The committee said reducing reliance on the concession agreement with Bernas would push the rice industry towards an open market.
The recommendation was one of eight presented by the PAC in its report published today on the receipt of social obligation payment as part of the national rice industry management agreement under the agriculture and food security ministry.
According to the report, the Bernas concession agreement was first signed for a 15-year period in 1996, with a total value of RM1.2 billion. It was extended for an additional 10 years until Jan 10, 2021 for RM2.86 billion and once more until Jan 10, 2031 for RM3.216 billion.
In a written parliamentary reply yesterday, agriculture and food security minister Mohamad Sabu said the government currently had no plans to end Bernas’s monopoly.
Mohamad said the existing rice import policy remained the most effective approach to address the current shortage and future challenges.
In the report, the PAC also said the agriculture and food security ministry should monitor Bernas’s social obligation funds in a timely manner and in accordance with its concession agreement.
“The 2021 social obligation fund amounting to RM37 million had not been received by the ministry as of Dec 31, 2021,” it said.
“Following an audit warning, the ministry received a sum of RM12 million in 2022 and 2023. The remaining RM25 million was to be paid by Bernas in stages.”
However, the PAC said as of June 14, Bernas had not yet channelled the remaining RM25 million.
As such, the PAC suggested that the ministry impose penalties on concession companies that failed to meet their obligations in accordance with the requirements in the agreements.
“This includes, and is not limited to, the failure to pay the RM25 million social obligation fund within the stipulated time period.”
It also suggested that the ministry and Bernas provide a joint key performance indicator (KPI) report that was more accurate, transparent and realistic, based on actual farm management performance.
Another recommendation by the PAC is for Bernas and the national registration department to integrate and update the padi price subsidy scheme (SSHP) database.
The national audit department said it found that a total of RM0.73 million in SSHP payments was paid to 300 deceased farmers over the last 15 years when these should have been made to their beneficiaries instead.
“The main cause of the problem is the lack of clear procedures or mechanisms in the ministry to verify the accuracy of SSHP recipients’ data,” the report said.