Govt rolls out three-tier plan to cushion food producers from global cost pressures

KUALA LUMPUR, June 22 — The government will use tax exemptions, targeted aid and policy reforms to ease pressure on the food production sector as global tensions, particularly conflicts in the Middle East, continue to drive up fuel and agricultural input costs.

Deputy Agriculture and Food Security Minister Datuk Chan Foong Hin said the government’s response is divided into short-, medium- and long-term measures aimed at reducing production costs and strengthening food supply resilience.

“In the immediate term, the government will exempt selected agricultural inputs, including rock phosphate and magnesium sulphate, from the sales and service tax (SST) from January 1, 2026, to December 31, 2027, to help reduce production costs,” he told the Dewan Rakyat today.

Chan said the government was also increasing financial support for paddy farmers, including raising paddy planting incentives for the 2026 season from RM160 to RM300 per hectare.

He said this would involve an additional allocation of about RM40 million and benefit nearly 200,000 farmers nationwide.

He added that a harvesting incentive of RM50 per hectare per season, introduced in 2025, would continue to help ease farmers’ cost burdens.

Monthly assistance has also been increased, with the Agri-Food Commodity Cash Assistance and diesel support for individual farmers raised from RM300 to RM400 starting April 2026, Chan said.

“Fuel subsidies for fishermen will also remain in place at RM1.65 per litre for Zone A, B and C vessels to support operational stability in the fishing sector,” he said.

For the medium term, Chan said the government is focusing on improving productivity across existing food production systems, including Permanent Food Production Parks, livestock and aquaculture zones, and Integrated Agricultural Development Areas.

He said this would be supported by initiatives to strengthen household and community-level food production, as well as efforts to promote regenerative agriculture practices.

“The National Agro-Food Development Programme (PPAN) 2026 has also been restructured, with priority given to high-impact projects over smaller-scale or non-essential initiatives,” he said.

On long-term reforms, Chan said the government is drafting a National Food Security Act aimed at ensuring stable supply, price stability, lower import dependence and better access to safe, nutritious food.

He said a national food crisis management system is also being developed to improve preparedness for future shocks.

Food production zones would also be gazetted through cooperation with the Housing and Local Government Ministry under the National Agro-Food Zone (KAGUMN) framework, he said.

“KPKM emphasises that national preparedness in facing global crises is crucial.

“Through comprehensive measures and the restructuring of agro-food programmes, the government is confident it can support targeted groups in managing production costs, easing market pressures, and ensuring the continued stability of national food security,” he said.