Too often, policy research on the paddy and rice industry in Malaysia focuses on the cheaper, medium-grained plain rice primarily produced in Peninsular Malaysia. Heirloom/specialty paddy cultivation in Sabah and Sarawak has received less attention. However, it holds the potential to spur the competitiveness of Malaysia’s paddy and rice industry. Several barriers remain before we can witness the rise of the next ‘Musang King’ of the country. This report seeks to shed light on the significance of the paddy and rice industry in Sabah and Sarawak and to provide policy recommendations where appropriate.

1. The Paddy and Rice Industry
of Sabah and Sarawak:
Status and Potential
*Images of several paddy varieties found in Kg
Katagayan, Sabah taken by Dr Januarius Gobilik

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TABLE OF
CONTENT
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1. STUDY BACKGROUND
2.
KEY FINDINGS FROM CHAPTERS
i. Status of Food Security in East Malaysia
ii. Rice Cultures in East Malaysia
iii. Characterizing Paddy Varieties in East Malaysia
iv. Paddy & Rice Acts & Regulations
3. CONCLUSION & POLICY RECOMMENDATIONS

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ABOUT THE RESEARCH
Authors Reviewers
Dr Sarena Che Omar
Nik Syafiah Anis
Dr Teoh Ai Ni
Khoo Wei Yang
Prof. Dr Abdul Hamid
Dr Januarius Gobilik
Prof. Dr Shaufique
Dr Elena Gregoria
Dr Chee Foong Tyng
Assoc. Prof. Dr Zahira

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Relevance to Dasar Agromakanan Negara 2021-2030
4
Second strategy is most relevant which aims to develop the specialty rice segment to give farmers more
options in terms of varieties to plant.
The 5 Main Strategies for the Paddy and Rice Sector
1.0. Boosting
productivity through
better management on
land usage and water
2.0. Leverage on the
potential of local
specialty rice varieties
4.0 Promote, encourage,
train and nurture the young
generation to be involved in
the paddy and rice sub-sector
5.0. Involve more
participation of private
sectors along the value
chain
3.0. Restructuring the
existing fund assistance
towards empowering
manufacturers to make
decisions

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Objectives
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Improve the paddy industry’s competitiveness
& good agricultural practices;
Leverage on the potential of traditional paddy
cultivation in East Malaysia;
Generate a business-friendly environment
for enterprises in East Malaysia by updating
policies and regulation
01
02
03

6. Engagements and Focus Group Discussions
Government
agencies
MARDI Sabah &
MARDI Sarawak
SEs/ NGOs/ MSMEs
Farmers
131
Stakeholders
engaged
DOA Sabah

7. 2
3
4
6
7
Multidisciplinary Approach
C
H
A
P
T
E
R
S
5
Paddy and Rice Statistics in East Malaysia
 Industry Statistics
Status of Food Security in East Malaysia
 Food Security
Rice Cultures in East Malaysia
 Anthropology
Characterising Paddy Varieties
 Plant Science
Understanding Act 522 and its Legislation
 Regulatory

8. Study Limitations
8
This report does not aim to conduct an in-depth market study or cost analysis
on the sale of specialty rice.
This is not a market study
01
02
03
Limited physical engagements. If it was done, eg focus group discussions
(FGD), conducted under strict standard operating procedures (SOP)
compliance.
Limitations due to Covid-19
The report does not aim to address matters related biological Acts and
regulations related to the movement of live plants and processed food in and
out of East Malaysia.
Does not aim to address overall regulatory challenges

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High-Yielding Modern Varieties
Heirloom
Modern
varieties
Maria,
MRQ 98
Pulut
varieties
 Medium grained plain white
rice: MR219,
 Higher yield potential (>15Mt/Ha)
 >90% of Malaysia’s rice
production
 Cheaper, with a price ceiling of
RM2.60/kg (SST5%)
 Keywords: Self-sufficiency,
supply, price, food security
Specialty
Definitions
 Various grain sizes, tastes,
colours, and textures: Bajong,
Biris, Adan, Tadong, Selasih,
Keladi
 Lower yield (<5Mt/Ha)
 <10% of Malaysia’s rice
production
 Higher value RM5-22/kg
 Keywords: traditional, hill rice,
heirloom
Heirloom

