Incentives needed to help food security amid rising costs, urge groups
PETALING JAYA: With costs rising for small growers in the wake of the diesel subsidy rationalisation, vegetable farmers have suggested the government reintroduce incentives to boost production and strengthen food security.
The Malaysian Federation of Vegetable Farmers Association has urged the government to reintroduce an incentive of at least RM120 per tonne of vegetables, said its president Lim Ser Kwee.
In a letter to the Finance Ministry, the association said the incentive would ease financial pressures on farmers and ensure the sustainability and growth of the vegetable farming industry.
Although the government has introduced targeted diesel subsidies for commercial vehicles, 90% of agricultural machinery, such as water pumps and soil tillers, were unable to get the necessary vehicle cards to benefit from these subsidies, Lim said.
And while the government has introduced an additional RM200 subsidy for farmers under the Budi Madani scheme, the amount was not sufficient, said Datuk Chai Kok Lim of the Cameron Highlands’ Vegetable Farmers Organisation.
“Farmers typically spend over RM1,000 on diesel each month,” he said.
Additionally, to qualify for Budi Madani, farmers must also have registered companies and an annual turnover of between RM50,000 and RM300,000, but at least 20% of small farmers do not meet these criteria, said Lim.
“Our proposed vegetable production incentives aim to establish a ‘more work, more gain’ concept,” he said.
“Farmers who work hard and produce more vegetables would receive greater subsidies, helping them cope with cost pressures and avoid financial ruin.”
Currently, the association has around 7,000 members nationwide.
However, the number of farmers has been decreasing annually since the Covid-19 pandemic, primarily due to cost pressures and intense competition.
Rising fertiliser costs have forced many small-scale farmers to abandon vegetables in favour of cash crops, raising concerns about increased vegetable imports and potential foreign exchange losses.
“If farmers receive subsidies and have the capital to increase production, our country can achieve self-sufficiency and reduce dependency on imports,” said Lim.
Tan Chee Kiong, a farmer, said he has observed a decline in young people joining the sector due to rising costs, intense land competition, and uncertain national policies.
“The government’s plan to raise the minimum wage will further increase farming costs.
“It takes two foreign workers to cultivate one acre (0.4 ha) of land. With wage increases, the costs to plant an acre – including fertilisers and pesticides and labour – will rise,” he added.
Chai of Cameron Highlands said the idea for an incentive was not new as in 2008, the government had provided RM80 for each tonne of vegetables produced.
“Hard work leads to success, and this approach can increase the nation’s vegetable production income,” he said, adding that the government could create a system to track each farm’s harvests.
Tax expert Datuk Koong Lin Loong supported the idea of giving out incentives based on production yields as opposed to increasing diesel subsidies.
“Targeted diesel subsidies have loopholes. The vegetable farmers’ proposal is worth exploring, but the exact amount of the incentive should be further discussed with farmers,” he said.
Diesel subsidies can be misappropriated such as when farmers use old lorries merely to apply for the subsidy, which could then be smuggled, he added.
“If the diesel subsidy does not genuinely benefit agriculture, the government should review it,” said Koong.
