Cameron Highlands farmers urge Putrajaya to review diesel subsidy criteria

FARMERS in Cameron Highlands are worried that the diesel subsidy rationalisation (DSR) programme will burden them as the government initiative seems to benefit only registered commodity smallholders.

They, however, said not all small-time farmers will benefit from the programme as they need to have a registered company to qualify for the subsidy, which most of them do not have.  

The farmers also questioned why only a certain group (independent farmers who are registered) can qualify for the subsidy and not all of them.

They complained that the criteria for the subsidy imposed by Putrajaya was not fair.

Putrajaya last week launched the Budi Madani Subsidy Aid Programme (Budi) for private owners of diesel vehicles and agriculture smallholders in Peninsular Malaysia.

According to Budi, farmers or smallholders whose companies are registered with the relevant agencies will receive the subsidies.  

They also must be an active commodity smallholder with an annual turnover of between RM50,000 and RM300,000 from farming or commodity production.

The Finance Ministry (MoF) had said all eligible recipients will receive RM200 monthly in financial aid as part of the targeted subsidy programme for diesel.

Cameron Highlands Chinese Farmers Association deputy president Cheng Nan Hong said they had a meeting with the authorities in April over the diesel subsidy.

“They told us that small farmers who have not registered with the Companies Commission of Malaysia will not receive the subsidy,” he told Vibes.

Cheng said that there are more than 2,500 farmers in Cameron Highlands and about 20% to 30% are small-time farmers who do not have registered companies.

Cheng said if a farmer earns less than RM300,000, one of the criteria for the fuel subsidy, but do not have a registered company, then they will not receive the subsidy.

“They are independent farmers with small plots of land growing their own crops to be sold to earn a living.”

He said that their association currently has about 400 active members.

On whether the DSR will affect the price of vegetables or fruits, the farmers said it is too early to tell.

They can only gauge the outcome after the subsidy has been implemented.

However, in Cheng’s view, prices could spike by 20% after the subsidy programme is implemented.

“Those who do not get the subsidy, their costs to produce fruits and vegetables will increase exponentially.”

He said diesel was crucial because all farmers rely on it to conduct their business – fuel their trucks, machinery, irrigation system, generators and others.

For example, he said most, if not all, farmers use a Hilux (4X4 truck) for their daily operations.

He said a rough estimate of fuel costs for one Hilux per month for the big players can be anywhere between RM1,000 and RM2,000 depending on operations, transportation of crops and other factors.

“As for small farmers, they spend about RM500 to RM1,000. So, if diesel prices increase, then their operation costs will also increase.

“They (authorities) have to know that we rely heavily on diesel. They should reevaluate the criteria for the fuel subsidy.”

He suggested that the agricultural ministry come down to ground and see what is happening here.

“How the farmers conduct their operations. We also hope that the government can look into increasing the subsidy to more than RM200.

“We also want them to relook the criteria for eligibility for the fuel subsidy.”

Review criteria for DSR scheme

Cameron Highlands Vegetable Growers Association secretary Chay Ee Mong believes the DSR is too insignificant for the industry.

He also said that limiting the subsidy to only those who are making sales of between RM50,000 and RM300,000 is unfair.

“They are categorised under the B40 group, so they are entitled to that. But we feel for the industry, it should be a higher (the amount to qualify for subsidy) margin.

“We are suggesting that it should be less than RM1 million for total turnover. RM300,000 is too little for the farmers.”

He said most of the farmers who do not qualify for the subsidy will be affected as their costs of input will increase when diesel prices go up.

“It will affect my input (production). We also got to understand that currently we are facing a food crisis. So, this might also affect our output.”

As for the farmers’ monthly expenditure on diesel, Chay said that it differs according to the size of the farms and the machinery used.

“For example, if it is a small farm less than three acres and if they use generators, machinery, trucks for farm production, their usage is about 400 to 500 litres of diesel per month. The current subsidised diesel price is RM2.15 per litre.

“As for the big farms, they have packing houses, hydroponic systems, pumps running at 24 hours. So, it could be 50% higher or more depending on how big their land is.

“We thought this subsidy would cover all farmers, no matter their net or gross income.

“But now they say the subsidy is only for the B40 category and most of us are not eligible for that.”

He said that the association had already highlighted this matter to the Agricultural Ministry last month.

“We believe that only about 20% of the farmers will be getting the subsidy while the rest will have to pay regular prices as they are not entitled for it.

“If the costs are too high to operate and not profitable, then some of them (farmers) might give up farming.

"Our input doesn’t solely rely on diesel, we also have staff wages, vehicle maintenance, fertilisers and many other essential items for farming.

“When production is less, the prices (vegetables and fruits) will go up, which will affect the industry,” he said, adding that currently they have about 800 members. – June 7, 2024.