Palm Oil Sector Needs More Money for R&D

Malaysia’s palm oil industry, which accounts for 70 per cent of the country’s agriculture sector, wants more money for research, better infrastructure and incentives for biofuel ventures under Budget 2010.

Malaysian Palm Oil Board chairman Datuk Sabri Ahmad said the industry needs more funds for research on initiatives like oil palm genome mapping.

“There must also be incentives for tissue culture production to expand and increase oil palm production for smallholders,” Sabri said in reply to e-mailed questions from Business Times recently.

He said there must also be incentives for promoting phytonutrients and its derivatives such as oleochemical manufacturing.

For the biofuel sector, Sabri said there should be more incentives to re-engineer factories to be viable such as to produce palm methyl ester and micro nutrients such as tocoterionol, carotenoids and phenolics.

“There should also be more tax breaks for research and development in second generation biofuel from biomass.

“On the environment, the government should provide incentives for zero-emission technology such as trapping and using of methane gas and biofertiliser production.

Sabah and Sarawak also need better infrastructure like roads and more storage facilities.

CIMB Investment Bank Bhd senior regional analyst Ivy Ng said the three potential wish lists of planters would be more clarity on the mandatory biodiesel programme for the country, which is supposed to start next year in terms of mechanism and subsidy.

“There should also be a better infrastructure for the Sabah and Sarawak region which will help improve logistics aspects of palm oil as well as the removal of the windfall tax.

National Association of Smallholders president Datuk Aliasak Ambia said the oil palm replanting scheme should be on a permanent basis and not announced from time to time.

“The replanting scheme should be continuous and not a one-off announcement. The government should make the replanting scheme available at all time just like in the rubber industry.”

Source : Business Times

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