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CHAPTER 3:
Author: Nik Syafiah Anis
STATUS OF FOOD SECURITY IN EAST
MALAYSIA

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Role of Specialty Rice for Food Security Beyond Self
Sufficiency
Increase rice supply, self-sufficiency
Availability
Improve farmers’ income, increase
physical accessibility to rural communities
Accessibility
Improve diet diversification through
improved income (farming household)
Utilisation
Food Security
Self-sufficiency level
(SSL)
The extent to which a
country can satisfy its food
needs from its own
domestic production.
Sustainability
Promote Good Agricultural Practices
(MyGAP) & sustainability in paddy farming

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Food Security Significance – Poverty Limits Access to Food
Source: DOSM (2021)
Food Security
 A high percentage of
households fall below the
Poverty Line Income.
 Engel’s law: Proportion of
income spent on food increases
as income decreases.
 Food consumption expenditure for
East Malaysia is higher compared
to the national average.
Poverty and Household Food
Consumption
1.7
3.3
5.9 6.1 6.5
8.4 8.8
9.9
11.4 12
12.7 12.9
21.2
25.3
14.3
15
16.9
18 18.4
17.3
21
22.7
19.6
22.3 22 22.5
25.6
23
0
5
10
15
20
25
30
0
5
10
15
20
25
30
Selangor
P.
Pinang
Johor
Melaka
N.
Sembilan
MALAYSIA
Pahang
Perlis
Perak
Terengganu
Kedah
Sarawak
Kelantan
Sabah
Household
food
consumption
expenditure
(%)
Incidence
of
absolute
poverty
(%)
Incidence of absolute poverty Household food consumption expenditure
MALAYSIA
Incidence of Absolute Poverty and Household Food Consumption Expenditure in Malaysia by
State, 2020

13. Food Security Significance – Highest Rice Consumption
Food Security
Source: DOSM (2020)
Rice
consumption
expenditure
Sabah
RM 60/
month
Ntl. Avg.
RM42/
month
Sarawak
RM 56/
month
0.68 0.72
0.8 0.8 0.83
0.89 0.93 0.94 0.95
1.02
1.33 1.36
1.63
2.15
0.0
0.5
1.0
1.5
2.0
2.5
Selangor
P.
Pinang
Melaka
N.
Sembilan
Johor
Perlis
MALAYSIA
Perak
Terengganu
Pahang
Kedah
Kelantan
Sarawak
Sabah
2.5%
MALAYSIA
Household Monthly Mean Rice Consumption Expenditure by State, 2019

14. High Prevalence of Malnutrition in East Malaysia
14
Food Security
Potential of specialty rice in reducing prevalence of malnutrition is under-researched
Source: DOS (2018)
 Income and rurality of
households might limit a
child’s access to nutritious
food, leading to
malnourishment.
 There might be health
benefits of traditional rice,
but it is an area that is under-
researched.
 One study showed that Bario
rice has a lower Glycemic Index
than normal rice. Other
nutritional studies for
indigenous rice are done
overseas.
0.4
0.9 1.1 1.3 1.3 1.3 1.4
2.1 2.2
2.6
3.3 3.4
4.5
0
0.2 0.1
0.2 0.2 0.2
0.3
0.3 0.2
0.5
0.3 0.8
0.8
0
1
2
3
4
5
6
Johor
Selangor
Kelantan
Kedah
P.
Pinang
Terengganu
Perlis
N.
Sembilan
Melaka
Sabah
Perak
Pahang
Sarawak
Moderate Severe
6%
Sabah
Sarawak
Prevalence of Moderate and Severe Child Malnutrition in Malaysia, 2018

15. Breaking The Cycle of High Prevalence of Malnutrition
through Specialty Rice
15
Food Security
Malnutrition
/Poverty
Cycle
Improved production of specialty rice
Improved marketing of specialty rice
Improved farmers’ income
Diversification of daily diet
Reduced prevalence of malnutrition
Higher specialty rice yield through
cooperation with enterprises, NGOs and
local authorities.
Marketing to Peninsular Malaysia and
overseas through intervention from
enterprises and NGOs.
Originally for subsistence, the excess
harvest can be sold for added income.
Farmers’ income can be improved
through fair trade from intermediary
marketing organisations.
Diversification of diet in
households through existence
of disposable income.
Consumption of various
macronutrients and micronutrients
reduces the prevalence of
malnutrition.

