COMMENT How much rice can one person eat? Based on figures from the United States Department of Agriculture’s Foreign Agricultural Service, the average Malaysian consumes around 75kg of rice a year.

Malaysian rice consumption per capita was 95kg in 2010 and this does not account for foreign workers and tourists. A more realistic figure is estimated to be between 72kg and 75kg

An article in The Jakarta Globe puts the figure at 63kg, compared with 60kg for Japan, 100kg for China, 139kg for Indonesia and a whopping 200kg for Myanmar.

Although our consumption may not be as high as some of our neighbours, 60-75kg is still a substantial figure; go to any eatery – a mamak stall, hawker centre or Chinese restaurant – and you can see Malaysians gorging themselves on rice steamed in rich coconut milk, drowned in a medley of spicy curries or fried with pungent belacan and ikan bilis.

It cannot be denied that rice is an important staple food for Malaysians.

That is why the National Rice Stockpile exists; to maintain 45 days of reserve rice supply for Malaysians, which is equivalent to 292,000 metric tonnes, at any given time, in case of emergency.

Where national food security (and the ample supply of nasi lemak) is concerned, one hopes that the government is transparent and open in directly managing and maintaining this National Rice Stockpile.

Unfortunately, the management of the National Rice Stockpile is “outsourced” to Bernas, a company that is currently 83 percent controlled by just one man, Syed Mokhtar Al-Bukhary, who is attempting to take Bernas completely private.

A mechanism to stabilise supplies

“Rice as a strategic commodity with security undertones is to be safeguarded at all times... We regard this role (managing and maintaining the National Rice Stockpile) as more than an emergency or food security function. It is also a mechanism to stabilise supplies and prices of rice in the country.”

This paragraph above isn’t a quote from some minister’s speech. It is taken directly from the Bernas website, which lists the many important roles of Bernas, including, but not limited to, paddy procurement, rice importation, rice distribution, paddy price subsidy management and Bumiputera Rice Miller Scheme management.

Should these roles, which are of national interest, be in the hands of one man, let alone the price of the rice that we consume daily?

To understand how one man has managed to monopolise the rice trade in Malaysia today, we will need to step back in time.

In 1971, the National Padi and Rice Board (LPN) was established to stabilise the price of paddy and rice and safeguard the interests of farmers and consumers.

LPN was corporatised in 1994 as Padiberas Nasional (Bernas), privatised in 1996 and listed on the Malaysian Stock Exchange (Bursa Malaysia) in 1997. Has the Bernas of today deviated from its original mission of protecting paddy farmers and consumers?

To be fair, since Bernas is no longer the old statutory body of yesteryear, it should be answerable to its shareholders, just like any other public listed company. Therein lies the crux of the matter – however one chooses to spin it, public-listed companies are essentially profit-seeking.

Maximising profit the aim of all listed firms

No public listed company is in business to make losses. Maximising profit and providing increasing returns to shareholders is the aim of any company, private or public.

How then can any party ensure that Bernas has the interests of farmers and consumers at heart? Perhaps, if the paddy farmers themselves hold a sizeable stake in Bernas.

The National Farmers Organisation (Nafas) and the National Fisherman’s Association (Nekmar) hold a paltry 4.7 percent and 4.3 percent stake in Bernas respectively. Compare this with Syed Mokhtar’s total stake of about 83 percent.

Syed Mokhtar is now attempting to take over Bernas and delist it from Bursa Malaysia. One possible result of this is that the very little influence paddy farmers have today as shareholders in Bernas may be completely eliminated.

What was the government’s response? On Nov 26, 2013, Bernama reported that Agriculture and Agro-based Industries Minister Ismail Sabri Yaakob had received a written pledge from Bernas.

Ismail announced that Bernas had put down in writing that “the delisting was only temporary until the company’s restructuring process is completed”. Also, Nafas and Nekmat would purportedly get a five percent shareholding each in the re-listed company.

Minister Ismail’s statement was contradicted by Bernas in a written reply to Bursa Malaysia on Feb 11, 2014. The board of directors of Bernas denied that they were aware of any such written arrangement.

One hopes that Ismail was misquoted. Perhaps he was even misinformed. Some observers across the political divide suggest that it was a deliberate, inaccurate reassurance made to appease the farmers, to pave the way for a smooth takeover of Bernas.

Whatever the reason may be, the minister owes an explanation to clarify this matter but there has been no further development on this as at the time of writing.

Tomorrow: Part II - Why the need to privatise Bernas?
 

ROGER KINKLADZE is the pen name of a Malaysian management consultant with a passion for being critical of silly decisions, all for the sake of the country's future.