The implications of alternative rice self-sufficiency policies in Malaysia

Abstract

This study investigates the implications of projection of domestic demand for rice in Malaysia by using a set of alternative assumptions on population growth, structural transformation (urbanization) and income growth. These will be used to measure the extent to which self-sufficiency in local rice production is an achievable target. The projection were formulated at three levels (low. medium, and high) in relation to the above parameters. Combinations of selected assumptions were used to make projections over 35 years from the base year of 1980 and the implications of different levels of self-sufficiency for domestic rice production were investigated. Since the parameters may differ between rural and urban sectors, separate projections for these were made. The sum of these sector projections gave the national rice requirements. The results then were compared to the total demand with zero income elasticity of demand and to an official government projection. 3y using total demand and per capita demand, the implications for land requirements. yields and imports (physical and financial) at different levels of rice self-sufficiency (50 60%. and 80 %) were than examined. The results from this study show that based on our 'best guess' scenario (medium), the rice requirements will double over next 35 years. The current achievements in increasing rice production are clearly not sufficient to meet the demand even with the lowest level of self-sufficiency. This indicates that greater efforts are required to increase production in order to fulfill the requirements. Since the possibilities for developing new land seem limited due to the difficulty of finding new flat land with adequate water supply, the only possibility is to increase the productivity per unit area (hectare). However, the cost implications for both farmers and government need to be considered since it would be likely to increase substantially over the period. These efforts of increasing production, on the one hand, seem critical as structural adjustments take place leading to further declines in employment in the rice areas. This situation could result a decline in rice production and increase imports. On the other hand, however, declining employment implies larger farms and gives greater opportunities for the modernization of the paddy sector. Show more