AMPANG, Oct 17 — Tun Dr Mahathir Mohamad today said his government will consider a suggestion to return subsidies for smallholders instead of providing them with loans.
The National Smallholders Farming Association (PKPKM) had earlier urged the prime minister to reinstate the previous subsidy for replanting crops during its annual general assembly here.
“I was listening to the speech carefully and I heard the pleas and problems raised,” he said before delivering his keynote speech at the PKPKM congress here.
“We can consider and see what we can do. But this will depend on our ability and we would act accordingly,” he added.
The Pakatan Harapan administration had cancelled the cash aid policy earlier this year and instead disbursed loans to help smallholders cope during low seasons, seen as a way to nudge farmers into relying less on government cash handouts.
Association president Datuk Aliasak Ambia claimed in his welcoming speech that the new policy has put a strain on most farmers’ cash flow and pushed them into debt.
Under the previous Barisan Nasional administration, cash had been given away instead of lent as an allowance meant to help some 650,000 farmers offset losses in income in the event that commodity prices drop.
Independent farmers received as much as RM7,000 per hectare under the Palm Oil Replanting Scheme for Smallholders (TSSPK).
“Most of us are used to receiving assistance and this has helped many retain some revenue (under poor market conditions),” Aliasak said.
“Now that it has turned into a loan, farmers are struggling because they are saddled with debt.
“Farmers are finding it harder to earn,” he added.
But such a demand would likely bode poorly for the new administration’s plans to modernise a volatile sector that is seen as too dependent on handouts.
For decades, billions of ringgit have been poured into subsidising smallholders in the hopes that this would improve efficiency, increase yields and income for the 650,000 farmers who mostly remain poor until today despite the continued assistance.
Dr Mahathir made this concern apparent when he told some 1,000 PKPKM members here that they seemed content to rely on government subsidies.
“From what I gather it seems like it’s still the government that has to do everything,” he said.
“But what we want is for you to be able to stand on your own two feet.”
The PH rolled back the TSSPK subsidy under Budget 2019 and replaced it with a low interest loan scheme in what it said was a bid to foster independence among farmers and ramp up productivity.