Launch of 'The Paddy and Rice Industry of Sabah and Sarawak: Status and Potential' Publication

On 31 January 2023, KRI hosted a launch event to present the key findings of the report “The Paddy and Rice Industry of Sabah and Sarawak: Status and Potential”. This launch highlighted the multidisciplinary nature of the report, which encompasses food security, anthropology, plant science and regulatory subject areas. The objective of this work is to emphasise the significance of the specialty/heirloom rice segment to the nation’s paddy and rice industry.

The launch outlines several policy recommendations to encourage a business-enabling environment. A special address was given by Tan Sri Nor Mohamed Yakcop, Chairman of KRI. The presenters were the authors of the report, Dr Sarena Che Omar, Khoo Wei Yang, and Nik Syafiah Anis from KRI as well as guest author from Universiti Malaysia Sabah, Dr Januarius Gobilik. This was followed by a Q&A session.

As part of an initiative to promote specialty rice, the launch event also featured booth participation of three companies, Balau Agrotech, Langit Collective, and Antares Ventures (Kenyalang).

Current State of Malaysia’s Paddy and Rice Industry

The paddy and rice industry in Malaysia is concentrated in the Peninsula, where more than 90% of the cultivation takes place. The rice cultivated in this region is mainly the cheaper, high-yielding medium grain rice which is mainly to safeguard the country’s food security. It is produced in high volumes and subject to a controlled price ceiling. This segment is currently valued at RM3.3b. Conversely, in East Malaysia, lies the bulk of the specialty/heirloom segment. This region boasts over 500 distinct rice varieties, each with unique characteristics. Although cultivated in lower volumes, these premium rice varieties command a competitive price point and may potentially be valued at RM3.1b.

Some of the limitations of the specialty/heirloom rice segment are the lack of formal variety nomenclature and seed preservation system. The seeds that are not formally collected and characterised, facing the risk of losing its genetic purity due to on-field cross-pollinations. Another limitation is the protective measure of Act 522 which is good to safeguard the supply of rice (cheaper medium-grained rice) but may not necessarily be good for competition, commercialisation, and export growth (specialty/heirloom rice).

Ways of Moving Forward for the Industry

To recognise the paddy and rice industry as a dual-industry, urgent measures are needed to characterise and recognise rice varieties at the state and the federal level. Once that is done, four policy considerations are presented for Malaysia’s specialty rice industry, namely:

-Allow the export of licensed specialty rice without needing special permissions from the Director General;

- Allow the default transportation of specialty rice across states;

- Remove/review input subsidies for specialty rice growers meant for export; and

- Lowering the required working capital for micro and small enterprises for the relevant licenses.
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