Withering Food Security worries.

Since 2014, Malaysians arguably face what is surely the most challenging transition period yet on the aspect of  increasing cost of living in this fair nation.

One of the more disastrous effects of this higher cost of living comes in the form of unjustified Food price increases’. Food prices had risen to a level that is considered abnormal or 'excessive'. 

The percentage increase is much higher than what was ever seen previously.

Notionally, higher cost of living had dampened consumer demand as reflected by the consumer index which dropped to 63.80 in the fourth-quarter of 2015, the lowest in a decade.

Though we may have settled down with the Goods and Services Tax, with the ringgit starting to appreciate and crude oil prices on the rebound, the rising cost of living still remains a main challenge and the populace has no choice but to deal with it.

A cursory look at shopping mall car parks show them to be 100% occupied, but  inspecting the purchasing demand statistics shows that the buying power and purchase quantity has dropped as any visit to leading malls will show you.

Why is this?

The rise in living standard, the population increase (where more than two million are immigrants), the differing lifestyle between urban, semi urban & rural areas and their changing nutrition pattern had pushed up the needs and demand for all products and food items.  

On top of that Malaysians are fully aware that prices of imported food (price inflation) will be further increased near to the festival due to weak Ringgit strength, global El Nino weather affect, and increased market demand. (By the way, everything from Rice, Mutton to Beef & Fish is imported).

So what needs to be done?

Something that needs urgent attention from our leaders is the fact that Agriculture as a whole is seen as a sunset industry here in Malaysia. The marginalization of the food sector due to the emphasis on industrialization since the 1980' is very evident.

Just look at the statistics’ of each state’s income generation chart, and clearly you will notice that the contribution from the Agricultural industries / sectors are amongst the lowest.

In my personal opinion, the ever increasing rise in retail food prices is induced by the rise in prices of inputs such as fertilisers, chemicals, land, labour and machinery. 

Although the government protects the prices of petrol and diesel, the price of fertilizers had risen by 70 per cent within the last two years and wages had also gone up.

This being the case, with the upward levels of sectorial (retail) market- (demand increase), normal weather pattern disruption, low productivity and other natural calamities easily affecting the gross output of our agricultural industries…..these disruptions make consistent supply difficult for major retailers like Mydin, Aeon, Tesco, Giant et al to rely on. 

This forces them to rely on imports to overcome cyclical requirements from the ever increasing Malaysia population.

Thus, imported food now becomes a component of our daily life as a cost of convenience and industrialization of the nation.

This means high Ringgit fluctuations in the Foreign Exchange (or long term low ringgit value) makes the cost of living in Malaysia very much higher than Economists plan it to be. 

It doesn’t help that the government insists that a low ringgit value is necessary to help exporters make higher profits (thus increasing government revenue through Taxes) and lowers our Labour costs (as O&G, GLC & MNC’s hire more of the population than any other industry) .

So, in a nut shell, as a member of the hoi polloi, we’re screwed both ways to infinity … which only makes it more interesting to note that by extrapolating on these given facts above….in which direction this nation would be heading in the near term, should no changes happen to either our National Food Security Agenda or Agricultural Policy.

Ah so!