May 12, 2023

Malaysia's Agriculture Ministry maintains subsidy formula for broiler chicken breeders

Malaysia's Agriculture and Food Security Ministry has announced its decision to maintain the current subsidy distribution formula for broiler chicken breeders and supplier companies, but poultry farmers in Selangor state are expressing discontent and calling for equal subsidies, The Star reported.

Agriculture and Food Security Minister Datuk Seri Mohamad Sabu said they will stick to what was implemented previously for more than a year, which is MYR 0.10 (~US$0.022; MYR 1 = US$0.22) for breeders and MYR 0.70 (~US$0.16) for supplier companies.

The minister said that it is the responsibility of chicken breeders and supplier companies to negotiate amongst themselves regarding the distribution of the MYR 0.80 (~US$0.18) subsidy to offset the rising costs of chicken and egg production. The government will not interfere in the negotiation process for the distribution agreement.

Mohamad Sabu emphasised that the ministry intends to maintain the existing rates, as it is a business-to-business arrangement between integrators and contract farmers.

He mentioned that the government was not involved in their agreements, underscoring the need for negotiations between integrators and farmers to establish fair profit-sharing and subsidy sharing.

The Selangor Poultry Breeders Association has appealed to the government to consider a 50:50 ratio for distributing subsidies to broiler chicken breeders and supplier companies. The association said that certain breeders are being driven out of business due to the mounting operational costs.

Muzamri Shoib, the association's chairman, reiterated the higher risk faced by breeders in the broiler chicken farming sector, as they solely rely on profits from selling live chickens, while supplier companies benefit earlier in the value chain from the sale of chicken feed, chicks, medicines, and ultimately, chicken sales.

The government had previously decided to continue providing subsidies at a rate of MYR 0.80 per kg (~US$0.18) for chicken and MYR 0.08 (~US$0.018) per egg until June 2023, amounting to a cost of MYR 1.28 billion (~US$285 million).

-      The Star