Budget 2026: Agricultural subsidies amount to RM2.62 billion, highest in history

KUALA LUMPUR: The government will continue to defend the fate of rice farmers by providing agricultural subsidies totaling RM2.62 billion in the 2026 Budget, which is the highest amount in history, said Prime Minister Datuk Seri Anwar Ibrahim.

The Finance Minister said the subsidy is provided for various subsidies and assistance to rice farmers such as rice price subsidies, rice crop subsidies, fertilizer subsidies, seed subsidies and rice production incentives.

Starting this year, the MADANI Government increased the rates of tillage incentives and pesticide incentives to RM160 and RM300 per hectare per season respectively.

“The MADANI government has also introduced a new incentive, the PADI Harvesting Incentive, RM50 per hectare per season to cover the use of diesel for harvesting.

“It is estimated that each farmer will receive assistance of approximately RM4,300 per hectare instead of RM3,790 per hectare per season,” said the Prime Minister when tabling the 2026 Budget in the Dewan Rakyat today.

Anwar said that to strengthen the country’s rice industry, Phase 1 of the Tertiary Irrigation System for the Five-Season Two-Year Rice Crop Project in the Muda Agricultural Development Authority (MADA) areas of Kedah and Perlis has been completed, with the next phase to be completed in stages until the second quarter of 2030.

He said the Jeniang Water Transfer Project would begin implementation next year at a cost of RM1.28 billion to build a new river for irrigation that supports the Two-Year Five-Season Rice Cultivation Programme.

“Problematic rice fields will be restored, infrastructure will be improved, including the adoption of modern technological rice field models with a fund of RM100 million.”

“To increase harvest yields, 6,400 rice farmers will be supplied with foliar fertilizer for rice nutrients and rice field soil fertility materials with an allocation of RM20 million,” said the Prime Minister.

Anwar said that since 2024, the MADANI Government has been working with all state governments to leverage land use for agricultural projects, with more than 360 projects implemented including crop, livestock, fisheries and agricultural automation projects.

“Next year, cooperation will continue to be intensified with an allocation of RM300 million, among others, to support grain corn cultivation, aquaculture and rice cultivation activities in Sabah and Sarawak,” said Anwar.

For agricultural entrepreneurs, the Prime Minister said Agrobank provided RM1.1 billion in financing for entrepreneurs to expand their businesses as well as support automation and mechanization in agricultural projects.

The Ministry of Agriculture and Food Security’s (KPKM) Agropreneur NextGen Programme will provide start-up grants and agricultural project expansion grants with a fund of RM20 million.

“The government proposes that companies carrying out new food production projects be given a 100 percent income tax exemption on statutory income for a period of 10 years.

“Existing companies that undertake expansion projects are given a 100 percent income tax exemption on statutory income for a period of five years. The tax incentive application period has been extended until 31 Dec 2030,” said the Prime Minister.

Anwar said that for fishermen, a living allowance of up to RM300 per month and catch incentives are provided with an allocation of RM160 million, in addition to the government maintaining subsidized diesel at RM1.65 per litre specifically for fishermen.

He said RM20 million has been provided for fishermen to upgrade their vessels to reduce their dependence on foreign skippers and crews and replace Zone B trawlers and two-boat kenka trawlers to reduce unsustainable vessels.

“RM55 million has been provided to support local fruit entrepreneurs, including incentives for planting and infrastructure for pineapple farms, including in Sarawak, as well as other fruit crops such as Dutch durian, guava and big lime,” said Anwar.

-Agency