Audit Report: Farmers’ subsidy and incentive scheme not managed efficiently

02 Dec 2019 / 15:34 H.

KUALA LUMPUR: The Farmers Subsidy and Incentive Scheme, which is implemented to increase the country’s rice supply, is not managed prudently, efficiently and effectively, according to the Auditor-General’s Report Series 2, 2018.

According to the report, there are weaknesses in the implementation of the farmer registration, awarding of subsidy and incentives to target groups, delays in claim payment by suppliers, delays in contract signing, issues on the quality of padi seedlings quality issues and delay in distribution of fertilisers.

These were among the findings of an audit conducted between January and August 2019 on the Farmers Subsidy and Incentive Scheme.

It was found that padi production for the years between 2016 to 2018 did not meet the annual target.

“The annual rice production dropped between 2.7 million metric tonne (1.4%) and 2.57 million metric tonne (8.5%) during the period. The average padi production during the period also did not meet the target,” it said.

According to the report, the drop was due to the decrease in the size of padi farming areas, poor quality padi seedlings and disease attacks on the crop.

However, the frequency of padi planting exceeded the target of 1.57 time at 1.75 time.

“The Agriculture and Agro-based Industry Ministry has set the target for self-sufficiency level (SSL) for 2016 to 2018 at 85%, 80% and 80%, respectively.

“The audit found that the target for SSL was not achieved, but showed a decline of 7.6% to 14.7% due to the drop in padi yield and production per hectare,” it said.

Overall, the auditor-general’s report concluded that the Farmers Subsidy and Incentive Scheme was not managed prudently, efficiently and effectively.

“This is due to poor internal control in the registration of farmers. This weakness caused leakage in the implementation of the scheme to the target group,” said the report.

It recommended the Ministry of Agriculture and Agro-based Industry to review the ePadi system to ensure that only those eligible are registered and to coordinate the management system with all the relevant agencies.

“The ministry also have to investigate issues on the awarding of subsidy and incentives to farmers who are now deceased or whose identity card numbers do not exist or are incomplete,” it said. - Bernama

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