Govt to protect small palm oil planters


The government is in the middle of establishing a social safety net that would protect small palm oil planters from future price fluctuations.

Primary Industries Deputy Minister Datuk Seri Shamsul Iskandar Mohd Akin (picture) said the government is currently studying new ways to avoid smallholders from being severely affected by the fall in crude palm oil (CPO) price.

“This is on top of the several initiatives introduced by the government to ensure that the smallholders could survive in the challenging market environment,” he told the Dewan Rakyat yesterday.

Shamsul Iskandar was responding to a supplementary question from Datuk Azizah Mohd Dun (Pakatan Harapan-Beaufort) who asked about the government’s initiative to ease the burden of smallholders.

According to Azizah, from the total of 600,000 small planters nationwide, more than 30,000 are in Sabah and they have been adversely hit by the low global CPO prices.

Shamsul Iskandar said the government has allocated RM30 million for Malaysia Sustainable Palm Oil certification, which also allows for 100% subsidy for oil palm small planters.

He added that the smallholders are also entitled to a 20% discount when they purchase farm machinery.

“We have also introduced the Sustainable Palm Oil Clusters and we have approved the capital for this corporation to educate the smallholders and help them to sell their cultivated palm oil in bulk,” he said.

Palm oil prices fell more than 15% last year as stockpiles rose to record high in Malaysia amid subdued global demand.

In contrast, the commodity inventory unexpectedly increased by 1.3% or 3.05 million tonnes last month, compared to January as a result of a 75% dip in export to China.

To cushion the low price impact and rising stockpile, Malaysia mandated B10 biodiesel (a blend of 10% palm oil and 90% petroleum diesel) for the transportation sector last month.

While implementing all the relevant initiatives, Shamsul Iskandar said the government is also optimistic in penetrating new markets that would boost the commodity’s export.

“Among the new potential markets are South-East Asia, Africa and the central Asia region, while the new importers are the Philippines and Vietnam.

“These nations are growing in terms of population and economy. It is positive for us,” Shamsul Iskandar said.

Shamsul Iskandar said trade missions to Egypt and Morocco last September have opened doors to other regions including Northern and Central Africa.

“Turkey is also one of the potential markets because the free trade agreement between Malaysia and Turkey has seen the palm oil exports and palm oil-based products rose by 5.7% in 2018,” he added.