Friday, April 3, 2009

Rising Food Prices

When the prices of petrol was raised before the 308 election, essential food prices went up. The reason was fuel hike sent the food prices higher. Today, the fuel prices has dropped dramatically almost the same as before the hike. However, food prices for vegetable, fruits, and hawker’s foods have not gone down, in fact it has gone up.

When it comes to controlling prices of common food items, the Ministry of Domestic Trade and Consumer Affair is a toothless tiger that can only make noise and virtually impotent to deal with rising food prices, even at the hawker’s level. For controlled food item, there is no problem but this is only a very small item in the total food basket.

It is the basic necessity that is causing a pinch among the consumers and the relentless rice of food even at hawker’s stall shows that consumer are at the mercies of the traders. Even within the country, the prices of basic necessities like vegetables and fruits can varies from one another.

When I was the chairman of domestic trade and consumer affair council in Johor in the early 90s, I found that 70% of the basic food items in Johor Bahru are even higher than that of Kuala Lumpur. This was due to the demand factor from Singapore. Johor Bahru caters to a consumer- base not just confined to JB but also Singapore with population of 4 million, while JB has only a population of 1.2 million.

In Sabah and Sarawak, some of the essential items are more expensive than KL and they blame transportation cost for the price differential.

If we want to bring down prices of essential food items, then we have to look into the distribution system. Today, this system is often controlled by middleman. A good example is fruit and vegetable. You can plant a lot of foods and vegetables but because of inefficient distribution system that is controlled by a few people, there may be a glut of supply but the prices remain the same.

In the mid-90s, I did a simple study of the ex-farm price like kailan and choy sum, it fluctuates from RM0.30 to RM1.00. But what was surprising is that the retail price of these two common vegetables at the market never goes below RM1.00 per kg, even when there was a glut and the ex-farm price was only RM0.30 per kg. In other words, there is a big markup, both at the middleman and the retail level. Farmer is equally impotent to break this cartel of middleman controlling the distribution system.

One should not talk about enforcement since a lot of these food items are not controlled items. At the end, it is the rakyat as consumer that have to take charge. If everybody uses his vacant land within their compound to plant foods and vegetables, then I am sure we will manage to bring prices down more effectively. If you go to North Vietnam or a large part of China and even part of Indonesia, what strike us is that every inch of arable land is planted with vegetables and fruits. Even the roundabouts are not spared.

I had the opportunity to travel from Cheng Du to Chong Ching in China, a distance of about 300km (if I am not mistaken). Besides trees for landscaping, what was noticeable was fruit trees, vegetables and integrated farming been practiced extensively. In these 2 cities, invariably during lunch and dinner, you find varieties of vegetables and I am given to understand that it is inexpensive.

In the same way if you go to North Vietnam, vegetables are planted everywhere and an inexpensive food item. The government started the green revolution many years ago but they have not been very successful. Somehow most Malaysians have no interest in gardening. If they do, they are more interested in planting flowers rather than vegetables and fruits.

In my house in Batu Pahat, I planted a lot of choy sum and lettuce, two trees of dragon fruits, two trees of passion fruits and two papaya trees. You will be surprised that there seems to be continuous supply of papaya and vegetables. These were all planted in front of the house and beside the house in between my neighbours. I should include the photographs of all this in this posting. Imagine if every Malaysian starts growing fruit and vegetables in every available piece of land and I am sure that it will bring down the prices of these two essential food items. There is no need to do a lot of researches about the supply and distribution chain.

Certain popular hawker food can be pricey in strategic location within KL. To ask for a total boycott is not feasible. We may just learn to be discerning about eating out. The time has come maybe for Malaysians to talk about morning breakfast and lunch with packed fruits from home. This habit of packing bread and sandwiches for breakfast and light lunch should be encouraged. Contact YB Chua Tee Yong for information on how he develops this habit since he started work in KL five year ago. I am not trying to promote ‘kedekut’ or being miser. You don’t pay for something that is not value for money.


fylam said...

Dr. Chua,

You cannot blame the ordinary people for the increasing price of food items.

First, not all people are privy to owning a house with a small garden. Only those in kampongs do have a plot of land for gardening of fruits and vegetables. Even some new villages do not have the luxury of land for this.

What's more with those staying in towns. There are a lot of hardcore poor in these areas.

Let's look at the issue of food prices in detail. Yes, the middlemen are the ones raking in the highest percentage of profits in the food distribution chain. Why ?

The infrastructure connecting cultivated areas and the demand areas are not well developed. This is an area the Federal government must addresssed like roads , river transport , irrigation canals food collection centres etc.

The issue of licences for lorry transport is fully controlled and thus monopolistic. This leads to corruption the cost of which must be built into the cost structure.

Trading licences for end consumer marketing at the Majlis and Perbandaran level is also tightly controlled and some of the excess and unproductive cost had to be built into the final price also.

In the end, the poor rakyat at the end of the food distribution chain must bear the brunt of these unproductive and highly controlled environment.

If you care to talk to those at the different levels of the distribution chain , you will understand the reasons behind the unusually high cost to the final consumer.

Pearls said...