16. Existing Good Agricultural Practices through Specialty
Rice Farming
16
Food Security
Only 71 paddy farmers in East Malaysia have MyGAP certification.
Possible undocumented sustainability practices among
East Malaysian farmers
Introduction of improved farming practices through
NGOs & Enterprises
Agroecology has been synonymous with indigenous
communities for decades
Usage of heirloom varieties, seed-saving method, and soil
conservation measures.
Through companies like Forever Sabah, Langit, WWF, Ceria Group

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Author: Khoo Wei Yang
CHAPTER 4:
HISTORICAL DEVELOPMENT AND RICE
CULTURES OF EAST MALAYSIA

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Historical Developments
Pre-modern  Native groups engaged widely in subsistence farming of rice, both dry
(padi bukit) through shifting cultivation, and wet (padi sawah) in settled
permaculture.
 Rice farming organized lifeways of indigenous societies, informing their
values and beliefs.
Colonial  Urban dependence on imported rice supply.
 Agricultural development geared towards commercial crops for the
colonials.
 Rice crisis 1919-1926: Rice shortages prompted government to redress
self-sufficiency issues.
Modern  SSL-focused policy targets favoured high-yielding irrigated wet paddy
farming, with indigenous paddy crowded out by commercial crops.

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Historical Developments
Pre-modern  Native groups engaged widely in subsistence farming of rice, both dry
(padi bukit) through shifting cultivation, and wet (padi sawah) in settled
permaculture.
 Rice farming organized lifeways of indigenous societies, informing their
values and beliefs.
Colonial  Urban dependence on imported rice supply.
 Agricultural development geared towards commercial crops for the
colonials.
 Rice crisis 1919-1926: Rice shortages prompted government to redress
self-sufficiency issues.
Modern  SSL-focused policy targets favoured high-yielding irrigated wet paddy
farming, with indigenous paddy crowded out by commercial crops.

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Historical Developments
Colonial  Urban dependence on imported rice supply.
 Agricultural development geared towards commercial crops for the
colonials.
 Rice crisis 1919-1926: Rice shortages prompted government to redress
self-sufficiency issues.
Pre-modern  Native groups engaged widely in subsistence farming of rice, both dry
(padi bukit) through shifting cultivation, and wet (padi sawah) in settled
permaculture.
 Rice farming organized lifeways of indigenous societies, informing their
values and beliefs.
Modern  SSL-focused policy targets favoured high-yielding irrigated wet paddy
farming, with indigenous paddy crowded out by commercial
crops.

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Production of paddy by type 1963-1999
0
20
40
60
80
100
120
140
160
1963 1966 1969 1972 1975 1978 1981 1984 1987 1990 1993 1996 1999
Sabah
'000 MT
0
20
40
60
80
100
120
140
160
1963 1966 1969 1972 1975 1978 1981 1984 1987 1990 1993 1996 1999
Sarawak
'000 MT
Historical Developments: Modern Era
Source: Yearbook of Statistics Sarawak (various years); Yearbook of Statistics Sabah (various years)
1. Under self-sufficiency policies, wet irrigated paddy production showed substantial growth.
2. Nonetheless, production levels remain lower than West Malaysian rice bowls.
Caveat: Dry paddy is used here as a proxy of traditional rice farming, but native groups were known to grow wet paddy, esp in Sabah.
Wet paddy production
Dry paddy production
Wet paddy production
Dry paddy production

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Cultural Significance of Rice
Iban
Freeman(1970); Sather(1977)
Kelabit
Janowski (1991)
Lun Bawang(Murut)
Deegan(1978)
Dusun
Williams(1965)
Dusun
ElizabethGimbad(2020)
Bidayuh
Geddes(1954)
Kenyah
FrancisJana Lian(1987)
Kadazan
HanafiHussin (2008)
Paddy type
Dry rice
Wet rice
Wet rice, Dry rice
“…following death, the human soul, after a
time in the otherworld (sebayan),
eventually turns to dew (ambun) and, as
dew, falls to the earth in the early hours of
the dawn where it is taken up by the
growing rice plants.”
Sather. 1980. ‘Symbolic Elements in Saribas Iban Rites of Padi
Storage’

