No to total ban of rice transhipment in Sabah

I disagree with a total ban of rice transhipment as part of the government’s effort to curb rice smuggling, as legitimate rice transhipment activities is crucial for the local economy.

During Minister’s Question Time in Parliament this morning I have asked the Minister of Agriculture and Agro-based Industry Dato’ Salahuddin Ayub as to the ministry’s plan in solving the rice smuggling issue through other less disruptive means to the local economy.

The ministry should not just impose a total ban on rice transhipment when the intention is merely to curb rice smuggling. Not all rice transhipment activities would involve smuggling. The genuine rice transhipment industry, and certain port-towns like Labuan which depends heavily on transhipment activities, are heavily affected by this move.

I have received a written reply on the 12th March 2019 for an oral question submitted earlier to the same ministry questioning whether the government intends to lift the rice transhipment ban anytime soon.

The ministry had replied stating that a Task Force comprising of the Ministry of Finance (MOF), the Home Ministry (KDN), Ministry of Transport (MOT), Ministry of Domestic Trade and Consumer Affairs (KPDNHEP), Ministry of International Trade and Industry (MITI), the Ministry of Economic Affairs (MEA) and the Foreign Ministry (KLN) has been established to study the rice transhipment issue and to submit proposals relating to transhipment of rice in all the ports of the country. The ministry also said that a research is being done on the all issues arising and the ministry expects that a new decision in relation to the implementation of rice trading transhipment will be issued in the near future.

It seems that the rice transhipment issue is a sticky issue. The main issue is that BERNAS has monopoly over rice supply in Malaysia, and no other suppliers are allowed to supply rice to consumers in Malaysia, including in Sabah & Labuan. The current ban is caused by some irresponsible people who attempted to smuggle foreign rice into Malaysia without going through BERNAS and/or not paying the necessary tax for importation.

I agree that enforcement is needed as smuggling would lead to loss of revenue to the government. However, we must balance enforcement with genuine businesses concerns, otherwise they will also be badly affected.

Sabah is located in the BIMP-EAGA (Brunei, Indonesia, Malaysia and the Philippines-East Asean Growth Area) region and the state has always have cross-border trading in the region since many centuries ago. Transhipment, which is also locally known in Sabah as “barter trade” is an important issue to Sabahans.

Many businesses are involved (in transhipment) and rice is a major part of it. Therefore the Ministry of Agriculture should consult the Sabah state government and come up with a clear policy on rice transhipment upon completion of the rice transhipment task force study.

If BERNAS monopoly is found to be one of the main role in causing this issue, I urge the government to expedite the process of dismantling BERNAS’ monopoly on rice.

Chan Foong Hin
Media statement by Chan Foong Hin in Parliament on Tuesday, 19th March 2019