Unlocking Smallholder and R&D Potential

UNLOCKING the full potential of smallholder planters and genome research are the two key initiatives identified by the Government to boost higher productivity and sustainability level of the palm oil industry in the country.

Malaysia is the world’s second largest palm oil exporter.

The National Economic Advisory Council (NEAC) said that more than one-third of palm oil production came from smallholders, who currently had lower yields than commercial estates.

Oil palm plantation smallholders include independent, government (Felda, Felcra and Risda) as well as state schemes.

“The initiatives by the Government and market leaders should aim to help smallholders by timely replanting of old, low-yielding palms with better-yielding stock,” NEAC said in a case study included in the NEM report released yesterday.

“This, together with better maintenance and upkeep, will serve to ensure that smallholders in this sector generate higher yields and thus income,” it said.

NEAC said large plantation companies could train smallholders through consultancy services.

“This initiative will provide knowledge, management and technology transfer opportunities to smallholders to boost productivity levels and close the industry gap, enhance human capital development and income opportunities among smallholders.

“It will contribute to the inclusivity goal of the NEM as it will move the rural smallholders up the value chain,” it said.

For instance, an extra 10 tonnes of fresh fruit bunches (FFB) per hectare, involving 1.69 million hectares of smallholder area (inclusive of government and state schemes), would generate a further 16.9 million tonnes of FFB, it said.

“With oil extraction rate of 21%, crude palm oil production in 2008 could be increased by 20%, increasing exports by RM8bil at RM2,250 per tonne,” NEAC said.

In terms of genome engineering, the report said a new era had emerged to provide significant improvements in tools for sequencing and synthesising DNA at the molecular level.

“This means palm oil crop can be altered to produce higher oil yield, higher iodine value and shorter oil palm tree to make it easier to harvest.

“Other traits that can be altered by the genome project are resistance to pests and diseases, resistance to weather, longer fruit stalk and tolerance to salinity.

“Trait stacking will exponentially increase the retail value added per hectare and also enable us to shift towards a sustainable economy largely based on renewable resources,” it said.

NEAC said industry calculations suggested that the sector’s share of real gross domestic product could grow to 7.6% by 2020 from 3.2% in 2008 if the value-added gains from efficiency and innovation could be realised.

“This would translate into a yearly growth of 13.7% from 2009 to 2020.

“Palm oil exports can also grow by 7% per annum to RM84.6bil by 2020, probably more if new palm oil-based products and services can be successfully marketed,” it said.

Carbon trading

The report said the potential of the palm oil sector becoming the lead in terms of the sustainability pillar in the NEM also depended on the future of carbon trading – which was uncertain due to lack of agreement on setting binding international targets at the recent Copenhagen negotiations.

Carbon trading is a process of buying and selling carbon credits. Large companies or organisations are assigned a quota of carbon that they are allowed to emit. If a company’s emissions are less than its quota, it can sell credits; if emissions are more, it will need to buy carbon credits.

“Thus, Malaysia should consider intensifying efforts to get plantation land to be recognised internationally as natural carbon sinks.

“The industry can also develop an intra-community market using the Roundtable on Sustainable Palm Oil (RSPO) in tandem with the development of Certified Sustainable Palm Oil.

“For example, downstream RSPO members can buy carbon credits from upstream growers,” it said.

Source : The Star

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