23. Cultural Significance of Rice
 Integral part of pre-Christian animic
worldview
 Rice is given an enspirited character – inform
the relationship of human life to the world.
 Establishes how human ought to conduct
themselves in interaction with nature, often
with deference and respect.
 Modernisation may have changed some belief
practices, but rice remains an important part
of Bornean identity.
Rice is embedded with social values Rice within worldview
 Subsistence farming organized by household
units.
 Inform ethics, values, kinship.
 E.g., Iban work-groups ‘bedurok’ embody
organized labour that emphasize family unit.
 Kelabit practice of ‘kuman peroyong’ (eating
rice together) reinforces communal
identification.
 Rice as a measure of prestige, the ability in
making, managing of rice fields, and dispense
of rice highly prized.

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Generational
practice
Identity
Added
source
income and
food
Preference
in taste
profile
Some observations of our case
study
 Most respondents carried on
rice farming as a generational
practice.
 Majority noted preference of
taste
 Majority involve some form of
religious practices in rice
farming (Christianity). Many has
shed animistic rituals.
Four main reasons of rice farming:
Anthropology
Cultural Significance of Rice

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Chapter 4
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To local farmers, rice cultivation holds
value beyond the calorific and the
economic

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Authors: Dr Sarena Che Omar (KRI), Prof. Dr Abdul Hamid & Dr Januarius Gobilik (UMS)
CHAPTER 5:
CHARACTERIZING PADDY VARIETIES IN
EAST MALAYSIA

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Why is it important to characterize and identify?
Naming groups of individuals, discerning their relationships
and ancestry
Understand ancient human history
Enables informed breeding activities
It also gives us an idea of how ‘special’ a local crop is

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Plant Science
1. Genetic (DNA) - recent
2. Morphology (shape) -
classical
Two ways to
characterize and
identify

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Over many decades, groups of the same organisms move to different locations and change/adapt to
that location, becoming different
Concept of Genetic Diversity
S
S
S
S
S
S
S
S
S
S
s*
S S
S
S
B
S
C
S
S
Plant Science

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Over many decades, groups of the same organisms move to different locations and change/adapt to
that location, becoming different
Concept of Genetic Diversity
S
S
S
s* S
B
S
C
S
S
Plant Science
Location A
Location B
Location C
Location D
S
S
S
S

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History of Oryza sativa (paddy)
Oryza
Millions ago in
Gondawaland
20 wild
species
O. glabberima
(African rice)
O. sativa
(Asian rice)
Domesticated ~2,000
years ago
Domesticated 13,000
years ago in Yangtze
river, China?
Japonica (Sushi, Bario Adan)
Indica
(Thai Jasmine, Basmati, MR219)
Aromatic
Aromatic
Hotly Debated
Who came first?
Aus
Aromatic

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Representative samples
Cluster 1 & 2 Chelum
Bubuk Wangi
Wangi
Boria
Mamut
Kuduk
Bukit Wangi
Rotan (B)
Selasih (T)
Sabak
Serendah
Kuning
Bario Halus
Empawah
Merah
Lemak
Suratani
Tajol
Cluster 6
Adan Sederhana
Cluster 5
Cluster 4
Buntal Pulut
Kuning
Lebat
MR219
Rotan (D)
ARCII
Lasak
Chelum Halus
Muyun
Kanowit Merah
Ukong
Silah
Hitam
Palang
Sebuti
Cluster 3
Genetic Diversity in Sarawak
Source: Wong et al (2011)
Empawah
Buntar
Secasan Putih
Selimau Merah
Rotan Wangi
Tulang
Sampangan
Bajong Wangi Biris
Raden
Tembakau
Selasih
(RO)
Kanowit
Plant Science

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Two ways to
characterize and
identify
Plant Science
1. Genetic (DNA) - recent
2. Morphology (shape) -
classical

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Key Morphology of Paddy Plants
Root length
Plant height
Grain colour & texture
Panicle length
Paddy
Morphology
The study of size, shape, and structure
of rice plants and of the relationships of
their constituent parts.
Classic
Used for plant identification and
classification
Used in breeding for better rice
production/resilience
Modern
Examples of important traits:
- Roots (longer: drought advantage)
- Panicle length (longer: more grains)
- Grain traits based on consumer preferences: long/short,
fragrant, non-sticky/glutinous, and white/pigmented.

