Abolish APs to put an end to cartel activities - Economic expert

KUALA LUMPUR, May 21 (Bernama) -- The abolishment of the approved permits (AP) for food products will indirectly end cartel activities in Malaysia, economic expert, Professor Emeritus Dr Barjoyai Bardai said.

He did not reject the possibility that a price war could occur in the market, but it was not something negative as it was needed to sustain demand from consumers.

“This is what is needed by the market today to avoid traders using wholesale or supply chains to manipulate prices as they have monopolies as they operate in cartels. So this is actually one way of getting rid of cartel activities in Malaysia,” he said when contacted by Bernama.

Barjoyai said the government’s decision to abolish APs for food products was a strategic step in the short term, but needs to be followed up with more concrete moderate measures in the long term.

This is because import activities will result in a drop to the ringgit’s value that will ultimately cause prices to rise, he said.

The government could implement initiatives such as import replacement programmes to overcome the problem, Barjoyai said.

“We need to begin pioneer projects immediately, such as planting vegetables, we coud encourage the use of kampung chickens as these do not require importing food products, for instance.

“For the long term, we need to emphasise on the food securty concept where we need to have the goal of having an agricultural industry to supply adequate food products for basis necessities, such as rice, cooking oil, vegetables, fruits and proteins.

“If this can be done, we can solve this problem in the long term as price pressures are mostly on basic necessities,” he said.

Prime Minister Datuk Seri Ismail Sabri Yaakob recently announced the government’s decision to abolish the need for APs for food products immediately to ensure that the country had adequate food supply.

Meanwhile, University Putra Malaysia (UPM) School of Business and Economics senior lecturer, Assoc Prof Ts Dr Anuar Shah Bali Mahomed said the government’s decision was timely and suited the current situation.

Besides helping ease import of products to the country and reduce monopolies, he said it would help Malaysians to start businesses.

At the same time, the government would need toement drastic policies to reduce the significant importation of goods from abroad.

“As long as we rely on imported goods, the problem will not be solved if a global food crisis occurs. For instance, wheat, there are countries that import over 40 per cent of wheat. When India stopped exporting wheat, many countries that relied on India sought other countries out, like Australia, from which Malaysia gets its supply.

“The second thing is our currency is weak currently. So there is a high possibility for the price of wheat to rise significantly. This situation happens because we import from abroad. So the price of all products using wheat will also rise because the price of wheat rises,” he said.

Immediate initiatives have to be taken by the government, including encouraging Malaysians to plant various vegetables on a large scale that can bring results in a short time, he said.

“When a severe food crisis does hit, at least we will have these vegetables among our food stocks,” he added.

-- BERNAMA