Citing the example of farmers in Negeri Sembilan who sell their produce to suppliers, Rafizi said the produce is then transported to the Selayang wholesale market in Kuala Lumpur before being transported back to Negeri Sembilan for sale by retailers.

“That’s why prices are expensive. All this travel is driving up prices.

“To resolve this, we need to understand why farmers are selling to suppliers. The entire business revolves around credit and cash,” he said at a stakeholders’ engagement session focusing on structural challenges in supply chain management, food security, and pharmaceutical development here today.

Stressing the importance of dismantling supply chain barriers and improving price transparency, he told reporters later his ministry will analyse the data before proposing any reforms to the current system.

Upscaling SMEs

Rafizi said improving the performance of the SMEs, which account for 97% of businesses in Malaysia, is another priority for the ministry this year.

He noted that while SMEs are the largest contributors to the economy, they often face challenges in scaling up talent and integrating.

During his engagement with stakeholders, he said government support sometimes fosters complacency in SMEs.

He proposed introducing early-stage government support to enable SMEs to build capacity and compete on their own.

“Some companies remain within the government ecosystem for decades without competing globally.

“We need to open up opportunities for more players and encourage them to grow regionally and internationally.

“If the barriers involve intellectual property or trade issues, the government can intervene. However, if companies remain reliant on government support, they will stagnate,” he said.