KUALA LUMPUR: Experts believe that while the government's focus on re-examining the country's subsidies system should remain a priority, it has to go in tandem with identifying and addressing the root causes behind the rising prices of goods.
Consumers Association of Penang (CAP) senior education officer N.V. Subbarow said the government must first and foremost address agricultural output challenges in safeguarding the main source of food for the population.
Citing the current egg shortage issue, Subbarow, who visits agro-producers and wet markets regularly, said a number of egg-producing chicken breeders had resorted to selling their poultry.
"They (farmers) said some of the chickens can no longer lay eggs, so the meat was sold to the market instead. The Agriculture and Food Security Ministry must look into the real issue instead of giving more and more subsidies to the producers.
"Similar issues have occurred with other livestock. I also know breeders of milk-producing goats who have sold off their livestock for the meat," he told the New Straits Times.
He said the eradication of middlemen, a huge headache to the government, could be achieved through increasing platforms for farmers to sell their products directly to consumers, or at least to authority bodies.
He suggested increasing number of agricultural centres in the regions which would help reduce farmers' transportation costs.
"Some farmers have no choice but to sell their vegetables to middlemen as they don't have the means to transport them far away. Centres located near their farms will greatly help these farmers with selling their products directly.
"Regular checks and enforcement actions would also help prevent profiteering among sellers."
On the proposed subsidies restructuring, Subbarow said capping the amount of subsidised electricity for domestic users could help them become smart consumers and prevent wastage.
"As for the industries, the prices of their goods they produce should reflect the subsidies they receive, or otherwise they should pay the normal industrial rates.
"It's not fair for them to raise the prices when they also receive subsidies."
Meanwhile, Associate Professor Dr Ahmed Razman Abdul Latiff said while targeted electricity subsidies will reduce the energy cost burden for B40 and M40 households, the move would also subject manufacturers to higher tariffs and drive up the prices of essential items.
Razman, an economic analyst at Putra Business School, said the government should roll therefore out financial assistance for the B40 and M40 households to cope with their daily expenses.
"Without subsidies, larger corporations will have to push up the prices of their products to cope with the higher electricity tariff.
"Fuel production will also get more expensive next year since it is expected that the cost of purchasing coal and gas will be 2.5 times higher than now.
"If the higher tariff rates translate into price hikes for consumers, then the subsidy revamp will be a futile exercise.
"So, the best way to implement targeted subsidies is to also distribute monthly financial assistance in the form of e-vouchers to B40 and M40 households," he said.
Razman said giving out e-vouchers was more sustainable compared to distributing cash handouts, which would require the government to borrow more and raise the federal government debt. The e-vouchers, he said, should be doled out until the government can rein in inflation.
He also urged the government to fully utilise the Bantuan Keluarga Malaysia (BKM) database to identify B40 recipients for the targeted subsidies and derive a similar list for M40 recipients from the Inland Revenue Board.
