LETTER | Are consumers really to blame for high food prices?

LETTER | Economy Minister Rafizi Ramli recently was reported to have said that consumers are partly to blame for high food prices by continuing to purchase essentials although prices have gone up.

According to the Malaysia Economic Monitor Report published by the World Bank in 2019, it was reported that 30 percent of Malaysians felt that they did not have enough money for food. Further, the number of Malaysians who felt that they did not have enough money for food had doubled since 2012.

In a study by Universiti Putra Malaysia on young workers in public housing areas, 48.9 percent reported that they needed to borrow to buy basic food items, 61.1 percent reported not having enough money for medicines and 89 percent made late bill payments.

In a more recent report, it has been stated that post-pandemic, 20 percent of M40 have fallen into the B40 category.

The World Bank Report has clearly reported that between 2012 and 2018 both rural and urban Malaysians have felt growing hardship in their living conditions.

In the simplest terms, consumers are suffering from low incomes and high prices. Not because they are choosing to patronise expensive options to fulfil their hunger and their needs.

Despite Fomca’s continuous advocacy for food security, we continue to under-invest in food production, whereby our self-sufficiency is too low to meet demands for basic foods. More than RM50 billion is spent on importing food; resulting in high volatility of food prices, for example currently when our ringgit is falling relative to other countries.

Despite Fomca’s screaming on prices manipulation and monopolistic practices along the food supply chain and confirmed by a rigorous study on the food supply chain in Malaysia by the tax-funded Competition Commission has clearly stated that excessive anti-monopolistic practices along the food supply chain are resulting in excessive profiteering and exorbitant prices; we just get lip service to cleaning up the food supply chain.

I do agree with the minister that there are young workers who rather spend their limited incomes on expensive bistros or the latest smartphones or cars they can ill afford.

For example, in a study by Fomca on young workers, 47 percent were excessively indebted. In a study by the Asian Institute of Finance, on young workers aged 20 to 33, 70 percent were living beyond their means.

But I honestly believe that the B40 and increasingly the M40 are struggling to feed their families and to maintain some minimum level of financial security.

Prices are high because of low food production, the dependence on food imports and price manipulation, not consumers eating expensive food.

Let me assure the minister that every suffering household knows where to get the cheapest food better than any official data.

Rafizi, please do not just listen to the official data; the CPI and the GDP. There used to be a gap between policymakers and the ground reality. Today, that gap has grown into an abyss. Talk and listen to the rakyat, Rafizi.

However, Rafizi does have a point - consumers do have a role.

With the theme “Change Begins With Me”, Fomca had run a National Consumer Campaign focusing on consumer education on what we would call “mindful consumption” and financial behaviour towards responsible consumption and responsible financial management.

Based on the evidence, we believe that to some extent we had changed consumer behaviour towards responsible consumption and responsible financial management,

But we need to invest in consumer education and financial education.

Finally, the government has a significant role in food production and regulation of the food supply chain. Instead of blaming consumers, the government should actually empower consumers through consumption and financial education.

PAUL SELVA RAJ is Fomca secretary-general.

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.