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The Impact of Price Subsidy on Rice Self-Sufficiency Level in Malaysia: A System Dynamics Approach

Author

Listed:
  • Farah Hanim Abdul Rahim*

    (Universiti Utara, Malaysia)

  • NurulNazihahHawari

    (Universiti Utara, Malaysia)

  • Norhaslinda Zainal Abidin

    (Universiti Utara, Malaysia)

Abstract

The Malaysian government had targeted for the rice industry in the country to achieve 100% rice self-sufficiency where Malaysia’s rice self-sufficiency level (SSL) is currently at 65% to 75%. Thus, the government had implemented few policies to increase the rice production in Malaysia to meet the growing demand of rice. This paper focus on analyzing the impact of price subsidy on the rice production system in Malaysia using a system dynamics modelling approach. Scenario analysis was conducted using the developed system dynamics model by making changes on the price subsidy and observe the impact of the changes on the rice production and rice SSL. The developed system dynamics model offers better understanding of the effect of price subsidy on the rice self-sufficiency level. Based on the scenario analysis, the result shows that a 50% increase in the price subsidy leads to a substantial increase in demand as the rice price drops. Accordingly, the local production increases by 15%. However, the SSL slightly decreases as the local production is insufficient to meet the large demand.

Suggested Citation

  • Farah Hanim Abdul Rahim* & NurulNazihahHawari & Norhaslinda Zainal Abidin, 2018. "The Impact of Price Subsidy on Rice Self-Sufficiency Level in Malaysia: A System Dynamics Approach," The Journal of Social Sciences Research, Academic Research Publishing Group, pages 801-806:6.
    • Handle: RePEc:arp:tjssrr:2018:p:801-806
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    References listed on IDEAS

    as
    1. Dawe, David, 2013. "Geographic determinants of rice self-sufficiency in Southeast Asia," ESA Working Papers 288989, Food and Agriculture Organization of the United Nations, Agricultural Development Economics Division (ESA).
    2. Norhaslinda Zainal Abidin & Mustafa Mamat & Brian Dangerfield & Jafri Haji Zulkepli & Md Azizul Baten & Antoni Wibowo, 2014. "Combating Obesity through Healthy Eating Behavior: A Call for System Dynamics Optimization," PLOS ONE, Public Library of Science, vol. 9(12), pages 1-17, December.
    Full references (including those not matched with items on IDEAS)

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