Smallholders hail govt move to resume aid for oil palm replanting
KUALA LUMPUR: National Association of Smallholders Malaysia (NASH) president Datuk Aliasak Ambia thanked the government for resuming financial assistance for replanting of oil palms next year, after two years of “dry period”.
NASH represents some 400,000 small farmers planting oil palm and rubber trees throughout Malaysia.
Yesterday, Prime Minister Datuk Seri Najib Razak, in tabling 2017 Budget, allocated RM30 million for smallholders to replant their unproductive trees.
“We’re very grateful for the RM30 million oil palm replanting grant for next year. There was no budget for us to replant ageing trees for the past two years,” he told Business Times in a telephone interview.
“We hope this RM30 million is adequate because there is no mention of replanting area next year,” he added.
Aliasak noted the oil palm replanting grant was previously set at RM7,500 per hectare (ha) in Peninsular Malaysia and RM9,500 per ha NASH president
Ambia says there was no budget to replant ageing trees for the past two years.
in Sabah and Sarawak.
He said the oil palm replanting grant goes as payment for labour, chemical usage, high yielding seedlings and machinery rental.
Najib said the government will also allocate RM250 million next year as an incentive for sustained rubber production.
From January to August this year, rubber output only amounted to 457,954 tonnes.
For the full-year, the government estimated rubber output to shrink further by 10 per cent to 650,000 tonnes from last year’s 722,122 tonnes.
So far, SMR 20 prices averaged at RM5.17 per kg with the lowest at RM4.27 per kg on February 11 2016.
This is due to weak demand from China following anti-dumping and countervailing duties by the United States on select tyres.
Since the start of this year, the government is incentivising smallholders to go on tapping rubber by increasing the floor prices to RM5.50 per kg (free on board) and RM2.20 per kg (farm-gate price)
Aliasak also thanked the government for heeding smallholders’ call to further raise the floor price for rubber sales.
“The cost price is around RM3.20 per kg while the floor price is only set at RM2.20 per kg.
“We have been selling rubber below cost price. Hopefully, the RM250 million allocation is meant to raise the floor price above production cost level,” he said.