Ministry of Domestic Trade and Consumer Affair is a toothless tiger??!! Eh, get it right. All ministries in the government are toothless tiger la!

This food price increase story has been going on and on and on for the longest time. Everybody blames everybody but I can tell you the right person or party to blame is the government! All these hasty decisions to increase petrol price by a few folds are bound to encourage profittering. What do you expect?? Businessmen are Mother Theresa ah? Of course not. Get real!! I know this because of my years working in a FMCG.. no matter what, profit margin must be maintained!! So, who is to crack the whip on people like us? NOBODY!! because the ministry who is suppose to do it a toothless tiger. How moronic is that!?

As for planting vegetables and all, eh, not everyone got a small piece of land la. Not everyone can plant anything la. Not everyone got the time to go plant fruits or vege to eat la. Real people gotta get up before the break of dawn to get to work where performance and results at work are paramount and most of the time, can only get home when it is DARK! On top of that, gotta clean house, manage children and spouse, etc. Where got time to skip around a strip of land in front/at the back/at the side of the house (if any la) and do gardening!? OIK!! get real la!

So, conclusion, the harsh reality is consumers are at the mercy of traders and traders are SUPPOSE to be at the mercy of the Ministry. So, you tell me who has actually fcukup big time here!?

By the way, I am one of those rare REAL people who had to do all the above and yet got a herb garden that can compete with Jeanne Abdullah and produce enough to make delicious vietnamese rolls, pots of cabbage tucked neatly amongst my self landscaped garden of kangkung, bayam, sawi, siew pak choy, long beans, cucumbers, flowers and orchids. Also got banana, papaya trees and yams! I also pack my lunch to work most days.. but yet, I still feel the pinch!!

呉 和豪 said...

YB Dato Seri Dr.Chua
I like this article much more than other because it is less political
,this day I am very fedup with politic , very stressing to read politic , to involve in politic.

Imagine if every Malaysian starts growing fruit and vegetables in every available piece of land and I am sure that it will bring down the prices of these two essential food items. There is no need to do a lot of researches about the supply and distribution chain

Not only that we save , but we become heathier physically and mentally, to lead a good live we must know how to balance ourselve , must know how to comunicate with nature , and get wisdom from陶渊明
By the way how can we contact蔡智勇

呉 和豪 said...

Dato Seri Dr.Chua
We should consider vertical farming as way to provide sufficient supply of food , we have the geographical advantages in implementing this project. For city like KL , the city council may
identify abandon buiding for this purpose such as abandoned smoke house
Below are the suggestion that I had send to DBKL on KLcity Plan 2020, vertical farming project is one of the suggestion I had made
Saya berpendapat bahawa penigkatan nilai Bandar seperti Kuala Lumpur

Putrajaya pada masa akan datang bukan sahaja bergantung kepada peningkatan

pembinaan infrastucture dan bangunann sahaja, tetapi juga ada kaitan dengan

unsur kemanusian, keseniaan ,kebudayaaan dan pemeliharaaan alam sekitar.

Bandar yang bertaraf dunia seperti PARIS terkenal di dunia bukan kerana ia adalah

metropolinian yang moden sahaja , tetapi bandar itu

juga mempamirkan unsur budaya ,seni dan alam sekitarnya yang istimewah misal nya

Muzium LOUVRE yang sungguh menarik. Kita tidak ada MUZIUM LOUVRE di KUALA

LUMPUR , akan tetapi MUZIUM yang Bernyawa atau LIVELY MUSIUM di KUALA LUMPUR juga

tidak kurang menarik.Kawasan ZON SENTUL MANJARALA yang terhias dengan budaya

Melayu,Tamil, Thai,Sikh ,Gujarati dan China benar benar mempamirkan Truly Asia In

Malaysia, sesuatu keistimewahan yang kita orang Malaysia harus banggakan.

Juga dibahagian Sungai Gombak yang berdekatan dengan sentul boleh nampak

burung bangau jalan atas air sungai pada waktu pagi.

Permandangan yang istimewah ini pasti akan menarik pengunjung luar negara ke

Kuala Lumpur dan menjanakan pendapatan matawang asing kepada negara kita. Pada

pendapat saya pengunjung luar negara ke Kuala Lumpur dijangka akan meningkat

berikutan dengan penyenaraian Georgetown dan Kota Melaka sebagai warisan dunia.

Sukacita jika pihak tuan dapat memperuntukan kawasan bagi Colonisation project (vertical farming)yang menggunakan kaedah yang diubasuaikan daripada aerospace technogy untuk menanam dalam bangunan yang bertingkat tinggi. Tananaman yang diperolehi boleh membekalkan bekalan makanan bagi 50000 orang penduduk.(Mengikut lapuran Discovery)

Dengan ini saya berminta kepada pihak DBKL untuk membuat segala gala nya untuk

memeliharakan kampung kampung tradisional dan memberi pertimbangan kepada project

vertical farming.Saya berharap cadangan pihak DBKL dapat memberi pertimbangan cadangan saya.Saya sudi memberi bantuan dan maklumat kepada pihak dbkl

Yang Ikhlas

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