KUALA LUMPUR – A report by Parliament’s Public Accounts Committee (PAC) has revealed that national rice concessionaire Padiberas Nasional Bhd (Bernas) failed to channel a remaining RM25 million into its social obligation fund for 2021.
The report, which was made available on Parliament’s official website today, said the RM25 million consisted of RM5 million for a padi information system development fund and RM20 million for the national nutrient development fund.
“As of June 14, 2023, Bernas has not yet disbursed a balance of RM25 million from its RM37 million 2021 social obligation fund.
“The Agriculture and Food Security Ministry must enforce a remedy by demanding penalties related to the concession company’s failure to fulfil its obligations according to key performance indicators (KPI) set in the concession agreement.
“This includes, but not limited to, the failure to make the RM25 million social obligation fund payment within the specified time period.”
According to testimony from Auditor-General Datuk Wan Suraya Wan Mohd Radzi, the deficit had been noted in an audit by the National Audit Department into payments received and executed under the social obligation fund agreement between Bernas and the ministry.
“The audit was detailed in the 2021 Auditor-General’s Report and presented to the Dewan Rakyat on February 16, 2023. The department reported on three issues – how RM37 million for the social obligation fund had not been received by December 31, 2021.
“After a warning from the audit, the ministry received an obligation fund payment of RM12 million in the years 2022 and 2023. The remaining RM25 million will be paid by Bernas in stages,” she was quoted as saying during PAC proceedings on June 14, this year.
She added, however, that the concession agreement is “good” and can provide benefits to targeted groups, especially padi farmers, in line with policies to protect the country’s strategic industry providing rice supply.
In a parliamentary written reply yesterday, Agriculture and Food Security Minister Datuk Seri Mohamad Sabu dismissed speculation connecting price hikes in imported rice to the Tan Sri Syed Mokhtar Albukhary-owned Bernas’ monopoly of the rice industry.
Instead, he said the surge in prices was mainly due to a 60% increase in the international market price of imported white rice.
In March, Mohamad’s deputy Chan Foong Hin said the government cannot unilaterally cancel any contract to import rice into the country because it needs to consider the social obligations Bernas has agreed to implement.
The ten obligations include managing the country’s rice buffer stock, maintaining its role as the last padi purchaser at a minimum price and managing padi price subsidy payments as well as the scheme for millers, Bumiputera wholesalers and farmers’ cooperatives.
As part of its obligations, Bernas also has to allocate funds for the supply of machinery and padi mechanisation, the development of large-scale padi farms and provide allocations for several programmes, including the development of padi seed buffer stock, padi cultivation disaster fund aid and an information system on padi and rice.
Chan’s statement came after several parties had questioned the 10-year extension in 2020 of Bernas’ concession period as the country’s sole rice importer. – October 11, 2023