In recent years, the Malaysian rice sector has experienced structural changes to increase its competitiveness within a dynamic environment that is influenced by political, technical, economic and international trade challenges. Using a Policy Analysis Matrix, this paper examines whether Malaysia would have the comparative advantage in rice production under different scenarios of existing policies and economic reforms. The empirical results show that the rice farming is marginally competitive and generates relatively low social profits. Other empirical results show that three out of four states have comparative advantages in producing rice with Domestic Resource Cost values or DRCs less than one. Conversely, the results indicate no comparative advantage for rice production in the KETARA granary area, as DRC is greater than one.


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