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Source: Dr Januarius Gobilik
Examples of the Agro-Morphology of Paddy Plants
in Sabah
Plant Science
Long Panicle vs. Short Panicle
Grain pigments

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• Sabah and Sarawak are thought to have hundreds to thousands of varieties
• Efforts have been in place to collect and identify these varieties, examples:
a) An online database developed by MARDI called ‘Agrobiodiversity Information System’
b) State-level efforts such as the certification of Bario rice
c) Research collaborations between the state departments, MARDI and Universities
• Despite these efforts, there is still work to be done. We still don’t know how many unique varieties are
out there
• Less than 25% of the varieties submitted into the above database, have >50% information on agro-
morphological traits.
Paddy Morphological Studies: Challenges
Plant Science

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Paddy Morphological Studies: Challenges
Source: Dr Januarius Gobilik’s collection
• Confusion with the use of vernacular names (e.g., Padi Keladi Putih (white seeds) Vs. Padi Keladi
Merah (red seeds), see Pictures; both aromatic, emit Keladi/Yam odour)
• Risk of loosing these varieties due to on-field cross-fertilisation if the ‘mother’ seeds are not
stored in a gen bank (next page)
Padi Keladi Putih Padi Keladi Merah

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Unintended Cross-Fertilisation: A Threat
Source: Dr Januarius Gobilik (2022). Location: Kampung Katagayan, Tambunan, Sabah
Different varieties grown in close proximity risk cross-fertilising, thereby risk loosing the genetic purity
and the unique identities. We need to collect and save these seeds urgently
Photo
Tadong
Keladi Merah
Tamparuli
Mahsuri
“Bila saya tanam padi pulut dan adan
bersebelahan, saya dapati hasil
anak benih ada sifat campuran”
KRI-interviewed farmer
Observations from KRI field trip:
 Seed exchange is common among
farmers from different communities.
 Many varieties are grown together,
risking cross-fertilisation and loosing
the genetic purity of the varieties.

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Few major varieties, with
medium-grained Beras pulut
dominating
Variety >500
Complete
Characterisation and
Certification
In progress
MARDI Seed Bank In progress
Formal nomenclature
39
Paddy Variety Comparison
Plant Science
Peninsular Malaysia Sabah & Sarawak

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Chapter Key Takeaways
Preliminary genetic and morphological studies suggest that local paddy varieties in
East Malaysia are genetically and morphologically diverse. However:
Plant Science
There remain cultivars or varieties that are not fully characterised and/or
recognised (Expedite coordinated efforts and more resource allocation to State
Departments/MARDI/Universities)
Several vernacular names could refer to the same varieties, causing confusion
and identity issues (Expedite coordinated efforts and more resource allocation
to State Departments/MARDI/Universities)
The storing and preservation of as many varietal seeds as possible, are
critical (take advantage of IRRI, MARDI Gen Bank, Biodiversity Centre)

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Authors: Dr Sarena Che Omar, Dr Teoh Ai Ni, Nik Syafiah Anis
CHAPTER 6:
ACTS & REGULATIONS

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Malaysia’s Dual Paddy Industry
 RM1.65-2.60/kg (ST15, ST10, ST5)
 High volume, price ceiling
 Shot maturity (100 days)
 Modern varieties by MARDI
 Seeds: Formal - Paddy Seed
Certification Scheme
 Valued at RM 3.3 billion
1,517,394 MT (90.4%)
Cheaper, high-yielding
medium grain rice
The industry is dual, but the Acts, regulations and legislations are one-sided: for the protection of cheap
domestic rice
Sources: Perangkaan Agromakanan (2021), KRI Reports (2019 and 2022)
Acts&Regulations
 RM5-22/kg
 Low volume, premium price
 Long maturity (3-6 months)
 500-1,000 traditional varieties
 Seed: informal, heirloom
 Valued RM 3.1 billion
< 142,333 MT (<9.0%)
Specialty, premium,
lower yielding rice

