The increase in the market price of chicken has caused dissatisfaction among Malaysian consumers. In the two weeks since the beginning of Ramadan, the dramatic rise of chicken price has become a hotly discussed issue among consumers, traders and policy makers. Previously, the price of chicken was around RM7 per kg. Now, at the Jelutong Market for example, chicken price is between RM8 to RM9 per kg. The Consumers’ Association of Penang (CAP) has received more than 50 complaints from consumers regarding this issue.
According to media reports, the link between producers, intermediaries (distributors) and retailers is one determinant of the price of chicken. Farmers and traders insist they have no choice and must conform to the market price that is sensitive to price of chicken feed, transportation costs and the cost of labour. The shortage of chicken in the market has prompted some traders to increase prices at will. This ultimately affects and burdens Malaysian consumers who have chosen chicken as their main protein source.
The Ministry of Domestic Trade, Cooperatives and Consumerism (MDTCC) has proposed to import chicken, recommended that consumers boycott buying chicken, and would announce a ceiling price on August 1, 2013 (the price control for chicken is only during the festive season). The Ministry did not clearly state the causes of the rise in chicken prices that has caused panic among consumers. The issue of increase in the price of chicken is not new. It can be said to be an annual occurrence, repetitive, synonymous with the festive season. We urge the Ministry to find a solution that is consistent and benefits both consumers and producers.
Ceiling price of chicken announced on August 1, 2013
As in previous years, the Ministry has introduced the enforcement of the Festive Season Price Control Scheme under the Price Control and Anti-Profiteering Act 2011 (formerly the Price Control Act 1946). Under this scheme, a number of essential items (including poultry) are identified as price-controlled goods for the festive season at the maximum price set at different levels i.e. manufacturers, wholesalers and retailers in a given period. The scheme is implemented throughout Malaysia and the price set differs according to region and district. For this year, the Ministry will announce the ceiling price for chicken and other items on August 1, 2013. The question is, by learning from past experience on price hikes, why doesn’t the Ministry ease the burden of consumers by enforcing the scheme earlier, i.e. at the onset of Ramadan? Are the issues on the causes of price increase and measures to be taken to overcome this problem discussed annually only when consumers feel the burden and begin to complain?
The Act that protects consumers from sharp increases in prices of goods
The Price Control and Anti-Profiteering Act 2011 prohibits traders from profiteering and being unreasonable in the sale and supply of goods. Under the Act, profiteer means making profit unreasonably high. If convicted of the offence, action will be taken against the trader. In addition, the Minister responsible must establish a mechanism to address the issues of profiteering, to determine unreasonably high profit. CAP would like to get confirmation from MDTCC whether the mechanism is in place? If the mechanism is in place there is no need for the Ministry to wait until August 1, 2013 to enforce the price control scheme. If not, the parties concerned should justify why the mechanism has not been fixed? Is the issue of rising prices a trivial issue?
We are also aware of the role of the Price Controller as stipulated in the Price Control and Anti-Profiteering Act 2011. "The Controller may, with the approval of the Minister, by order published in the Gazette, determine the maximum, minimum or fixed price for the manufacturing, producing, wholesaling or retailing". CAP is confident that the mechanism developed by the Ministry would certainly work well with the help of the Price Controller.
The Price Controller's role would definitely be more effective if located in every district and every branch of the ministry and given the autonomy and authority to carry out operations and enforcement at the local level.
In addition, the Ministry should intensify cooperation with the Ministry of Agriculture and Agro-based Industry (MOA), particularly in addressing the issues of shortage and rising prices of goods during the festive season. MOA has provided an alternative to urge consumers to buy goods at the Farmers Market (FAMA - Federal Agricultural Marketing Authority). Prices here are reasonable. We also welcome the introduction of the 'Save Kitchen Expenses” programme. We believe that if both the Ministries cooperate from the beginning and consumers are provided information, consumers will not panic when there is a shortage and the price of chicken increases.
What, besides chicken?
Why is chicken the choice for all Malaysians? In the past, before the 1970s, chicken meat was quite expensive. Some families only ate chicken once a week or once a month. Those who were poorer only ate chicken during the festive season. Currently, chicken is a cheap source of protein when compared to fish, beef, lamb, etc. Chicken is also very inclusive, because it can be enjoyed by all races in Malaysia.
As we mentioned earlier, people's reactions show their annoyance and inability to face the sudden increase in the price of chicken. Consumers should be given more alternatives to choose food. At this time, the decision made by consumers is based on what is offered by the market, their budget, the price of substitute products and alternatives.
Communities should be encouraged to carry out small-scale farming including poultry rearing, and the government should provide assistance in terms of initial capital, land ownership, education and training. In addition, the government should rejuvenate the fisheries sector as the price of fish and marine produce are expensive, which also affects consumer choice in selecting protein sources besides chicken.
The issue of price hike of chicken and chicken shortage is just one part of a larger issue -- the management of food resources in Malaysia.
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SM Mohamed Idris is the President of Consumers Association of Penang (CAP).
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