8/9/2019 Seven Reasons Why Malaysians Struggle to Put Food on the Table

1/5

Seven reasons why Malaysians struggleto put food on the table

By

Anil NettoMARCH 23, 2014

A visit to the local wet market is enough to give you palpitations !rices o" vegeta#lesan$ "ruit have soare$, perhaps #y as much as a thir$ over the last "ew years %ne news

report even sai$ that the price o" kangkung rose in &ecem#er 2013'he higher prices o" #asic "oo$stu"", along with the overall higher cost o" living, is ama(or issue in the )a(ang #y*election +n an mce$el survey, -. per cent o" respon$entsin )a(ang reporte$ly "elt that the increasing cost o" living woul$ raise support "or !akatan Rakyat

'his may #e a "air re"lection o" sentiment across the country an$ coul$ "avour oppositionparties 'he soaring price o" pro$uce, along with higher property an$ motor vehicleprices, has emptie$ the pockets o" low*income an$ even mi$$le*class househol$s +nco""ee*shops an$ private homes, "rien$s an$ relatives hu$$le together an$ grum#le

a#out the latest price increases in the local wet market/oaring "oo$ prices are a symptom o" something $eeper at work an$ signals that all isnot well with the economy, which is also e pose$ to glo#al "orces

'his article will $iscuss some possi#le reasons why people are "eeling #ur$ene$ $espite"airly rosy &! growth "igures

Removal o" su#si$ies

'he removal o" su#si$ies "or oil an$ higher electricity an$ gas tari""s will result in higher costs shipping, lorry transport, re"rigeration etc incurre$ in #ringing "ruit an$vegeta#les to the pu#lic 'hese charges will invaria#ly #e passe$ on #y "oo$ ven$orsan$ suppliers through higher prices

'he removal o" su#si$ies "ollowe$ concerns e presse$ #y an international ratingagencies, which $owngra$e$ Malaysia s cre$it rating "rom sta#le to negative 5itchRatings cite$ concerns over pu#lic "inance as a key issue

8/9/2019 Seven Reasons Why Malaysians Struggle to Put Food on the Table

2/5

6ut instea$ o" cracking $own on waste"ul spen$ing an$ rampant corruption, thegovernment a$opte$ a neoli#eral approach #y slashing su#si$ies 7hile somesu#si$ies like those on petrol may also #ene"it the rich, the government has notinveste$ enough in pu#lic transport across the country to ease the #ur$en o" the lower*income group who will "in$ the higher "uel prices a #ur$en

'he removal o" su#si$ies has ha$ the e""ect o" re$ucing $isposa#le income among theor$inary people, making it more $i""icult "or them to a""or$ higher "oo$ prices

Monopolies an$ cartels

7hen #asic "oo$ supplies such as rice an$ sugar are controlle$ #y well*connecte$monopolies or cartels then the pu#lic is at the mercy o" these companies when pricesare set

5or e ample, the !a$i#eras 8asional 6erha$ 6ernas group o" companies, owne$ #y

/ye$ Mokhtar Al*6ukhary, is involve$ in the procurement an$ processing o" pa$$y alongwith the importation, warehousing, $istri#ution an$ marketing o" rice in Malaysia 'he"irm controls a#out 24 per cent o" the pa$$y market an$ 49 per cent o" local rice$eman$

7ith the removal o" rice su#si$ies in 'hailan$, more 'hai rice coul$ reporte$ly #e ma$eavaila#le on the international market an$ with the increase$ supply in the regionalmarket, the price o" rice imports into Malaysia coul$ "all Concern has #een e presse$that the #ene"it o" this lower*price$ rice coul$ #e reape$ #y 6ernas while the pu#lic an$the 142,000 local rice "armers may not #e any #etter o""

%r take the sugar market, which is controlle$ #y the well*connecte$ Malaysian /ugar Manu"acturing 6h$ an$ 'ra$ewin$s 6h$ %pposition politicians have claime$ that theremoval o" the sugar su#si$y at the last 6u$get woul$ result in higher pro"its o" up to100 per cent

+n a$$ition, M! 'ony !ua claime$ that the government ha$ committe$ to a three*year raw sugar import $eal at /:2- RM;< 94 per 100l#s 49 3kg in =anuary 2012, whenthe glo#al market price "or raw sugar then was at /:23 42 RM;3 9; 6ut #y =anuary2014, the glo#al price ha$ $ippe$ to #elow /:1-

/hrinking agriculture lan$

+ncreasingly, as agricultural lan$ in ur#an centres an$ their "ringes is converte$ to>mi e$ $evelopment , high*rise con$os have sproute$ on "ormer "arm lan$s ?lsewhere,priority has #een given to monocropping an$ cash crops, which can $amage the overallenvironment an$ re$uce #io$iversity

r#an vegeta#le "arms are vanishing as they make way "or high*rise super con$osn"ortunately, we $o not have community organic gar$ens to make up "or the loss o"

8/9/2019 Seven Reasons Why Malaysians Struggle to Put Food on the Table

3/5

local supply 7here once it was common to see #anana trees growing in our neigh#ourhoo$, that is not so anymore @ocal #ananas, which use$ to cost RM3 90 per kg, are now sol$ at RM9

