Part of the reason is the unprecedented high crude oil price. Other reason includes abnormal weather trend and raising demand for food, especially from China
High food prices has resulted riots in Algeria and abrupt and continuous increase in retail prices was the catalyst for the 1997 riot and mass murder in Indonesia.
Managing cost of living, and food price in particular, is critical for social order, much more than manufactured inter-racial differences.
However, a more sinister and largely unpublished reason for food price increase is food speculation. This article reveals something that made my stomach turned.
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For over a century, farmers in wealthy countries have been able to engage in a process where they protect themselves against risk. Farmer Giles can agree in January to sell his crop to a trader in August at a fixed price. If he has a great summer, he'll lose some cash, but if there's a lousy summer or the global price collapses, he'll do well from the deal. When this process was tightly regulated and only companies with a direct interest in the field could get involved, it worked.
Then, through the 1990s, Goldman Sachs and others lobbied hard and the regulations were abolished. Suddenly, these contracts were turned into "derivatives" that could be bought and sold among traders who had nothing to do with agriculture. A market in "food speculation" was born.
..........
So it has come to this. The world's wealthiest speculators set up a casino where the chips were the stomachs of hundreds of millions of innocent people. They gambled on increasing starvation, and won. Their Wasteland moment created a real wasteland. What does it say about our political and economic system that we can so casually inflict so much pain?
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The world is a big place and Malaysia is also subject to the turbulence the speculators inflicted on the global population.
But, have our democratically elected leaders did all that is within their power to protect Malaysians from higher food prices?
In 2008, 50 of our members of parliament was taken to Taiwan for agriculture studies and yet the food price Malaysians have to grapple with seems to be a heavier than ever burden.
The answer to Teo Nie Ching's question on our behalf, in 2009, went unaccounted for:-
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http://www.wretch.cc/blog/teonieching/21085796
13. Puan Teo Nie Ching [Serdang] minta Perdana Menteri menyatakan manfaat yang diperolehi dan direalisasikan oleh rombongan back-bencher BN yang telah mengunjungi Taiwan untuk mempelajari teknologi dan teknik pertanian tahun lalu supaya terdapat pulangan berpatutan daripada perbelanjaan wang rakyat yang mendadak itu.
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Utusan Malaysia should stop focusing on what decent clothes she wears because YB Teo is much much more than that.
Securing food source for Malaysians do not require politicalising the livelihood of pig farmers and food source of non-muslims. If some quarters do feel strongly against pig farming and incapable of seeing this as a practical issue as it really is, spare a thought for our Hindu friends who have to put up with beef rendang servings in 5 star hotels, Big Mac dealing shopping malls, drive throughs and corner shops which are certainly more ubiquitous and obvious that some remote pig farms.
Making food prices reasonable does not require excessive level in supply chain. Padiberas Nasional Berhad took over the government's function in rice supply and subsidies management and all consumers have to pay extra to enable this company to be profitable and dividend paying to another concessionaire holder.
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"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?"
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Please bear in mind that when our food suppliers and manufacturers calculate their cost of production and sales, they have to include profit guarantees or compensation accruing securely to the highway toll concessionaires who hence do not have great pressure to keep cost down.
Making food prices reasonable also does not require making a well connected person taking up a huge chunk of sugar subsidy
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According to note 29 of its 2009 accounts, government grant /tax payers money of RM287 million was received by TW Group for rice and sugar.
Amazingly, this was disclosed in the accounts:
RM203.6 million or roughly 21% of the subsidized sugar was sold to......Bukhary Sdn Bhd
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It is perhaps time for the government of Malaysia to serious look into the following strategic points:
1) ensuring Malaysian food supply can be substantially supplied by our own agriculture sector, thus insulating ourselves from the impact of world market; and
2) designing a complete and shortest possible supply route that ensure the food stuff reaches the population quickest possible (guaranteeing freshness) with minimal middle men intervention hence substantial portion of the profits can be channelled back to the farmers for their reinvestment and reward while keeping the price of food down. Reviving co-operatives anyone?
Steel and automobile industries are among those listed as "industry of national strategic importance" but I would rank food production above those 2 as more critical.
Let's look at how seriously our neighbours take their food supply:-
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1) Singapore:
http://www.ava.gov.sg/NR/rdonlyres/9253E7B2-E57D-4992-982C-1304E73748D6/17884/MEDIARELEASEUPDATESONGOVERNMENTSEFFORTSTOENHANCEFO.pdf
UPDATES ON GOVERNMENT’S EFFORTS TO ENHANCE FOOD SUPPLY
RESILIENCE FOR SINGAPORE
1. The Ministry of National Development (MND) and the Ministry of Trade
and Industry (MTI) had formed an Inter-agency Committee (IAC) in 2008 to
look into the long term strategies to ensure that Singapore continues to enjoy a
resilient supply of safe food. The IAC’s recommendations were announced for
implementation in July 2009
Food fund
3. The Food Fund was launched in Dec 2009 with the aim to strengthen our strategies of food diversification and local farming to ensure a resilient supply of food for Singapore.
7. AVA’s "matchmaking" efforts have also resulted in the successful establishment of an MOU between the Singapore Food Industries Pte Ltd and Indonesia’s fruit and vegetables association. Apart from this, AVA has been working with NTUC FairPrice in their ongoing efforts to expand their contract farming initiative. NTUC FairPrice recently established a new contract farm in Medan, Indonesia, to supply leafy vegetables to Singapore.
Food Substitutes
8. To help consumers mitigate the effects of potential supply disruptions and price increases, AVA has implemented public education programmes to create awareness on the availability of good product substitutes. Consumer uptake of frozen meat has increased since the launch of the frozen meat public education programme. A similar programme to raise awareness of liquid eggs and egg powder as viable alternatives to shell eggs was launched in Feb 10.
2) Brunei:
http://www.bt.com.bn/friday-special/2009/11/13/editorial-time-address-global-food-security
Brunei Darussalam has targeted a rise in its rice self-sufficiency target to 60 per cent by 2015 and also seeks to increase its self-sufficiency in other food requirements including fruits and vegetables and seafood like fish and prawns. Brunei is already self-sufficient in beef. The Brunei government owns a cattle farm in Australia that supplies most of the country's beef.
On Tuesday, His Royal Highness Prince Haji Al-Muhtadee Billah, the Crown Prince and Senior Minister in the Prime Minister's Office, emphasised on innovation taking a primary role in achieving and maintaining food security in the Asean region. Speaking at the opening of the 31st Asean Ministers on Agriculture and Forestry Meeting (Amaf), His Royal Highness said: "I believe that innovation, based upon science and technology, will be a primary contributor to the maximisation of food production in a sustainable, more cost effective and environmentally responsible manner."
3) Indonesia
http://oryza.com/Asia-Pacific/Indonesia-Market/9617.html
Indonesia Attains Rice Self Sufficiency
By news desk on January 01,2009
Indonesian Vice President Jusuf Kalla has announced that the country would not be importing any rice in 2009 because its rice production target has been achieved.
The vice president also said that Indonesia had this year succeeded in achieving self-sufficiency in rice after a period of almost 50 years in which the country’s rice production continuously dropped
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So, where do Malaysia go from here? Should more resource and attention be directed to making food supply secured and afforable, rather than raising more bonds for more cronimonics projects which turn up as white elephants, abandone projects or not so well maintained structures thereon?
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