PETALING JAYA: The Malaysian Government will spend at least RM725mil (SGD309mil) to subsidise the import of 500,000 tonnes of rice.

Prime Minister Datuk Seri Abdullah Ahmad Badawi said in a statement that the move would help maintain the retail price of rice and alleviate the burden of consumers.

The decision was made by the Cabinet Committee on Inflation yesterday.

The committee also decided to implement five action plans to counter the rising price of rice and padi in the country.

Abdullah acknowledged that the escalating prices of rice in the global market had placed immense pressure on the prices of padi and rice.

"We have set a ceiling price for Super Special Tempatan 5% (with 5% content of broken grains), and Super Special Tempatan 10% at RM2.80 (SGD1.19) and RM2.70 (SGD1.15) respectively effective June 1 this year," he said.

"This is to implement a certain control on rice millers who prefer to produce these two grades of rice as their prices are not controlled by the Government.

"Prices of the two rice grades have also escalated because of this, invariably causing a shortage of the price-controlled Super Tempatan 15% grade," said Abdullah.

Abdullah said they would maintain Super Tempatan 15% as a controlled-price item costing between RM1.65 (SGD0.70) and RM1.80 (SGD0.76) per kilo..

He said they would also allow the prices of imported rice to float..

Abdullah added that the transfer of padi between states would be allowed and conducted in stages.

"The last action plan decided by the committee is to increase the guaranteed minimum price (GMP) from RM650 per tonne to RM750 per tonne.

"With the exception of the ceiling price for Super Special Tempatan 5% and Super Special Tempatan 10%, all the other measures are effective immediately," said Abdullah.

When met later, Domestic Trade and Consumer Affairs Minister Datuk Shahrir Samad said the move to spend RM725mil to import 500,000 tonnes of rice was to ensure there would be a healthy rice stockpile.

"There is no shortage (of locally-produced rice) but we are importing to make sure we have a stockpile. About 70% of our rice is locally produced," he said.

He added that the move to allow inter-state transportation of rice was to further free up the market and get rid of what was an antiquated system.

This article was first published in The Star on May 13, 2008.