By Medecci Lineil
I refer to a recent article entitled No political will to achieve rice sufficiency in The Borneo Post.
In the article, Land Development Minister Dr James Masing said there is still a lack of political will to strive for self-sufficiency in rice production in Sarawak which only manages to produce about 53% of the rice consumed by its population of 2.5 million.
One, if Masing is very serious about self-sufficiency, then perhaps he and his family plus his ministerial and political staffs should quit their posts and venture into rice production full time on his own land at Jalan Kuching- Serian.
That is quite strong political will, right? Then, the minister should take the lead.
By why is he not willing to? The reason is simple. When he works in the padi field, he is unable to spend as much time pursuing other productive ends. He has a better choice, like many Sarawakians.
Why is that so? Historically speaking, the greatest movement of labour from the agriculture sector first came about when people were able to find better paying jobs in the urban areas which could greatly improve their economic wellbeing.
This is an economic progress. This pattern is not confined to Sarawak. It is a universal, historical pattern.
But does that mean we supply less rice to feed Sarawakian? No.
Look around us, we are abundantly fed compared to many decades ago. There are so much rice sold almost everywhere than at any time in the past.
This is due to technological progress that increases rice production output throughout the years.
Also this is also thanks to the movement of labour from rice production. Our rice production has depended on fewer and fewer people and now we use the rising income obtained by producing something else other than rice production to buy local rice or import rice at lower cost.
Two, the minister also said, “We cannot keep on importing rice from these countries because if one day they decide not to export rice to us, we will be in trouble”
Let’s say we followed his advice. With the volume of rice imports artificially reduced, the rice that we would otherwise have imported from foreign suppliers at lower cost are instead produced at home at higher costs using domestic resources and workers. Now, does this make sense?
I have no doubt that Masing’s policy of self-sufficiency would stimulate rice production at home. This means resources formerly employed in the non-rice production sector would be transferred to the rice production sectors.
The same resources we use to produce goods at relatively low cost, export them and then use the income to import goods and services including rice are now used to produce rice domestically at a higher price than the cost of imports!
The final result is a reduced standard of living for 2.5 million of Sarawakian! Can the minister imagine an economy in Sarawak today with more than 50% of the workers involved in rice production?
If Masing’s argument that one day, foreign suppliers decide not to export rice to us, really happens, then that would be his fault. His policy causes Sarawakian to import less than we would and that reason alone would make foreigners become less willing to sell rice to us.
I wonder if the minister understands the concept of free trade, division of labour and the law of comparative advantage as formulated by economists such as Ludwig von Mises and David Ricardo centuries ago.
Finally, what makes the minister think more subsidies will resolve the issue? In general, Malaysia is in very weak position on the subsidy issue. We have agricultural subsidies, energy subsidies, education subsidies, housing subsidies and so forth which is making no economic sense.
Let’s imagine Masing uses other people’s money to pay for rice production and at the same time other ministers like Alfred Jabu also use other people’s money to pay even more to different sectors other than rice production, for example, palm oil plantation and rubber plantation or SCORE which basically ignore his political will and discourage investors’ interest in developing local rice production.
If he supports subsidies, one might ask if he also supports the rising cost of rice production, the increase in the cost of labour force engaged in rice production as a result of the increase in revenue of other industries promoted by Alfred Jabu and his other Cabinet colleagues in the first place and worse pushing out some small padi farmers in village, rural areas and small entrepreneurs out of their land and rice production?
This, in turn will push up the price of rice domestically and Sarawak consumers have to pay!
Imagine how much other people will lose (more than we gained) when this subsidies policy fail in the long term?
I am sure the outcome of rice production would be certainly different if Masing and his Cabinet colleagues choose to embrace free trade and remove this sick subsidy policy, never to replace it with any other, in whatever form or name.
First published by The Ant Daily on October 23, 2015.