June 15, 2023

Malaysian poultry subsidy a temporary but necessary measure, says official

The Malaysian Government's decision to extend subsidies for chicken and eggs beyond June 30 is a temporary but necessary measure, said Hassan Abdul Karim, member of Parliament (MP) for Pasir Gudang, The Star reported.

The MP, who is also a member of Malaysia's Domestic Trade, Entrepreneurship, Cost of Living, and Agriculture special select committee, said that continuing the subsidies and controlling the prices of these essential food items is crucial to ensure an adequate supply in the market.

He said that while the subsidies are temporary, they are vital due to the increased production costs resulting from factors such as the COVID-19 pandemic, the Russia-Ukraine conflict, disruptions in the supply chain, and the depreciation of the ringgit.

He said that the government recognises the need to review the situation as the sector recovers, and eventually, the subsidies may be phased out once chicken and egg suppliers can sell their products at reasonable prices while still making profits.

Although ending the subsidies for chicken and eggs could save the government billions of ringgit annually, the timing for such a move is deemed critical and requires careful consideration.

Initially, Malaysia's Agriculture and Food Security Minister Datuk Seri Mohamad Sabu had announced that the prices of eggs and chickens would be floated, and subsidies for poultry producers would cease on June 30. But in response to concerns from consumers about potential increases in household expenditure, the government decided to maintain the ceiling price for these items.

In a joint statement issued on June 9, Malaysia's Agriculture and Food Security Ministry and the Domestic Trade and Cost of Living Ministry confirmed that Prime Minister Datuk Seri Anwar Ibrahim had approved their proposal to continue the subsidies.

As per the current arrangement, the retail ceiling price for standard processed chicken remains at MYR 9.40 (~US$2.03; MYR 1 = US$0.22) per kg, while the prices of grade A, B, and C eggs stand at MYR 0.45 (~US$0.097), MYR 0.43 (~US$0.093), and MYR 0.41 (~US$0.089), respectively.

-      The Star