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Traditional Specialty Rice Right Now
Source: Pn Salmah, ex Director of IADA Kota Belud
Markets/Tamu in Kota Belud
RM 10/kg

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The Potential
RM 22/kg RM 19.50/kg RM 19/kg
• Enterprises and NGOs can help rural farmers benefit more from their heirloom rice with improved
farming practices and branding.
Higher value &
quantity
Higher net-returns
=

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Is It an Impactful Relationship?
Sources: KRI engagements, Langit and Forever Sabah
Key Findings of KRI’s Stakeholder Engagements
 >90% of KRI respondent farmers sell ~20-50% of their harvests
 Experience challenges in selling their produce
 An entity can work together to introduce good agricultural practices (thereby increasing yield = better income)
 And help market their products
Forever Sabah (2020 – current)
Tuaran, Sabah
 Household paddy valued at RM 8,485/season
(652kg x RM13/kg).
 72% of households achieved more than a year’s
supply of rice
 Those that decided to sell some, earn RM2,350
per season.
 Rice brand ‘Wagas Dati’ sold for RM 17/kg
Langit (2016 – current)
Long Semadoh, Sarawak
 Subsistence farmers earn an extra RM2,400
per season, previously they don’t sell (it is at a
loss)
 Langit brand sold for RM22/kg
 They ‘audit’ and procure only from farmers that
practices chemical fertiliser & pesticide-free
farming

46. Conventional vs Specialty Rice Supply Chain
Conventional supply chain:
many big players in each
segment
Speciality rice supply chain:
small players managing along
the supply chain.
Acts&Regulations
Trade – IMPORT (~800,000 Mt)
Conventional Paddy & Rice Supply Chain
Input Farming Milling Wholesale & Retail Consumer
~2.7m Mt paddy ~15,000Mt paddy/mill/season 32m local consumers (~2.2m Mt)
Consumer
Heirloom Paddy & Rice Supply Chain (East Malaysia)
Wholesale & Retail
Private
Milling
Direct sales to consumers
Trade - EXPORT
Up to 1000Mt paddy
Small –scale
Farming with
NGOs/SE

47. Paddy and Rice Acts
47
Acts&Regulations
INPUT & R&D PRODUCTION
(FARMING)
PROCESSING
(MILLING)
WHOLESALE STOCKPILE &
IMPORT
RETAIL & CONSUMER
Pesticides Act 1974 (Act 149) MAFS
Plant Quarantine Act
1976 (Act 167)
MAFS
Protection of New Plant
Varieties Act 2004 (Act
634)
MAFS
Irrigation Areas Act 1953
(Act 386)
MEWA
Padi Cultivators (Control
of Rent and Security of
Tenure) Act 1967 (Act
793) (Revised 2017)
KeTSA
Lembaga Padi dan
Beras Negara
(Successor Company)
Act 1994 (Act 523)
MAFS
Acts Directly Relevant to the Paddy and Rice Industry
Acts Indirectly Relevant to the Paddy and Rice Industry
Control of Padi and Rice Act 1994 (Act 522) MAFS
Food Act 1983 (Act 281) MOH
Environmental Quality Act 1974 (Act 127) MEWA
Road Transport Act
1987 (Act 333)
MOT
Factories and
Machinery Act 1967
(Revised 1974)
(Act 139)
MOHR
Consumer Protection
Act 1999 (Act 599)
KPDNHEP

