Madeline Berma, an associate professor at Universiti Kebangsaan Malaysia, told FMT it would be unrealistic to expect government agencies to match middleman businesses in efficiency.
“They don’t work the same way,” she said, pointing out that government servants typically worked only during working hours and were constrained by bureaucracy whereas middlemen were not similarly hindered.
She also said middlemen would “do everything they can” to support farmers, fishermen and other suppliers and producers.
“For example, when fishermen need money during the monsoon season because they can’t go out to fish, middlemen will lend them the money. Similarly, when farmers need tools, middlemen can supply either the tools or the cash to buy them with, and they do this more quickly than the government can.”
Madeline noted that the government had tried to reduce the role of middlemen by establishing farmers’ markets, agrobazaars and cooperatives to enable producers to sell their goods directly to consumers
She said these programmes had achieved only partial success.
However, she spoke well of the Jimat Belanja Dapur programme, which Prime Minister Najib Razak recently launched at the national level. It appeared to be meeting its goal of reducing prices by eliminating middlemen, she said.
Consumers who shop under the programme enjoy reductions of between 5% and 20% in the prices of 27 items, including local cabbage, eggs and whole chickens.
Madeline lamented the tendency of middlemen to form cartels, saying this was one of the reasons the prices of goods in East Malaysia had not dropped despite Putrajaya’s decision to soften the impact of the cabotage policy.
She also said middlemen, in their role as logisticians, were responsible for the biggest increases in prices.
“In Sandakan, the fishermen use middlemen to distribute fish because they have ice trucks and other such resources as well as the networks to distribute the fish to areas with higher purchasing power, such as Kota Kinabalu, Brunei and Peninsular Malaysia,” she said.
“Fishermen can sell fish for maybe RM28 per kilogramme in Sandakan. In KK, it is RM48 per kilogramme.”
She said the government could reduce the inflationary effect of middleman activities by upgrading roads and bridges, especially in Sabah and Sarawak, because such improvements in infrastructure could bring down transportation costs.