Switch to padi output subsidies in the works

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Switch to padi output subsidies in the works
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Minister Mohamad Sabu says giving subsidies based on output would encourage farmers to increase padi production.

Mohamad Sabu trying his hand at transplanting padi last month. He told the Dewan Rakyat today of plans to change padi subsidies.

He said the government spent nearly RM1 billion on input subsidies for padi farmers in 2022, offsetting 60% of farmers’ production costs by subsidising padi seeds, fertiliser, pesticides, lime and ploughs. “In the long-term, the ministry plans to implement a transition from input subsidies to output subsidies to encourage farmers to increase padi production. This will gradually establish a self-regulated industry that will see less government involvement and oversight in the rice production chain,” he said in a written reply to Dr Ahmad Yunus Hairi .

In 2020, Khazanah Research Institute recommended a shift to output subsidies, which are tied to farmers’ productivity, coupled with research and development to improve padi yield and reduce production costs for farmers.

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