Ronald Kiandee, the rising prices for food items is not just exclusive to Malaysia but is a global phenomenon resulting from geopolitical conflicts and climate change. – The Vibes, June 30, 2022

That is the fear of breeders and chicken farmers. Since it is a Malay expressing concern, please not label them as cartel. Cabinet failed to be clear on the ex-farm price.  

Policy concern

For policy watchers, it is not allaying concern on the state of the econommy. 

The question is if cost goes up, is the subsidy program sustainable with Tengku Zafrul already quoted the figure of RM80 billion for 2022 subsidy spending? Will government be able to defend the maximum price ceiling from busting through the roof? 

It does not exude confidence when the Deputy Minister for Consumer Affairs, Rosol Wahid was reported saying it is acceptable for retailers to charge for processing. It ran counter to the policy to control inflation from spiraling out of hand beyond consumer's affordability. 

Thus, why the need to have a maximum price ceiling in the first place and allow surcharges?   

Jihad team?

The Prime Minister also announced members of the Special Team for the Spiritual Struggle to Combat Inflation.  

Why do government need a Special Spiritual Struggle team when there is already the Council for National Recovery led by Tan Sri Muhyiddin Yasin, who as then Prime Minister formed a special task committee headed by Azmin Ali on food security? 

Why is Minister of Communication and Multimedia taking the lead for this task? Is inflation merely a perception and better public relation and communication will allay inflation expectation? 

Is Mustapha Mohamed still relevant when he is more concerned to recommend a certain agency to supply foreign workers than addressing the chaotic and unplanned state of the economy upon him being brought back to cabinet and EPU by Muhyiddin? 

More so he is more concerned with the expose Zahid Hamidi made in court over him swindling UMNO's party fund in the same manner Syed Saddiq is facing trial.  

It is unclear whether Tengku Zafrul could appreciate housewives at the daily wet market counting the money in their wallet to see whether it is enough to buy the required food items.  

He does not seem to sufficiently understand the subsidy bill when he kept mentioning of fuel subsidy. There is no such item in the national account statement since fuel cost are calculated based on cost plus. Perhaps he should look into raising energy cost to industry and bring down the retail energy cost to industry level.   

He was caught lying on budget revenue projection, announced budgetted spending for programs. power for Bank moratorium, withdrawal of EPF savings, etc that it is questionable whether he understand economic management. 

Alexander Linggi Nanta failed his fellow Sarawakian to address the supply of eggs in his home state. 

For a long time, Sarawakian have been highlighting that the adopted grandson of the late Sarawak stateman, Temenggung Jugah exemplify the failure of political appointment based on quota and seniority over capability. 

Hopefully it is not a Pasukan Khas Faraid Hasil Inflasi. For all likelihood, the unclear policy will only see the Spritual Struggle Team to struggle in their first test on Hari Raya Haji, but mainstream media will be forced to paint a false and rosy picture.