Malaysia's Padi and Rice Industry

Every time rice prices rise or supermarket shelves run empty, an old question comes back to haunt Malaysia: why does a country so rich in padi fields still need to import nearly half its rice? The answer lies in an industry driven by subsidies, protected by guaranteed prices, and chased by a self-sufficiency target that has yet to be reached.

Rice is not just a staple food — it is a matter of national security. The government controls who may import it, guarantees the price farmers receive, and holds buffer stocks for emergencies. This article maps out how that system works and where it is heading.

How much rice does Malaysia produce on its own?

More than half, but not enough. In October 2024, the Ministry of Agriculture and Food Security announced the country’s rice self-sufficiency level (SSL) at 56.2% for 2023 — a figure lower than the 63-70% range that, according to DOSM, was reported under the old calculation method over the past decade.

That drop is not entirely due to falling production, but to a change in how it is calculated. The new method aligns with the guidelines of the UN Food and Agriculture Organization (FAO), and counts only the clean padi that is actually milled into rice — no longer including seed padi. The padi-to-rice conversion rates are kept at 70% in Peninsular Malaysia, 63% in Sabah, and 60% in Sarawak.

The reality: for every one kilogram of rice the public eats, about 400 grams is imported. The country’s rice imports have risen markedly over the past decade, and per-capita consumption remains high at about 76.7 kilograms a year.

Indicator	Figure	Year / Source
Rice self-sufficiency level (SSL)	56.2%	2023 (new FAO method)
Rice production	2.18 million tonnes (down 4.7%)	2023
Per-capita consumption	76.7 kg/year	2023
Strategic rice stock	40,000 tonnes	2023
SSL target	75%	by 2025 (RMK-12)
SSL target	80%	by 2030 (DAN 2.0)

The two targets at the bottom of that table — 75% by 2025 and 80% by 2030 — are the backbone of the policy. The 80% target is enshrined in the National Agrofood Policy 2021-2030 (DAN 2.0), which is driven by six objectives, five thrusts, 21 strategies and 77 action plans.

Where is the country’s rice grown?

In areas called padi granaries — large-scale padi field zones supervised by dedicated agencies to ensure orderly water supply, seed and marketing. These areas are the backbone of the country’s rice production.

Malaysia’s padi granary structure comprises:

• MADA (Muda Agricultural Development Authority) in Kedah and Perlis — the largest and most productive padi area in the country.
• KADA (Kemubu Agricultural Development Authority) in Kelantan.
• Several IADA (Integrated Agricultural Development Areas) across the country, including North-West Selangor (which covers Sekinchan), Kerian-Sungai Manik in Perak, KETARA in Terengganu, Seberang Perak, and areas in Pahang, Penang, as well as Sabah and Sarawak.

Kedah alone accounts for the largest share of national production. But the productivity gap is enormous: areas such as Sekinchan can produce padi yields far higher than the national average, which stays below 5 tonnes per hectare, while many other areas remain well below that level. Closing this gap is the focus of the latest policy.

How is the government trying to raise yields?

By replicating what works in Sekinchan. That small town in Selangor is renowned for its high and consistent padi yields, the result of efficient water management, the use of machinery, and large-scale farming practices. The government now wants to export that model across the country through the SMART SBB (Sawah Berskala Besar, or Large-Scale Padi Fields) programme.

In January 2024, the Minister of Agriculture and Food Security Datuk Seri Mohamad Sabu announced a target of implementing Sekinchan-style practices across about 150,000 hectares of padi fields by 2030 — equivalent to roughly one-third of the country’s total padi area of around 600,000 hectares.

The goal is clear in terms of yield. The national average remains below 5 tonnes per hectare. SMART SBB targets at least 7 tonnes per hectare — a level that, according to the minister, could make Malaysia a rice exporter rather than an importer. At several pilot sites in Kedah, yields were reported to have risen well beyond the old average once these methods were adopted.

Who guarantees farmers the price of their padi?

The government — through a combination of guaranteed prices, cash subsidies, and a protected sole buyer. Without this support, growing padi would struggle to be profitable for most smallholders.

Three main layers support farmers’ incomes:

1. The floor price (guaranteed minimum price). In Budget 2024, the padi floor price was raised to RM1,300 per metric tonne, effective 15 February 2024, up from the RM1,200 that had held since 2014. On the same date, the RM1,300 rate was standardised nationwide when Sabah and Sarawak were raised from a minimum market level to match the Peninsula. This sets the lowest price a farmer can receive.
2. The Padi Price Subsidy. The additional payment for each tonne of padi sold was raised to RM500 per tonne (from RM360). It is a production-based subsidy — the more padi sold, the more assistance received.
3. Input subsidies. The government allocated RM2.6 billion in Budget 2024 for various subsidies and incentives to padi farmers and fishermen, including fertiliser, pesticides and production costs.

At the end of the chain stands BERNAS (Padiberas Nasional Berhad). The company holds the country’s sole rice-importer role — a responsibility inherited from the National Padi and Rice Board (LPN), which took over the rice import role and became the sole importer in 1974 following the 1973 world food crisis. In return, BERNAS carries social obligations such as managing the national rice buffer stock, buying farmers’ padi at the guaranteed price, and supporting Bumiputera millers. BERNAS was privatised on 12 January 1996 and later listed on Bursa Malaysia.

Why is this target so hard to reach?

Because the problem has many layers. Low yields per hectare, rising input costs, small and fragmented farm sizes, dependence on weather and ageing irrigation systems, and the rising age of farmers all weigh on production. At the same time, demand does not fall — Malaysians still eat a lot of rice.

This makes the mathematics of food security sensitive. If a global rice crisis were to strike and imports were cut off, Malaysia would have to reduce consumption significantly to survive on local supply alone. That is why self-sufficiency targets, smart-farming schemes, and the subsidy structure remain policy priorities, despite their high cost and the still-wide gap between the targets and the current self-sufficiency level.

What’s next

• Watch the annual SSL figures released by the Department of Statistics Malaysia (DOSM) and the Agriculture Census — because the new FAO-based calculation method means past and new figures cannot be compared directly.
• Follow the progress of SMART SBB: whether the area approaches the 150,000-hectare target and whether yields at pilot sites remain high as it is expanded.
• Watch the annual Budget for any changes to the padi floor price, the Padi Price Subsidy rate, and the total agrofood subsidy allocation.
• Read the official document of the National Agrofood Policy 2021-2030 (DAN 2.0) on the KPKM website to understand the production targets, farmers’ income and full action plans.