How does the Padi Price Subsidy Scheme protect farmers?

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The Padi Price Subsidy Scheme Ensures Farmers Receive RM1,700 Per Tonne for Their Padi

The Padi Price Subsidy Scheme functions as a crucial mechanism to safeguard padi farmers' income by guaranteeing a minimum total purchase price for their harvest. This scheme, which provides a subsidy of RM500 per tonne, ensures that farmers ultimately receive RM1,700 per tonne for their padi, regardless of the price set by millers. This protection is particularly vital given the established floor price for padi.
Government Sets a Floor Price of RM1,200 Per Tonne

The government has maintained a floor price for padi purchases at RM1,200 per tonne since 2014. This establishes a baseline below which millers are not permitted to purchase padi from farmers. While manufacturers have the flexibility to offer higher prices, they are legally bound to adhere to this minimum threshold.
Subsidy Bridges the Gap to the Target Price

The RM500 per tonne subsidy acts as a direct incentive and income support for padi farmers. It ensures that even if millers purchase padi at the government-mandated floor price of RM1,200 per tonne, the total amount received by the farmer will reach RM1,700 per tonne. This mechanism effectively compensates for any discrepancy between the miller's purchase price and the desired income level for the farmers.
Protection Against Price Fluctuations by Millers

The scheme provides a vital layer of protection against potential price reductions by padi millers. In instances where millers might lower their purchase price to the floor of RM1,200 per tonne, the government subsidy ensures that farmers are not negatively impacted. This guarantee of RM1,700 per tonne, irrespective of the miller's offered price above the floor, provides income stability for padi farmers.

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How does the Padi Price Subsidy Scheme protect farmers?

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