Experts: Chicken subsidy waiver a good thing, may create more jobs, strengthen ringgit

Experts: Chicken subsidy waiver a good thing, may create more jobs, strengthen ringgit



Consumers and businesses may be incentivised to buy locally produced chicken if local producers could set prices at a level that makes their products more competitive with imported poultry, according to an analyst. — Picture by Shafwan Zaidon

Saturday, 21 Oct 2023 7:00 AM MYT


KUALA LUMPUR, Oct 21 — The removal of chicken subsidies, as announced in Budget 2024 may ensure a more competitive market, which in turn could generate more jobs for Malaysians, experts said.

The removal of price controls could lead to competition among local producers, creating expansion in the poultry industry, agricultural economics professor at Universiti Utara Malaysia (UUM) Shri Dewi Applanaidu told Malay Mail when contacted.


“This expansion may lead to an increase in job opportunities within the sector, including jobs in farming, processing, transportation, and distribution.

“This expansion can create jobs not only within the primary production sector, such as raising and processing chickens, but also in related industries.


“This includes jobs in feed production, veterinary services, equipment manufacturing, and logistics,” she said.


If the removal of price controls could help poultry farmers command higher prices, they would also reap the benefits of higher incomes which would enable them to enjoy better livelihoods and lead to increased spending in the local economy, she added.

Consumers and businesses may be incentivised to buy locally produced chicken if local producers could set prices at a level that makes their products more competitive with imported poultry, she explained.

However, she cautioned that consumers may continue to opt for imported chicken if it was still economically viable.

“It is not a guarantee that the removal of price controls for chicken in Malaysia may potentially lead to a reduction in the country’s reliance on imported poultry meat,” she said.

Similarly, food security chair at the laboratory of agricultural and food policy studies at the institute of tropical agriculture and food security in Universiti Putra Malaysia (UPM) Fatimah Mohamed Arshad said that it was important to support micro, small and medium enterprises (MSME) to ensure the creation of more jobs.

“If the industry is highly concentrated, say, with only a few players and each has a large share of the market, they tend to be capital intensive so fewer workers are needed.

“But if there are many MSMEs, then more workers are needed, and it is equitable.

“That’s why it is better to help the start-ups and MSMEs rather than feeding the fat government-linked companies (GLCs),” she commented.

Malaysia will have to do more research and development on chicken feed to reduce its dependence on imports, especially when it comes to developing higher yielding corn, better formula for palm kernel cake and other alternatives, she added.

“Without cheaper feedstock, Malaysia may lose its competitive advantage,” she said.

The increase in efficiency or productivity will help the country increase its exports, she explained.

Likewise, Federation of Livestock Farmers’ Associations of Malaysia (FLFAM) adviser Datuk Jeffrey Ng Choon Ngee commented that the removal of price controls would attract investors.

An increase in investments will also ensure the generation of more job opportunities for Malaysians throughout the entire supply chain, he said.

“This also will help to expand or increase the supporting industry for both upstream and downstream,” he explained.

Beyond its benefits to the poultry industry, Ng said that the removal of subsidies for chickens will channel funds towards those who can be helped better with targeted support.

“As for importation we hope we can produce enough safe and affordable foods for our people and reduce the deficit in our country’s food bills.

“This situation will help to strengthen our currency,” he added.

On Thursday, national news agency Bernama reported Agriculture and Food Security Minister Datuk Seri Mohamad Sabu as saying that the date for the prices of chickens and eggs to be floated will be announced on October 30.

Last Friday, during his Budget 2024 speech, Prime Minister Datuk Seri Anwar Ibrahim announced that the temporary ceiling price imposed for chickens and eggs will be waived to allow room for the market to freely manoeuvre in ensuring uninterrupted supply.

Anwar, who is also the finance minister, said the present trend revealed that the supply of eggs and chicken has stabilised and the present retail price is far below the controlled ceiling price.

Anwar said with the rationalisation of targeted subsidies set to be implemented next year, savings from the rationalisation exercise will be channelled directly to increase allocations of cash aids under the Rahmah Cash Aid initiative.