'his means more "oo$ has to #e transporte$ "rom a longer $istance, usually Cameron

Highlan$s or even importe$ +t is not uncommon to see people waiting at a vegeta#lestall "or the lorry "rom Cameron Highlan$s to arrive

As petrol prices inch upwar$s, the cost o" transporting "oo$ "ollows suit, what morewhen "oo$ has to #e transporte$ "rom "arther away, an$ this invaria#ly pushes up theprice o" "oo$

5oo$ imports an$ $epreciation o" the ringgit

+" you visit a stall selling vegeta#les an$ "ruit, chances are hal" the pro$uce is likely to #eimporte$ "rom countries such as the nite$ /tates, China, Australia, 8ew ealan$, +n$ia

an$ /outh A"rica +mporte$ "ruit may even #e $isplaye$ more prominently than their local counterparts in such stalls Moreover, a signi"icant portion o" our rice reBuirementsis also importe$ 7e may #e sel"*su""icient in poultry, eggs an$ "isheries #ut we arealso importing #ee", mutton an$ milk

'his makes us highly $epen$ent on imports "or our "oo$ security 8o won$er our "oo$tra$e $e"icit has soare$ "rom RM1#n in 1..0 to RM13#n in 2013

Along with this e ternal $epen$ency comes vulnera#ility to "luctuations in the e changerate o" the ringgit against the / $ollar %ver the last year, the ringgit has stea$ilyweakene$ against the / $ollar "rom a#out 3 00 last May to a#out 3 30 now 'hat is a

weakening o" a#out 10 per cent an$ it is #oun$ to #e re"lecte$ in the rising price o" importe$ pro$uce

!roperty $evelopment an$ higher #usiness costs

%ver time, as interest rates were kept low an$ as cheap money "loo$e$ this region,speculation in property $evelopment intensi"ie$ as people trie$ to ma imise their returns 'his has $riven up property prices an$ rentals in the country +n turn, the cost o" $oing #usiness has risen

As property prices an$ rentals go up, two things happen

'hese higher #usiness costs have cut into #usiness pro"its, thus putting $ownwar$pressure on workers wages, which in turn re$uces the purchasing power o" or$inarypeople

'hey also translate into higher prices o" "oo$stu"" as "ruit an$ vegeta#le wholesalers an$retailers, who themselves are con"ronte$ with higher property prices an$ rentals, pass

8/9/2019 Seven Reasons Why Malaysians Struggle to Put Food on the Table

4/5

on their costs to customers ?ven the price o" "oo$ an$ $rinks at hawker stalls an$ "oo$courts has escalate$

Case study: Eating out becomes more expensive too

@et s take a look at why eating out is no longer as a""or$a#le as it once was an$ howthis coul$ #e linke$ to higher property prices

As property prices soar, those who have investe$ their "un$s in property e pect higher returns "rom the property they alrea$y have 'hus rentals are increase$ +n one case in!enang, a property owner was sai$ to have aske$ his tenant, a "oo$ court operator, tocough up a whopping -- per cent increase in monthly rental "or the "oo$ court premises'he "oo$ court operator, who ha$ su#*let stalls to a#out two $oDen hawkers, "elt thehigher rental woul$ re$uce his pro"its su#stantially

nwilling to pay such a high rental, the "oo$ court operator $eci$e$ to shut $own the

"oo$ court he was operating an$ move$ out 'he hawkers many o" whom were sellinglow*price$ meals #elow RM9 to stu$ents, near#y resi$ents an$ working a$ults on atight #u$get were relocate$ #y the operator to another "oo$ court he was operating,much "urther away

Meanwhile, the lan$lor$ o" the "oo$ court, now close$ $own, "oun$ a new tenant,#elieve$ to #e an upmarket >kopitiam operator or a car showroom #usiness, willing topay the higher rental

5or the local resi$ents an$ stu$ents, what this means is that a "oo$ court that they ha$patronise$ "or the a""or$a#le meals it o""ere$ has $isappeare$, leaving #ehin$ more

upmarket restaurants an$ kopitiams in their area 'hese eateries charge 90*100 per cent more "or the meals they serve in or$er "or their owners to meet the steeper property loan repayments or rentals arising "rom higher property prices

/tagnant real wages

&espite years o" economic growth as in$icate$ #y positive &! growth "igure, manypeople $o not "eel #etter o""

5or one thing, in many househol$s, real wages have not kept pace with the cost o" livingan$ pro$uctivity increases

'he share o" wages compare$ to the overall income o" the country has "allen 7agesmake up only 2< per cent o" Malaysian &! #ase$ on the income metho$ while#usiness pro"its account "or a whopping -; per cent An$ ;< per cent o" ?!5contri#utors earn less than RM3000 per month

'his suggests that many workers are #eing un$erpai$ relative to pro$uctivity increaseswhile "irms an$ #anks post large pro"its 'his $isconnect is #eing ai$e$ #y the e isting

8/9/2019 Seven Reasons Why Malaysians Struggle to Put Food on the Table

5/5

policy o" using e ploitingE migrant workers to $epress local wages while workers an$tra$e union rights are suppresse$

'his unhappy situation is maske$ #y unrealistic o""icial househol$ poverty line incomelevels o" RM