Profitability and Competitiveness of Rice Farming in Malaysia: A Policy Analysis Matrix

In recent years, the Malaysian rice sector has experienced structural changes to improve its competitiveness within a dynamic environment that is influenced by political, technical, economic, and international trade challenges. Using a policy analysis matrix and a rich dataset on rice producing households in four of Malaysia’s granary areas, the competitiveness of rice production in Malaysia is analyzed. The empirical results show that rice production is competitive in three of the four granary areas, the exception being Ketara granary area. To fully understand the importance of the competitive farms, they must be identified and studied by further research using disaggregated data. The finding suggests that government policy should focus on encouraging structural changes capable of enabling the local farms to grow enough to earn sufficient income, generate social profits, and thus improve the sector's competitiveness.