by AUFA MARDHIAH / pic BLOOMBERG

PLANTATION and Commodities Minister Datuk Seri Johari Abdul Ghani is suggesting the introduction of a special harvesting course under technical and vocational education and training (TVET) to elevate harvesting as a profession in Malaysia, concurrently reducing the industry’s dependence on foreign workers.

Johari noted that the palm oil industry is a significant sector for the country with an export value of RM130 billion. 

However, it is hampered by a longstanding labour issue. 

“I am afraid if we do not have harvesters to cover the 5.6 million hectares of palm oil that we have, fruits amounting to RM20 billion-RM30 billion cannot be harvested — which is what happened during the pandemic. 

“It will be good to have local harvesters but we must also keep in mind that we cannot pay locals the same way we pay foreign workers,” Johari said at the Palm Oil Economic review and Outlook Seminar in Kuala Lumpur on Jan 11.

He said once harvesting is recognised as a profession, it will allow TVET students to train for oil plantations, including mechanisation from the Malaysian Palm Oil Board (MPOB), which will make the job easier. 

Further on the course, Johari said he has spoken with Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi on the possibility of exploring the initiative.

“Perhaps we can implement this programme in small groups to start off, with 40 to 50 people in a single class, where we can invite industry experts from MPOB to teach them how to harvest palm oil.

“I have also spoken to MPOB to conduct research and development to ensure that our palm oil trees grow to a medium size and produce more fruit, making it easier for our people to harvest,” he added.

Commenting on wages for harvesters, Johari assured that the industry is very lucrative and that there is no problem in providing a slightly higher salary to local harvesters compared to foreigners. 

“I was looking at around RM3,000 to RM4,000 in incentives and more, depending on the fruits harvested. They will have a basic salary and commission if they perform well. 

“This is just an initial idea that I want to propose, not something to be implemented immediately, as we have many of our youths, including university graduates, engaged in the gig economy. We want to elevate harvesting as a profession,” said Johari.

On the other hand, he also said the government currently has no plan to review the palm oil profit levy. 

On the other hand, they are investigating an issue of windfall profit levy raised by industry players and consulting with relevant parties.

“The industry players mentioned that crude palm oil (CPO) above RM3,000 would be subject to a windfall tax. 

“However, they informed us that the current costs have increased, reaching RM2,800 to RM3,000, compared to RM1,500 to RM1,800 previously. In certain areas, it has exceeded RM3,000,” he added. 

Johari said when implementing a windfall tax, it was supposed to be a profit (more than cost), but due to the increased costs, some adjustments are needed. 

“This matter requires further discussion, and we need to examine the details of the costs,” Johari added.

In his address on Malaysia’s palm oil market prospects, he expressed optimism for 2024. 

He cited strong expectations of increased palm oil demand from key export destinations like India, China, and the European Union. 

The positive outlook is fuelled by a drive to replenish stocks for food security and business sustainability. 

In addition, Johari highlighted the government’s plan to extend automation tax incentives to the plantation sector to encourage technology investment for enhanced productivity. 

The move is viewed as crucial for the oil palm industry, given its reliance on foreign workers. 

Johari expressed confidence in the Mechanisation and Automation Research Consortium of Oil Palm (MARCOP), foreseeing significant progress in industry mechanisation and automation, including the adoption of cutting-edge technologies in harvesting and crop management.

On the Malaysian Sustainable Palm Oil (MSPO) certification programmes, Johari highlighted the intensified efforts to position Malaysia’s palm oil industry as a global leader in sustainability, which he said the commitment receives continuous support from the ministry, related agencies and various stakeholders, aiming for the comprehensive adoption of sustainability requirements among smallholders.

As of Dec 31, 2023, the MSPO certification has achieved an impressive 92.6%, signifying that 5.23 million hectares out of the total 5.65 million hectares of oil palm planted areas in Malaysia have been certified. 

Furthermore, 92.68% of the country’s 465 mills have also received MSPO certification. 

The integration of the Sawit Intelligent Management System (SIMS) with MSPO certification is expected not only to enhance operational efficiency but also to make significant contributions to meeting European Union Due Diligence Regulation (EUDR) requirements.