This article first appeared in The Edge Financial Daily on August 30, 2018

ALOR SETAR: The national rice agency, Padiberas Nasional Bhd (Bernas), has brushed off allegations that it is short-changing paddy farmers imposing unfair, higher deductions on what it pays farmers to buy their paddy.

Bernas currently buys paddy from farmers at RM1,200 per tonne in Peninsular Malaysia, which is higher than the Guarantee Minimum Price (GMP) of RM750 per tonne imposed under Control of Padi and Rice Act 1994, according to Kilang Beras Bernas (KBB) management head Mohamad Solhi Mohd Salleh.

KBB is Bernas’ rice mill. From that per tonne price, Bernas imposes a deduction of between 18% and 24%, depending on the quality of the rice they get from farmers. The agency also has the right to reject a portion of the product if there are impurities found caused pests and diseases.

Mohamad Solhi said the agency keeps to a set of standard operating procedures (SOPs) and regulations that were established the ministry of agriculture and agro-based industry formalised last year.

“Bernas supports the government’s move towards efficient industry. This (deduction rates) was not devised or revised Bernas, but was from the ministry and we are governed the SOPs that come with a table as our guideline.

“It is not something that Bernas simply sets or does. We follow the rules and make sure it is done in as fair and correct a manner as possible,” he said at a media briefing ahead of a visit organised Bernas to KKB’s mill in Kangkong here yesterday.

“There have been no changes for the price of paddy since 2014 and even if we were to buy paddy from farmers at the minimum level of RM750 [per tonne], they (the farmers) cannot sue us because that’s the GMP,” he said.

“We have certain procedures [to follow] and our deduction rates are based on the quality of the paddy for us to do the grading, before the paddy is put through the milling process,” said Mohamad Solhi.

“We prefer paddy that can turn into white rice and is not watery. We are not interested in straw and immature grains,” he said.

Regardless, Bernas is the buyer of last resort if a particular harvest farmers is rejected other mills, said Mohamad Solhi. “We cannot close our door to the farmers. We still have to buy everything from them.”

However, a representative of paddy farmers in the north (Kedah, Perlis, Penang and Perak) has urged Bernas to reduce its deduction rates.

“When the deduction rates are higher, we (the farmers) get a lower payout for our harvest. This (lower income) really hurts us.

“We want Bernas to consider this (lowering deduction rates). We want lower deduction rates for us to have better yields,” said Abdul Hasan Hamid, who was met during a Bernas-organised media familiarisation trip on Tuesday.

“We understand the government’s move to increase the price of paddy was meant to help us (the farmers) but we still feel burdened because our cost for planting the paddy is much higher,” he added.

The country’s sole rice importer, Bernas, is controlled businessman Tan Sri Syed Mokhtar Al-Bukhary and owns 28 mills nationwide, of which 22 are located in the north. There are a total of 180 mills throughout the country.