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One of the Malaysian staple foods is rice. We produce about 2.2 million tonnes of ita year. But, our neighbours such as Thailand grow padi more efficiently. Hence, we face the problem of dumping.

Yesterday, the Malay Rice Millers' Association president Saidon Ahmad claimed that wholesalers did not want to buy rice at the usual price of RM1,250 to RM1,300 per tonne because they could get cheaper rice elsewhere. As our neighbours can produce cheaper rice, they can dump it in our market.

It appears that 40 rice-millers in Kedah and Perlis cannot sell their padi,
totaling about 300,000 tonnes. Then, 160,000 padi farmers in Kedah and
Perlis will be affected.

PADI PRODUCTION

Malaysia produces about 2.2 million tonnes of padi a year. Under the Third Agriculture Policy, there is increasing mechanization and consolidation of smallholdings into estates. Nevertheless, the cost of our padi production is higher than that of our neighbours. Hence, they can dump their padi on this country.

By the year 2003/2004, most of our goods will conform with the Common
Effective Preferential Tariff, CEPT, and we shall have Asean Free Trade
Area, AFTA. This is regionalization-a part of globalization.

Is Malaysia ready for AFTA? Are we competitive? Because of our national cars, the Government is dragging its feet on CEPT over cars and their components. At the same time, other sectors such as agriculture may not be able to compete with members of AFTA.

BY 2004/5, if our cars and components do not conform with CEPT, we have to compensate our neighbours. American Ford and General Motors have big investment in Thailand. However we look at it, she has cheaper cars.

Similarly, Thailand is ahead of Malaysia in agriculture including padi
production. Our cost of production is higher and productivity and
competitiveness are lower. For strategic reason, at least 70% of our rice
are produced locally. Even then, as we go regional and global, we have to make our agriculture more productive and competitive. Agriculture is
especially important in the virtual world.

Rice is a controlled item. We have to ensure that Malaysians have cheaper rice. But, the dumping of padi and rice by our neighbours affects our padi and rice industry and our rice market. Therefore, the Government must deal with dumping effectively. It has to improve productivity and competitiveness, making the best of AFTA.

Dr Tan Seng Giaw