PETALING JAYA: The overall operating cost for farmers nationwide may finally stabilise with the newly introduced Budi Madani Diesel (Budi Diesel) programme, say industry players.
The programme, announced by Finance Minister II Datuk Seri Amir Hamzah Azizan on Monday, will provide a basic quota of 200 litres of subsidised diesel at RM2.10 per litre.
Federation of Vegetable Farmers Associations president Lim Ser Kwee said the subsidy would stabilise farmers’ operating costs by reducing financial pressure from volatile fuel price fluctuations.
“Many agricultural businesses use diesel to power their machinery, water pumps and generators, as well as for transporting produce. So this subsidy will definitely have an effect.
“However, the actual effect depends on whether the approved quota meets actual needs,” he said.
Lim said the actual operational savings will vary, depending on farm size and transportation needs with smaller farms seeing lower savings due to less usage.
He said the subsidy would also likely have a minor effect on reducing vegetable and produce prices in the country.
“Vegetable prices are affected by many factors, including weather, yield, market supply and demand, labour costs, fertiliser prices and transportation costs. Diesel is just one cost item.
“Even if diesel costs decrease, other production costs remain high, so a significant price reduction may not be seen in the short term,” he said.
Durian Manufacturers Association president Eric Chan Yee Hong welcomed the new subsidy, stating it would help ease the losses endured by agriculture industry players.
“We use a lot of diesel-powered pumps and pick-up trucks in our industry, so this subsidy will be an essential lifeline for us to keep up with rising costs caused by the ongoing crisis.
“However, we do not expect this subsidy to lower our produce selling price by much since we did not really increase the selling price proportionately with the fuel crisis for the sake of consumers,” he said.
Natural Farming Association Malaysia secretary Tan Hong Boon said the subsidy will likely provide the most financial benefit for smaller farms.
“Some smaller farms saw their monthly diesel expenses triple due to the supply crisis, so this subsidy should have the biggest impact on them.
“For larger agricultural operations that go through well over 200 litres monthly, this new subsidy will likely not lower their produce prices much, especially since fertiliser prices remain high,” he said, urging the government to consider initiatives to bring down the price of fertiliser.
