In general, the reduction of subsidy on sugar has its pro’s and con’s. According to the article shown, in Budget 2013 the Government’s proposal on reducing sugar subsidy by 20 cents per kilogram is one of the moves in creating a healthier Malaysia. The Government’s biggest concern is that 2.6 million Malaysians are diabetic and more than 98% with type 2 diabetes because of their high consumption of sugar in their food and drinks daily. On the other hand, when the subsidy on sugar is reduced, as sugar is a normal good, the price of sugar will increase and this will result in the decrease in demand. Therefore, consumers will consume less sugar so it will indirectly reduce the number of diabetics in Malaysia and creating healthier Malaysia citizens.
From the diagram above, with a subsidy of X, the supply would increase from S to S1. At S1, the quantity demanded would be Q1, the price that consumers pay would be P1 while the price that producers receive would be P*. Therefore, with a subsidy, the consumers pay less without affecting the producer’s profit as they still receive price of P* with the help of the government.
In addition to that, in my opinion I believe that by reducing the subsidy on sugar, it will help the nation to be more independent. Furthermore, by reducing the subsidy, the government could use the money that was used to subsidies sugar to improve our economic condition such as improving our public transportation, education system in remote areas, reduce the amount of poverty in the country and many more. Besides that, our Government should also reduce subsidies not only on sugar but on other unhealthy food such as food with high contents of oil and salt and instead continue to support the local farmers and their farms by subsidising the production of fruits and vegetables. This method would help and assist the lower-income group to substitute their unhealthy food with healthier and fresher food in an affordable way. Thus, their health care costs will decrease and improve their quality of life.
As we can see, there are also cons of reducing the subsidy on sugar. According to an article in the New Straits Times entitled “Sugar Subsidy Reduced For People’s Good”, Domestic Trade, Cooperatives and Consumerism Deputy Minister, Datuk Tan Lian Hoe said that "Sugar subsidy reduction should be no excuse for traders and operators of eateries to increase prices of goods" and she also said that "Errant trader could face legal action under the price control and Anti-Profiteering Act 2010 for indiscriminately raising prices." Honestly in my opinion, I disagree in this because the subsidy of sugar has been reduced before and the prices of food and drinks are still increased and not much action was taken from this. This is because there is lack of enforcement to assure that traders will not increase prices of goods unnecessarily. Corruption is another issue that might deter effective enforcement to curb traders from violating the law. For example, based on the basic calculations, the cost of the main ingredient in a cup of Milo and Teh Tarik is about 45 cents and 28 cents respectively, but these drinks are sold at RM 1.20 and RM 1.00 respectively. Thus, I agree with the citizens of Malaysia as a big number of them predicted that sooner or later the price of food at restaurants and stalls will increase in conjunction of reducing the subsidy on sugar. It might not be immediately, but slowly and surely the price of food will creep up. The traders would have a strong excuse now. As the government raises the prices, they will eventually have to raise their prices too. Can you argue with that? No.
On the other hand, according to the article from The Star Online on “Sugar Subsidy Reduced”, Muslim Consumer Association of Malaysia secretary-general Datuk Dr Ma’amor Osman said “The reduction of the sugar subsidy would encourage Malaysians to practice a healthier lifestyle.” In my opinion, besides removing the subsidy on sugar, I think that another option to reduce the consumption of sugar among the citizens are by educating the consumers on the dangers of excessive sugar consumption through the media such as advertisements on the television, health advices through the radio and press. Furthermore, the government should also educate school children on the dangers of excessive sugar intake through health education, home science, cookery lessons and many more. They could also encourage children to avoid drinks with high sugar level by providing drinking water in water dispensers around school premises and sweet drinks should not be allowed in school canteens. The government should start cultivating good values in a very early age. An English equivalent is “Strike the iron while it’s hot.”
Siti Zulaika
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