Malaysia's plan to revise its export permit scheme for fruit and vegetables has been deferred to April, amid claims from suppliers who export fresh produce to Singapore that the new rules will raise their costs considerably.
Last week, Johor's vegetable and fruit traders cried foul over new rules imposed by enforcement agency Malaysian Quarantine and Inspection Service (Maqis), which reduced the number of item categories that can be declared in an export permit from 50 to 10, thereby requiring them to apply and pay for multiple permits for each truckload of produce that crosses the border.
The traders said the move would raise their operational expenses, with some claiming costs could rise as much as 700 per cent.
Malaysia's Deputy Agriculture Minister Sim Tze Tzin told The Straits Times the revised rules were intended to address misreporting by the traders, some of whom do not fully declare all the types of items being exported.
"It's difficult to identify all 50 items per container and there appears to be an abuse of the current system," said Mr Sim.
Permits are charged according to the type of items carried, with varying prices for different produce.
An exporter quoted by news site The Malaysian Insight said the new rules cost him an additional RM40,000 (S$13,200) a month to export five lorry loads of fruit and vegetables to Singapore each day.
Mr Sim acknowledged the new rules would raise traders' cost, with several permits required for each lorry load, but said claims that costs would increase as much as seven times were an "exaggeration".
Mr Tan So Tiok, president of the Federation of Malaysian Vegetable Farmers Association, agreed with Mr Sim, saying claims of a 700 per cent cost increase were "nonsensical". He said: "The increase isn't by that much. At most, it would be about a 50 per cent hike, depending on what item you are exporting."
He added that most lorries which cross from Malaysia into Singapore carry no more than 20 types of items on average.
Although there is a four-month halt on enforcing the new policy, Mr Sim said the authorities will still need to implement a more transparent way of reporting for goods transported across the border.
"There is a need to change the system. This is to make sure there's honest reporting by traders and the government can facilitate trade easily," he said.
Meanwhile, a task force consisting of the authorities and stakeholders has been set up to address concerns from both sides, before the government reintroduces the reporting scheme, albeit with some revisions.
Mr Tan said discussions are under way to make the new reporting system more seamless.
"We'll try to finalise terms with Maqis. There's a proposal from us to streamline reporting according to categories," the Johor-based farmer said.
As an example, he noted that different varieties of bananas are each currently required to be listed as separate items in a permit, whereas suppliers are requesting that all bananas be declared as a single item instead.
Separately, exporters have warned that the increased costs will take a toll on their business, especially if they are unable to pass on the cost hikes to consumers without it affecting their sales.