Abstract for: Sustainability of Self Sufficiency Level of Rice in Malaysia under Trade Liberalization

Malaysia’s stance on food security is largely translated in terms of achieving self-sufficiency in rice production which is currently set at about 65-70% of domestic consumption. Since Malaysia does not have the comparative advantage in rice production, it implements a wide range of market interventions to achieve the intended level of rice production. The policy instruments include among others: a guaranteed minimum price for paddy, various cash and input subsidies to farmers and millers, and price control for rice. For the future, Malaysia needs to dismantle all the policy instruments to comply with the WTO agreement. This paper examines the influence of the fertilizer and cash subsidies, as well as land conversion and fertility on the level of self sufficiency in rice. A system dynamics model is applied to analyse the causal and feedback relationships of these variables in the paddy production system. The study shows that Malaysia may be able to sustain the targeted self sufficiency level with adequate investments in R&D to address the production constraints, particularly the low level of productivity. This is important as the consumption of rice is expected to rise due to the increase in population.