In the wake of the recent ‘meat cartel’ scandal, I urge the government to face up to the abuse of Approved Permit (AP) and review the current mechanism of approving and using the AP for food imports.
The government must formulate post-pandemic strategies to achieve food security in order to reduce our reliance on imported food and prevent food crisis.
Recently, the New Straits Times reported that a meat cartel syndicate had been exposed for forging halal documents and abuse AP to smuggle frozen meat before repackaging the meat using the halal logo at a warehouse. The meat cartel bribed relevant senior officers with money and even sex, in order for them turn a blind eye to the cartel’s operation from slaughtering, importing, customs clearance and sales.
The meat cartel scandal proves that the extremely flawed mechanism of AP for food import can be easily abused, and has become a breeding ground for corruption.
The AP system did not only erode the people’s confidence in food safety, but has also brought about severe repercussions to the development of local small and medium-sized agriculture.
First, the government must acknowledge that the system of AP for food imports has deviated from its original intention, and is seriously jeopardizing food security and increasing the cost of living of low-income groups.
The government initially introduced AP for food imports to allow a small number of individuals or companies to intervene in economic activities in various fields by importing a specified amount of goods, such as vegetables and meat from abroad.
The original intention was to stabilize market supply and demand as well as prices. However, because the AP application process and approval process have not been transparent and, compounded by the lack of tracking and monitoring mechanisms, the AP system eventually became a hotbed for rent-seeking activities as well as corruption.
Based on the report titled “Market Review on Food Sector in Malaysia” published by Malaysia Competition Commission (MYCC) in 2019, only the well-connected food importers can easily obtain AP and engage in rent-seeking business to by selling their quota of food imports to other importers at a high price to profiteer from it.
This will not only affect the overall competitiveness of the agricultural and food industry, but will also sideline the local small and medium companies. As a consequence, Malaysia’s food trade deficit and capital outflow will exacerbate.
The meat cartel has exposed various flaws of the AP mechanism for food imports. Therefore, the government must set up an independent special task force to thoroughly investigate the flaws, and identify and severely punish the relevant units and well-connected individuals involved in abusing AP.
Apart from that, the government must also review the application procedures and approval process to ensure that the AP mechanism for food import is in line with our national food security strategy, and to increase our food self-sufficiency rate to 100% in order to guarantee our national food security.
Second, the government must face up to the country’s food security problem, by banning food to be imported freely to ravage the domestic market, and reviewing AP for food imports that has turned into a money-making tool for a small number of individuals.
Based on the same report published by MYCC, the self-sufficiency rate of round cabbage has sharply dropped by 42% from 2014 to 2017. It was due to a few factors, including the merciless demolition of unlicensed farms in Cameron Highlands by the government, and the increase in labour and production costs. Unfortunately, even consumers did not benefit from the influx of cheap imported cabbage as it totally disrupted the market. Instead, the market price of cabbage has been rising in recent years.
Obstacles to food supply and circulation due to human errors will inevitably bring about severe challenges to regions and countries that depend on food imports. In order to ensure that their local food supply remains sufficient since the Covid-19 pandemic, many countries including China, Russia, Vietnam, Egypt, and India have restricted or even stopped food exports.
When the global food supply chain is greatly affected, countries that rely heavily on food imports are trapped in limbo, in which the low-income groups being the first to bear the brunt.
The interruption of global trade and national lockdown measures have also increased the difficulties for agricultural products to be transported to the market, processing plants and ports.
In some cases, when some cities were facing food shortage, much food was left rotten in the fields in rural areas. It was also reported that when it became more difficult for agricultural products to be transported to processing plants and the market, a large number of farms even had to dump or destroy milk and fresh food.
Regardless of whether the AP policy was introduced in good faith, the scandal has proven that the AP system only allows a small number of importers to import food for profit, yet jeopardizes the interests of most small and medium farmers.
When a small number of companies are given the special rights to import food, the prices of agricultural products produced by the local small and medium-sized farmers will inevitably be affected, thus making it difficult for farmers to earn stable income by engaging in agricultural activities.
Also, when a small number of individuals can easily import food to monopolize the market and trample on the livelihoods of local small and medium farmers, it is foreseeable that more farmers will have no choice but to gradually give up agricultural activities, due to the fact that it’s increasingly difficult for them to compete with the well-connected individuals.
In the long run, this will even affect the development and transformation of the local agriculture, and hinder the country’s effort to achieve the strategic goal of food security. As a result, our country will be doomed to be reliant on foreign food continuously, which will exacerbate the food trade deficit that seriously jeopardizes our national interests.
Third, the government must immediately promote collaboration between different ministries (particularly the three main ministries, namely Ministry of Agriculture and Food Industry, the Ministry of Domestic Trade and Consumer Affairs, as well as the Ministry of Finance) and private enterprises.
Such collaboration will help the government formulate long-term strategies, revise the AP policy that stifles domestic economic activities, as well as assist domestic small and medium farmers to increase production and gradually transform their agricultural activities.
Cooperation between the key actors in agriculture will help our country reduce dependence on imported food, achieve the goal of national food self-sufficiency, while improving the quality and international competitiveness of local agricultural products.
Since Malaysia is a developing country, whereby most of the citizens are from B40 groups, the vulnerable groups will be affected the most once the food prices fluctuate. Also, as poverty has exacerbated since the pandemic broke out, food crisis will ultimately lead to social instability.
The meat cartel scandal has gone beyond the issue of halal certification, and is a concern to the food safety and food security of the country. This issue exposed intertwined corruption, fraud, and loopholes within and between various departments and agencies.
For the sake of guaranteeing the health of all citizens, the government must set up a commission of inquiry in order to thoroughly investigate the issue and uncover all syndicates behind the scandal.
The government must be fully prepared for any potential food crisis, promote the development and application of agricultural innovation, enhance food production capacity and capabilities in disaster prevention and reduction, assist and support small and medium farmers, guarantee an unimpeded local food supply chain, as well as to promote food self-sufficiency at all levels with the cooperation from each and every citizen.