LAWM 7400 LAW RESEARCH METHODOLOGY

STATEMENT OF PROBLEM

1. PROPOSED RESEARCH TOPIC :

“Unveiling the Allegations: Cartel Control and Price Manipulation

in Malaysia's Rice Industry”

2. BACKGROUND & THE IMPOTANCE OF THE PROPOSED RESEARCH

TOPIC :

a) The regulation of the rice industry, specifically the the Rice Control Act 1994
(Act 522) is crucial for ensuring a stable and secure food supply in Malaysia.

b) Any inefficiencies or manipulations in the industry, such as cartel practices,

can adversely impact the availability and affordability of a staple food like
rice.

c) A well-regulated rice industry contributes significantly to Malaysia's

economy as any issues related to cartel practices can distort market
dynamics.

d) Consumers benefit from a well-regulated industry where fair competition

ensures reasonable prices for rice.

e) Assessing the effectiveness of the Rice Control Act is vital for evaluating the
government's regulatory framework.

f) It helps determine if policy objectives are being achieved and if adjustments

are necessary to enhance the overall efficiency of the rice industry.

3. THE STATEMENT OF PROBLEM BASED OF THE PROPOSED RESEARCH

TOPIC :

a) According to Coalition of Rice Millers Malaysia, a handful of major

companies are involved in controlling padi mills, seed production, and
setting prices, allegedly disregarding government directives.

b) The existing system that offer padi companies to having multiple license
whether a padi mill licence and a seed production licence.
LAWM 7400 LAW RESEARCH METHODOLOGY

c) In 2023, Farmers particularly the 71,000 under the Muda Agricultural

Development Authority (Mada), who reportedly face losses of up to RM40
mil per season due to delayed cultivation caused by a shortage of padi
seeds.

d) Situation of fraud when it is announced that the price of imported rice is

getting more expensive and out of control, the cartel will convert the local
rice stock into imported rice.

e) Another of modus operandi of the cartel is that uses broken rice as local rice
as it could be sold at uncontrolled price.

f) However, the Agriculture and Food Security Ministry has denied allegations
of the existence of a cartel or mafia that controls prices of rice and padi
seeds in the country as the country's rice industry was regulated by the
Kawalselia Padi dan Beras (KPB) regulatory body through the Rice Control
Act 1994 (Act 522).

g) Therefore, the statement of problem is as follow:

“Whether the Rice Control Act 1994 (Act 522) effectively regulates
Malaysia's rice industry, specifically addressing allegations of cartel
practices in controlling padi mills, seed production, and the pricing of
paddy”

4. PROPOSED THE SOLUTION OF THE PROBLEM :

a) Review the Rice Control Act 1994 (Act 522) to identify areas that may
require amendment or enhancement to address the evolving challenges in
the padi industry.

b) Review and revise the existing licensing system to ensure that padi
companies cannot hold multiple licenses, thereby preventing concentration
of power and control.

c) Enhance the powers and resources of the Kawalselia Padi dan Beras (KPB)
regulatory body to effectively monitor and regulate the rice industry.

d) Collaborate with law enforcement agencies to ensure effective enforcement

of regulations and legal measures against entities engaging in cartel
practices.
LAWM 7400 LAW RESEARCH METHODOLOGY

5. SOURCES :

a) “Bahagian Pembangunan Industri Padi - KPKM,” n.d.

https://www.kpkm.gov.my/bahagian-pembangunan-industri-padi.

b) Rosli, Fahmy A. “'Tiada Kartel, Mafia Monopoli Industri Padi, Beras Negara'”
Berita Harian, January 4, 2024 .
https://www.bharian.com.my/berita/nasional/2024/01/1196261/tiada-kartel-
mafia-monopoli-industri-padi-beras-negara.

c) Bernama. “Ministry Denies Claims of Cartel, Mafia Controlling Prices of

Rice, Paddy Seeds.” NST Online, January 4, 2024.
https://www.nst.com.my/news/nation/2024/01/997395/ministry-denies-
claims-cartel-mafia-controlling-prices-rice-paddy-seeds.

d) Hashim, Roslinda. “Paddy Cartel Controls Industry - Sanusi.” Sinar Daily,

September 5, 2023.
https://www.sinardaily.my/article/207083/malaysia/national/paddy-cartel-
controls-industry---sanusi.