Pertubuhan Persaudaraan Pesawah Malaysia (PeSawah) said the current structure allowed a small number of companies to dominate padi purchasing and rice distribution, to the detriment of farmers.
“PeSawah urges the government to review the highly monopolistic structure of the industry. (The few firms) in padi purchasing and rice distribution limits farmers’ choices (of buyers) and suppresses prices,” PeSawah chairman Abdul Rashid Yob said in a statement.
“This structure should be gradually liberalised to create healthy competition that will ultimately benefit both farmers and consumers.”
While expressing appreciation for the RM2.62 billion in various agriculture subsidies allocated for farmers next year, Rashid said most of these funds would not reach farmers directly.
He claimed that only 30% of the padi price subsidy scheme reached farmers, amounting to just RM500 for every metric tonne of padi produced.
“The main beneficiaries are the vendors and agricultural input suppliers, not the farmers themselves,” he said.
Yesterday, Prime Minister Anwar Ibrahim said the RM2.62 billion allocated for various agricultural subsidies in 2026 would be the largest allocation for agricultural subsidies in Malaysia’s history.
Anwar also said the government will raise seasonal incentives for padi harvesting, ploughing and pesticide use, with each farmer to receive about RM4,300 per hectare in seasonal aid, up from RM3,790 previously.
Rashid said the industry needed comprehensive structural changes, particularly in establishing a fairer and more transparent mechanism to determine padi and rice prices.
He said PeSawah was ready to work with the government to implement structural reforms to ensure the sustainability of the industries and safeguard food security.
He also expressed disappointment that the cost of living allowance of RM600 per season for farmers waiting to harvest their crops was not included under the 2026 budget.
“The allowance was given in July 2023 and continued in 2024, but it was quietly removed in 2025,” he said.