October 9, 2023

 

Malaysia urged by poultry industry players to continue providing subsidies

 

Chicken breeders and egg producers in Malaysia are calling for the government to continue providing subsidies to stabilise the supply and price of the essential items.

 

They pointed out removing the subsidies now would have a detrimental impact on the chicken supply chain, as many breeders will have to slash their production to mitigate high operating costs.

 

Kedah Chicken Breeders Association secretary P. Ravintharan also cautioned the government on the grave risk of relying on imports, citing the crisis of locally produced white rice shortage as an example.

 

"If the government decides to rescind the subsidies now, it will adversely affect the country's poultry food security in the long run," Ravintharan said. "Inevitably, we will be facing another round of a supply shortage crisis of chicken and egg if the exporting countries decide to halt or slash their supplies.

 

"We must learn the lessons from the current shortage of local white rice supply when the price shoots up following the exporting countries' move to limit their export."

 

Ravintharan was commenting on Agriculture and Food Security Minister Datuk Seri Mohammad Sabu's statement that the government would announce the outcome of its review on chicken and egg subsidies, as well as its price control soon. Mohamad was reported as saying that the review was based on the fact that the supplies have stabilised and the prices have been lower than the set ceiling prices.

 

The government had initially planned to float prices of chicken and egg from July 1 but decided that it would continue giving subsidies and imposing ceiling prices on them.

 

Had the government proceeded with the plan to revoke the subsidies in July, industry players predicted that the retail price for processed chicken would have hit over RM11 (US$2.32) per kilogramme.

 

Early this year, Mohamad was reportedly revealed that Putrajaya had spent RM1.8 million (US$380.4 million) on chicken and egg subsidies. The scheme was rolled out by the previous administration in February 2022 to mitigate the impact of spiralling prices of imported livestock feeds.

 

Chicken feed costs make about 70% of the total fixed overhead costs for breeders.

 

Ravintharan added that removing the subsidies would also have an immediate impact on the domestic chicken and egg production. He explained that the fixed overhead costs for small and medium sized breeders have been steadily increasing since the COVID-19 pandemic outbreak three years ago.

 

"Overall, our fixed overhead costs of livestock feeds, workers salary, electricity bills and so on have increased by some 20% this year as compared to last year," he said.

 

Additionally, once integrators cease to receive subsidies from the government, "there is a possibility that they would reduce the current six production cycles annually to just four or five cycles," Ravintharan pointed out.

 

"The breeders will also be forced to reduce the quality of feed to their livestock to reduce operating costs," he added.

 

In order to achieve sustainable food security for chicken and egg, Ravintharan said the government should consider providing targeted subsidies to the industry players, in particular the small and medium-sized enterprises.

 

"The government should consider rolling out targeted subsidies such as the inputs and equipment to help the breeders to stay afloat," he said.

 

Bismi Empire Sdn Bhd (Ayam Bismi) managing director Mazlina Kamarudin agreed that the government should consider providing targeted subsidies to breeders.

 

"The cost of livestock feed and chicks are still at an all time high," Kamarudin said. "It would be reasonable for the government to consider intervention measures by focusing on subsidies for retail market production.

 

"The government's strategy on imposing a ceiling price of off-loading the price will have a direct impact on breeders. It should not be done in haste.

 

"We will be on the losing side if the government decides to withdraw the subsidies now especially with the influx of imported chicken."

 

Mazlina added that local breeders would appreciate a clearer direction by the government on food security, concerning the livestock sector.

 

- New Straits Times