RECENTLY, Domestic Trade and Cost of Living Minister Datuk Seri Salahuddin Ayub said the government has approved two local sugar-producing companies to produce clear refined white sugar.
The move underscored the government’s struggles to keep prices of the essential item affordable while ensuring sufficient supply.
Malaysia did not always have this problem. Like rubber plantations, sugar cane plantations have over the years made way for more lucrative oil palm plantations and durian farms.
Malaysia’s “Sugar King” Tan Sri Robert Kuok once controlled 10% of the global sugar trade.
Unfortunately, Malaysia has lost its pole position in sugar production to Brazil, India and Thailand. In fact, we are now entirely dependent on imported sugar following the closure of Chuping’s sugar cane plantation in 2012.
Interestingly, Economic Minister Rafizi Ramli last month said that the country’s sugar cane industry will be developed to meet the nation’s demand for sugar.
This statement is fortuitous because quite frankly, the need to revive the country’s ailing sugar industry to meet the ongoing domestic market demand for sugar—with the recent issue that sugar supply is not sufficient in certain states in Malaysia—is evident.
But how can we talk about developing the sugar cane industry when our own sugar refineries are suffering?
Local refineries are in danger of shuttering due to the fact that the price of sugar is controlled at RM2.85/kg, a price that has remained unchanged since 2013 despite rising input costs.
Furthermore, at RM2.85/kg—the lowest in the region—the illegal smuggling of sugar across Malaysian land borders is commonplace. This has resulted in the reduction of our own citizens’ supply.
It should also be noted that Malaysia imported US$674 mil worth of raw sugar in 2021, ie the 11th largest importer of raw sugar in the world, primarily from Brazil (US$433 mil), India (US$135 mil), Thailand (US$66.9 mil), South Africa (US$13.6 mil) and Australia (US$8.46 mil).
A Straits Times article dated May 16, 2023 warned that the global sugar price is expected to soar further due to a decline in production in India and export restrictions imposed by the Indian government. Our country’s sugar supply will be impacted by the Indian sugar supply.
It is imperative that we address this supply issue as sugar is linked to food security and is a much-needed component in food manufacturing.
Furthermore, it is unrealistic to expect that Malaysian prices will remain the same as they were a decade ago when there has been a steady increase in world sugar prices, driven by the global demand for sugar.
Separately, Malaysia did not face any rice supply disruptions during the COVID-19 lockdowns because we had a national rice stockpile.
At the same time, we only grow about 70% of the rice we need and there’s always concern that there will not be enough labour to keep even this rate up, especially with the younger generation seemingly not keen on or not being able to work in the agricultural industry.
The current unity government must be able to strike the right balance between agriculture and industry as the twin engines of Malaysia’s economic development. Both are crucial.
During the 1980s and 1990s, the trend was to abandon farming for manufacturing. But it is shortsighted to see the two as in competition with each other. Indeed, there are many synergies between the two.
The advent of technology with the use of the Internet of Things and Industrial Revolution 4.0 could transform our country’s agricultural sector by bringing smart and sustainable farming within the grasp of even smallholders or independent farmers.
This would enable such farmers to manage agriculture and livestock with more control and accuracy while ensuring farm resilience.
Also, used correctly, technology will likewise help reduce the labour intensity of agriculture across the board and hence our need to bring in foreign labour or the continued angst over trying to persuade Malaysians to work on plantations.
Additionally, revving up agriculture will contribute to Malaysia’s quest for biofuels. If we could just achieve it, it would make the energy we consume, including for manufacturing, “greener” and less harmful to the environment in the long run.
A stronger, smarter approach to agriculture will also help Malaysia punch above its weight in the food and beverage (F&B) industry such as through sugar manufacturing, animal husbandry, halal meat products, fruit and vegetable processing, oil and fat manufacturing and seafood processing.
State governments will also be able to generate income and jobs via the development of unutilised land for agriculture.
Therefore, Malaysia must continue to develop its agricultural sector. An immediate priority should be food crops to reduce our reliance on imports.
We must also be willing to break with the orthodoxies of the past. Existing policies,
including price ceilings for certain foodstuffs, need to be examined—just as the government is pledging to look at all monopolies—and if found to be standing in the way of what the rakyat need, discarded.
They were perhaps appropriate when they were introduced, but the reality facing Malaysia now—of fierce competition for resources—is very different.
Malaysia needs political will and smart policies to revive its former agricultural glories. It can be done if our leaders and people put their minds to it. – May 28, 2023
