RM4.4 Billion Allocation for Oil Palm Replanting

MALAYSIA’s oil palm industry will spend RM4.4 billion to replant some

365,000 hectares from 2011 to 2013, an official from the Performance

Management and Delivery Unit (Pemandu) in the Prime Minister’s

Department said.

“We cannot force landowners to do something

they don’t want to, especially at the current high palm oil prices. But

we can encourage via financial incentives,” John Low, Pemandu’s director

of the national key result areas (NKEA) on palm oil, rubber and

agriculture told Business Times in an interview in Petaling Jaya recently.

“If replanting is not accelerated, it will take 14 years to clear the

backlog. It is critical to clear the backlog now as each year an average

of 125,000 hectares of trees are due for replanting,” he said.

There are 161,000 independent smallholders in Malaysia. With 600,000

hectares, they account for 12.8 per cent of the country’s planted area.

Low said the government will pay RM1 billion to independent

smallholders, which own some 600,000ha throughout the country, to

compensate for the loss of income from the replanting activities.

Independent smallholders with 40 hectares or less are entitled to a

one-off replanting payment of more than RM6,000 per hectare and monthly

payments of RM500 per household for two years.

On the other

hand, private and government-linked plantation companies are expected to

spend RM3.4 billion to replant aging oil palms in the next three years.

Also present at the interview was Malaysian Palm Oil Council chief

executive officer Tan Sri Yusof Basiron. He referred to MPOB statistics

showing Malaysia’s licensed seed producers churning out some 80 million

germinated seeds per year.

“We only need 50 million seeds a year, so there’s enough to go around,” Yusof said.

Asked if the government guarantees that 100 per cent of the seeds for

sale are of the genuine, high-yielding dura and pisifera hybrids, Yusof

said: “That would not be possible. Therefore, we advise independent

smallholders to deal directly with licensed seed suppliers and not


Some licensed seed producers, like Applied

Agricultural Resources Sdn Bhd, go the extra mile to ensure seedlings’

authenticity by using a new laser tattooing technology and pre-agreed

codes with its clients.

On rumours of select MPOB enforcement

officers abusing their powers instead of enforcing against the supply

and sale of fake seedlings, Low said: “We have regulators watching over

the industry but it is also for the industry to report any wrongdoings.

We’re all for weeding out wrongdoings but without any formal complaint

and evidence we’re unable to act on hearsay.”

He highlighted

the Whistleblower Protection Act 2010, a key piece of new laws under the

Government Transformation Programme, that protects the identity of

informants revealing acts of corruption.

Informants get

immunity from civil and criminal actions. However, this protection can

be revoked, if and when, the whistleblower is found to be involved in

improper conduct.

Low said as a precautionary measure against

graft, MPOB enforcement officers will be rotated periodically. “We want

to eliminate opportunities that could facilitate bribery, corruption and

abuse of powers,” he said.

On the downstream industry, Low

noted the government’s plans to extend the Brain Gain Malaysia programme

to woo Malaysian chemists, food scientists and

fast-moving-consumer-goods marketing specialists in leading global


Currently, the oleochemicals industry suffers from

low-profit margin. Malaysia is producing mostly basic oleochemicals to

make soap, detergent and cosmetics.

What we want to do is to

spur production of higher-priced specialty oleochemicals to make

agro-chemicals, surfactants, bio-lubricants, bio-polyols and glycerol


“We want to retain and attract the best brains to

Malaysia. There’s still good growth prospects in the downstream

businesses,” he said.

Low noted that he had met up with

tocotrienol producers, who highlighted the need for more public funding

to carry out clinical trials.

Currently, there are several

groups of scientists, conducting clinical trials on the effectiveness of

palm oil vitamin E in preventing stroke, fatty liver syndrome and


Source : Business Times

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