48. Purchase
Milling
Wholesale
and retail
Import and
export
Interstate
movement
The Control of Padi and Rice Act 1994 [Act 522]
48
Acts&Regulations
Control Of Padi and Rice (Licensing Of Padi Purchasers) Regulations 1996
(P.U.(A) 625/1996)
Control of Padi and Rice (Licensing of Wholesalers and Retailers) Regulations 1996
(P.U.(A) 624/1996)
Control of Padi and Rice (Licensing of Rice Mills) Regulations 1996
(P.U.(A) 626/1996)
Control of Padi and Rice (Licensing of Importers and Exporters) Regulations 1994
(P.U.(A) 264/1994)
Control of Padi and Rice (Restriction of Interstate Movement) Regulations 1997
(P.U.(A) 31/1997)
Need working
capital up to
RM200,000/
3 months
Sole importer,
no export
Permit required
for movement
of rice
Act 522
Regulate paddy and rice activities in Malaysia, to protect the supply
and price of rice for national security reasons

49. Regulatory Challenges for the Specialty Rice
Segment
1
2
3
A dual industry with a one-size-fits-all regulation
Consequence
Specialty rice is grouped under the general food security rice agenda.
Acts&Regulations
Consequence
A disabling business environment for the artisanal/specialty segment.

50. Khazanah
Research
Institute
Khazanah
Research
Institute
“Act 522 is an important act to protect the supply and prices of rice in
Malaysia, particularly for the cheaper medium-grained white rice.
However, protective measures, while safeguarding rice supply and
prices, do not mean that it is suitable for competition,
commercialisation, and export growth of specialty/premium rice.
These are two different (yet important) objectives requiring separate
policies and regulations.
Chapter 6
“
We must carve out a segment in Act 522 for
specialty/premium rice

51. Regulatory Challenges for the Specialty Rice
Segment
4
5
6
High working capital
Working capital of RM 100,000-200,000 for license application which is difficult for
micro and small enterprises due to limited financial capabilities.
Restrictive Interstate Movement Process
Non-digitalised permit application process for interstate movement of rice between
Peninsular and East Malaysia prolongs the transport process.
Tedious Export Process
Export is not allowed. For special approval, it involves a lengthy approval process from
multiple entities.
Acts&Regulations

52. Khazanah
Research
Institute
Khazanah
Research
Institute
52
CONCLUSION &
POLICY RECOMMENDATIONS

53. Summary of Observations
Nomenclature and Seed Preservation in East Malaysia
01
 Informal paddy nomenclature, different names by different communities for the same variety.
 Heirloom varieties are candidates to breed climate and disease-resistant traits that the
nation requires.
 Risk of losing genetic purity of these precious varieties due to cross-breeding.
 Breeding R&D will remain inefficient as long as seeds are not saved and characterised.
One-Size-Fits-All Approach to Paddy and Rice Regulations
02
 No distinction between cheap medium grain rice for food security, and premium rice for
commercialisation purposes in Act 522.
 This creates a disabling business environment for the commercialisation of specialty rice

54. Policy Recommendations
Expedite the characterization and formalization of all local varieties,
establish seed banks and certification schemes, on top of SSL, measure
performance by exports and MyGap farms.
State
Acknowledge the dual industry.
Formally recognize the difference between cheap rice for food supply, vs rice
varieties for commercialization and export.
Federal
Update Act 522 and its subsidiary legislations to be business-friendly
by carving a section for the premium rice category:
i. Allow export of specialty rice
ii. Transportation of premium rice across states without permit
iii. Removed/reviewed subsidies & incentives for premium rice growers (export)
iv. Lowered required working capital for micro and small enterprises
Act 522

55. Khazanah
Research
Institute
Khazanah
Research
Institute
The Framework for Specialty Rice Segment in Sabah &
Sarawak
55
KRI
 Research on heirloom paddy industry
 Policy recommendations
 A source of information
Farmers & Paddy
Cultivation
 Extension - Good Agricultural
Practices (MyGAP)
 Marketing & Branding - Aid in
adding market value to specialty
rice
Source of information
NGOs, micro, small
social enterprises
 National rice and paddy Acts and
regulations
Federal Government
Prescriptive policy
suggestions
 Local seed characterization and
certifications in cooperation with
MAFS/MARDI/Universities
State Government

56. Khazanah
Research
Institute
Khazanah
Research
Institute
THANK YOU
56

57. Khazanah
Research
Institute
Khazanah
Research
Institute
57

58. Khazanah
Research
Institute
Khazanah
Research
Institute
58