PKR's Latheefa on World Food Day served a rightful notice telling the government the need to priortize food security.
I have always wondered aloud why purchase power parity and quality of living in Malaysia is inferior to developed nations. Sure, corruption plays a part but what about the structure of our supply chain? Should BN administration not look at this when they do that Economic TRANSFORMATION thingy?
If the supply chain is too long, there are more middle men and the end consumers have to pay more.
My Japanese friend told me that the sushi here is nowhere as good as the Japanese ones because of the inferior rice here; and from personal experience, I do find the rice in Hong Kong is of superior quality.
Since almost all Malaysians have rice as their staple diet, I decided to look into its supply chain, which takes me to Padiberas Nasional Berhad ("Bernas")
Source: Padiberas Nasional Berhad, Annual Accounts and Reports 2009.
It certainly has a big role to play in the food security of Malaysians whereby it is in charge of subsidies, stockpile, retailing, procurement, manufacturing and everything else relating to rice, bar cooking it.
According to its Chairman's speech in the 2009 annual accounts and reports, Dato’ Wira Syed Abdul Jabbar Bin Syed Hassan stated,
"At the outset, I must say that we have discharged our responsibilities well to the extent that at the height of the crisis, BERNAS practically had to forego its profit objective for national interest; in fact we posted a record loss in 2008. After the dust has settled, what is clear is this - we had done our job well."
hmmm....Dato Wira admitted that BERNAS, a company where Minister of Finance holds 1 Special Share with veto power and a monopoly of staple diet of Malaysians, are in for PROFIT.
Oh yes the sacrifice of 2008 was celebrated, but take a look at his next statement a few paragraphs later.
I am also pleased to report that profit, revenue and volume of rice sold recorded in 2009 were the highest since BERNAS’ privatisation.
Talk about coming back with a vengeance. Is this privatisation necessary? Why Malaysians have to pay additional middleman profits? Can't the well remunerated Barisan Nasional Federal Government with more than 50 years track record operate rice system without this middleman at Malaysians' expense?
Bernas' reported that revenue (read: amount paid to additional middleman) increased from RM2.2 bil in 2005 to RM2.5 bil and RM3.3 bil in 2008 and 2009 respectively; while the profits for 2005 till 2009 are as follows:
2005 + RM131mil
2006 + RM135 mil
2007 + RM107 mil
2008 - RM57 mil
2009 + RM180 mil
So Bernas "claw back" its "losses" of 2008 immediately. The profits above is actually additional cost to Malaysians, probably a hidden form of taxation.
The RM3.3 bil works out to be RM120.74 per person over total population of 27 million so if papa works to support a family of 5, that's RM603 per year for him. Additional RM50 on your food bill a month, please, thank you very much.
The amount looks bearable (for some) until you read note 31 to the accounts "Paddy Price Subsidy Account" which states that pursuant to the Corporatization Agreement of 1996, the government shall pay rice subsidies into banking institutions and Bernas is suppose to disburse the subsidies.
The audited accounts specifically mentioned that the above account is not part of Bernas assets and liabilities, hence an off balance sheet finance.
In 2009, RM600 million subsidies were disbursed from opening balance of RM75mil plus 2009 subsidy funding of RM599 million.
So why Malaysians are paying for their rice twice? Do we have to do that? What Bernas can do that the MOF can't do?
Being a "corporate body", despite having the status of a virtue monopoly of an essential good with no threat of substitute good or competitor, Bernas have to get a bank loan and Malaysians serviced bank interest amounting to RM24 million annually for 2009 and 2008.
And being a "corporate body" it has to pay dividends. Dividend per shares was 8 sen per share for 2005; increasing steadily to 20 sens per share for 2009. The 2009 accounts show dividend payout of RM84,672,000 was made for 2009 financials.
Would this money be better spent in channelling it to R & D to achieve better quality and rice yield, or like Singapore's NTUC, be given back as a rebate to Malaysians?
Who are the major shareholders who benefited from the payout? A review of its 2008 annual report shows that, Budaya Generasi (M) Sdn Bhd held 145 mil shares or 30.79%, Serba Etika Sdn Bhd held 29.8 million shares or 6.39%. I do not know these people who I have to belanja every time I eat white rice, fried rice, nasi lemak, nasi dagang, nasi kandang, pulut etc
To add salt on injury, according to note 23 of its 2009 annual accounts, Tradewinds (M) Berhad has acquired Bernas in 1st quarter of 2010, holding 72.57% or 341 million shares whereby Tradewinds raised a term loan of RM1 billion bearing interest at 5.2% to 6.5% hence another layer of debts for Malaysians to grapple with.
So immediate windfall to the previous shareholders, financed by all Malaysian rice eaters.
Sigh, the bowl of rice I have is getting harder to chew on from now on.