Malaysia farmers welcome lower diesel prices, cutting tilling costs

Paddy farmers in Kedah are breathing a sigh of relief as the recent drop in subsidized diesel prices to RM2.10 per liter has significantly cut their land tilling costs. For operators like Azizan Osman, 65, a machinery and lorry owner in Kampung Sungai Gelam, the reduction means costs have fallen by more than 30 percent.

The cost to till one relung, equivalent to 0.28 hectares, has decreased from RM120 to RM80. Azizan, who operates tilling machinery inherited from his father, noted that this diesel price cut could reduce operational expenses by up to 50 percent compared to the previous season. This allows for a reduction in the wages charged for tilling services.

"The reduction in subsidized diesel prices... is able to reduce operational costs by up to 50 percent compared to last season, thus allowing the tilling wage rate to be lowered," Azizan explained. The new diesel price came into effect on July 1, 2026, providing immediate financial relief to those in the agricultural sector.

This development is particularly welcome in an industry sensitive to fuel costs, which directly impact the profitability of farming operations. The lower tilling costs are expected to benefit farmers by reducing their overall expenditure, potentially leading to better yields or increased profit margins.

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The reduction in subsidized diesel prices... is able to reduce operational costs by up to 50 percent compared to last season, thus allowing the tilling wage rate to be lowered.