In the wake of public outcry and dismay on the shrinking of Ringgit Malaysia and rising cost of living across the board, Prime Minister Dato’ Sri Mohd. Najib Tun Razak and his Cabinet is taking steps in moving the right direction.
15 January 2014| last updated at 05:16PM
Special committee to tackle rising cost of living set upBy Ahmad Fairuz Othman
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PUTRAJAYA: The government has set up a Special Cabinet Committee to tackle the cost of living faced by the people, and laboratory to identify ways to ease the people’s burden in relation to the matter.
Deputy Prime Minister Tan Sri Muhyiddin Yassin said the two measures, in addition to a directive by the Cabinet for ministers to ” go to the ground” to listen to grouses of consumers, were among the things that would strengthen current measures to cushion the impact of the rise in cost of living.
Muhyiddin, who would chair the cabinet committee, said it was an expansion of the National Key Result Areas (NKRA) task force on the cost of living, and it would act as the centralised body to handle issues pertaining to the hike in prices of goods.
“The committee will look into the rise of prices which has nothing to do with the fiscal consolidation measures, but is instead due to issues of market structure, including the issue of supply and marketing system.
“The Domestic Trade, Cooperatives and Consumerism Ministry will act as the secretariat and facilitating ministry in this special committee. Other relevant ministries and agencies such as the Finance, Agriculture and Agro-based Industry, Transport and others are appointed as special committee members to tackle the rising cost of living,” said Muhyiddin, when speaking to reporters at his office in Perdana Putra here today.
The Special Cabinet Committee will among other things, coordinate policy spanning ministries and agencies, cooperate with the Fiscal Policy Committee, conduct a sectoral study to trace the actual effect of the rise of input cost towards the cost of goods; engage with consumers, and related trade groups and NGOs; and step up enforcement.
The deputy prime minister said a laboratory, which began its task today for the next two weeks, would look into ways to ease the burden of the people.
“The laboratory will comprise those from consumer associations, industry players, academicians, students and others to provide input and views in tackling the rising cost of living.”Deputy Prime Minister Tan Sri Muhyiddin Mohd Yassin with Domestic Trade, Cooperatives and Consumerism Minister, Datuk Seri Hasan Malek and Minister of Agriculture and Agro-Based Industry, Datuk Seri Ismail Sabri Yaakob before the press conference on Special Cabinet Committee to tackle rising cost of living, at his office in Putrajaya today. — NSTP photo by Mohd Fadli Hamzah
Read more: Special committee to tackle rising cost of living set up – Latest – New Straits Timeshttp://www.nst.com.my/latest/special-committee-to-tackle-rising-cost-of-living-set-up-1.462950#ixzz2qYqySQB0
The rise of cost almost across the board ranging from energy (retail price of petrol, diesel, cooking gas and soon electricity tariff), toll rates and most importantly, too many grocery and food items.
Addressing all these is about Home Economics 101, at macro level.
The Special Cabinet Committee is expected to get PEMANDU to set up laboratories and bring in all the stakeholders together and look at the situational position, problem, issues and probable solution in the rise of prices of goods and services, which the rakyat is feeling clamping against them. Particularly in the matters pertaining production, wholesale, distribution and retail of food and grocery items.
Many retailers complain, the consignment price of these items for ordinary food market came at higher level. Scarcity arising from production, which is affected by weather and season is the retailers common blame.
However, these lab members should pay attention on the production of these items, either at farm or jetty (for fish and produce of the sea). The audit must be carried out, to determine the actually quantity produced.
There on, it is the series of wholesalers which provide the strategic distribution from the source to the distribution centres. It is believed that there exist a few oligopolists, which manipulated the consignment price of these items before the distribution cost is factored in.
This is the point where these food items are being marked up and a healthy margin is raked.
Then, the distribution channel. More logistics company should be appointed and be monitored directly, to ensure the distribution channel flow of these goods is seamless. It is the same maginitude and operation just like the oil companies employ. In the interiors of Sabah and Sarawak, the logistics channel should be immensely beefed up.
Finally, the cost at retail end. This is where the consumers have to face the reality of the rising price of common groceries such as chicken, fish, vegetables and fruits. The prices could be checked if the consignment price is lowered, due to wholesale price reduced or eliminated since the produce are supllied directly from source or more AP holders import them directly.
The wholesalers game is the typical cartel, in the market of any products. It is believed these cartels bully the producers, be it the famers or fishermen, where the price is often determined by them. This where food produce are hoarded and when demand exceeds supply due to scarcity, these cartels would start to release the stocks for the retailers.
This Special Cabinet Committee should look into these issues with these probable solutions:
- Treat the ‘Rationalisation of Rakyat’s Home Economy’ as a agenda of national importance and urgency, worthy of the setting up of National Economic Action Council (NEAC)
- A Special Task force created and answerable to the NEAC
- Reduce or do away with the wholesalers system. FAMA could play the lead role for it. Make it mandatory that these cartels do JV with SPVs created under FAMA, which would be monitored jointly by the Special Task Force consisting of Ministry of Agriculture (MOA), Ministry of Domestic Trade and Consumer (KPDNK), Unit Kerjasama-Awam Swasta (UKAS) and Implementation Co-ordination Unit (ICU)
- More APs are issued to existing food market chains, so that part of cartel system could be penetrated and broken
- The rationalisation and restructuring of subsidy for some essential goods amf staple food items, where more than 3 million foreigners in the country are enjoying this direct Federal Government subsidy and rebate
- Improve the logistics network and distribution channel
- Improve the retail channel. If the current municipal markets, pasar tanis, Kedai Rakyat 1 Malaysia (KR1M) system are not adequate, then create additional retail and distribution channels. Example is to utilise common retail outlets such as Petronas Mesra Shoppes and Pos Malaysia. Temporary shelters should be erected for the retail of grocery items within the vicinity of these outlets
- Provide credit guarantee to retail outlets, especially in the rural areas and kampungs
- MOA and KPDNK should organise a large scale campaign to provide consumers the idea for alternative protein, such as imported beef and buffalo, against the dependence on chicken and fish
- GLCs involved in plantations should be asked to go into livestock and poultry farming at industrial scale, as part of their cross diversity of produce
All of these programs should run co-currently and project managed.
Rising cost of everyday food and grocery items should be treated as “Desperate situation requires desperate measures”. They say “A hungry man is an angry man”. Reducing the hunger of so many people because the Ringgit Malaysia has shrunk is a good enough drive.
After all, when the rakyat at large no longer feel that their grocery bill have gone up and out of their means, then we see less of these “KFB” punts.