‘Ending subsidies will reduce leakage’

KUALA LUMPUR: Subsidies and price controls for eggs will remain even though the government will remove the ceiling price for chicken starting tomorrow, says Datuk Seri Mohamad Sabu (pic).

The Agriculture and Food Security Minister said the decision to stop subsidising chicken took into account the current trend of supply and prices, which have started to stabilise.

“In line with the approach of retargeting subsidies in phases, the government has agreed that subsidies and price controls for chicken only will be fully terminated starting Nov 1.

“The rationale for ending subsidies in bulk for chicken is to reduce the leakage from subsidies, which at this point are also enjoyed by high-income groups,” he told a press conference at Lembaga Pertubuhan Peladang here yesterday.

The retail ceiling price for a whole chicken had been set at RM9.40 per kilo by the government since last year.

Mohamad said the government has spent RM100mil monthly on maintaining subsidies on chicken.

Cumulatively, it has cost the government RM3.8bil to subsidise eggs and chicken since February 2022.

Mohamad said his ministry, with the cooperation of the Domestic Trade and Cost of Living Ministry, will monitor the price of chicken to ensure it remains reasonable.

The Agriculture and Food Security Ministry has prepared intervention measures to deal with any surges in the price of chicken once the ceiling price is lifted, he added.

As such, the ministry is expanding the Jualan Rahmah and Madani Agro Sales programmes across the country to supply chicken at an affordable rate.

“We have met with industry players through an engagement session on Oct 22, and they provided their commitment that the price of chicken will not increase significantly,” he said.

Mohamad also advised the public not to panic buy once the subsidy is lifted tomorrow as an increase in demand will push the price up.

“We will be on standby to source out, by importing chicken when the need arises,” he said.

Mohamad also announced that the subsidies and price controls for Grades A, B and C eggs will remain according to the existing mechanism.

If the subsidies are lifted, the price of an egg will increase by around 10sen, he said.

Consumers usually purchase a tray of 30 eggs so it would mean an increase of RM3 per tray if subsidies are lifted.

“We will monitor the situation and make an announcement from time to time,” he said.

At present, chicken eggs are sold at the ceiling price of 45sen each for Grade A egg, 43sen for Grade B, and 41sen for Grade C.

On Oct 13, when tabling Budget 2024 at the Dewan Rakyat, Prime Minister Datuk Seri Anwar Ibrahim announced plans to lift subsidies for eggs and chicken as supply had stabilised and retail prices displayed were below the ceiling price.