Planters surprised by govt decision to freeze oil palm acreage expansion
LOCAL planters have been taken by surprise by the Government’s latest decision to stop increasing the planted area for oil palm.
This move certainly bodes well for Western NGOs, green activists and several European nations, which have been launching campaigns against palm oil in recent years to discredit the crop on concerns associated with deforestation, the loss of biodiversity and the destruction of critical habitat for endangered species.
However, on the local front, planters are still unclear on the full scope of the new oil palm plantation development in Malaysia, whether “it will be restricted to forest or peat land areas or a ban on all acreage expansion”.
As at Dec 31, 2017, the total oil palm planted area in Malaysia stood at 5.81 million ha, of which 2.38 million ha was in Peninsular Malaysia and 2.72 million ha in Sabah and Sarawak.
According to the Malaysian Palm Oil Association (MPOA) CEO Datuk Mohamad Nageeb Ahmad Abdul Wahab, the impact will be minimal in Peninsular Malaysia, as “there is no more land for oil palm expansion here”.
“But, it is an entirely different scenario in Sarawak. There is still plenty of Native Customary Rights (NCR) land that has not been developed.
“The latest decision by the federal government could be a problem in Sarawak and Sabah, which are pushing for more oil palm cultivation,” opines Nageeb.
MPOA represents 118 plantation companies, which account for 1.87 million ha or 40% of the total planted oil palm area in Malaysia. Its members include some of the plantation sector’s big players such as Kuala Lumpur Kepong Bhd, FGV Holdings Bhd, Sime Darby Plantation Bhd and IOI Corp Bhd.
Nageeb says: “Most big plantation companies are focusing on enhancing yields and those with plenty of cash prefer to buy readymade brownfield rather than greenfield plantations.”
In addition, cost and environment issues are restraining factors for greenfield expansion. “I would also want to believe that the minister (of Primary Industries Teresa Kok) is saying that in context Malaysia has promised to keep 50% of its land mass as forest,” he adds.
On Tuesday, Kok said the Government would not allow any more expansion of oil palm plantations in Malaysia and was also committed to maintaining 50% of the country’s land as forest, noting the loss of flora and fauna due to widespread deforestation for the palm oil industry over the years.
Meanwhile, United Malacca Bhd chief executive officer Peter Benjamin agrees with the statement from the minister “as far as the big players are concerned or for large-scale oil palm development”.
However, he points out that consideration must be given to individual smallholders to plant oil palm and “this should be done on a case-by-case basis”.
Says Benjamin, “Malaysia is committed to retaining 50% of its forest area and this is a good move by the minister, when plantations are faced with challenges regarding sustaina- bility, environment issues, etc.
“This will also give a boost to the Malaysian Sustaintainable Palm Oil (MSPO) certification scheme and we can promote the Malaysian palm oil brand.”
He adds that plantations should also be focusing on improving their yield in the existing planted areas, thus increasing production and meeting the global demand.
Industry expert MR Chandran concurs that local plantation companies should focus on the fresh fruit bunch (FFB) and crude palm oil (CPO) yields per unit area.
“We are still struggling to achieve a national average of four tonnes CPO per hectare in spite of the hybrid planting materials, good agronomy and agricultural practices.
“The commercial potential for oil palm is six to seven tonnes of oil per hectare,” he says.
Chandran notes that the number one issue confronting the industry is labour shortage, leading to crop losses, which has been estimated at between 10% and 15% per annum
depending on the locality.
The industry needs an established long-term policy on migrant labour, says Chandran, adding that the cost of recruitment of foreign workers currently is prohibitive due to too many go-between agents.
Hence, the recruitment process needs to be simplified and streamlined, he adds.
Chandran also says “there should not be any move to prevent oil palm cultivation on NCR land in Sarawak for it has direct economic benefits to the local native population.”
Towards this end, the United Nations’ sustainable development goals take precedence.
He adds that “the eradication of poverty, particularly in rural environments, is the ultimate objective of any government in any state”. “And it has been scientifically proven that oil palm offers the best solution, simply because it has seven to 10-fold productivity gains over other oil-bearing crops, resulting in far less conversion of forested land.”
Meanwhile, the Borneo Post reported that the Sarawak government will object to any restriction on the expansion of oil palm plantations on NCR land. Its deputy chief minister, Datuk Amar Douglas Uggah Embas, says land or plantation development on NCR land is part of the Sarawak government’s programme to eradicate poverty in the rural areas, as well as to improve the rural folks’ economic status.
However, Uggah agrees with the federal government’s effort to keep 50% of the land in Malaysia as forest, saying that this has been the policy of the Sarawak government since 1992. Uggah, who is the Bukit Saban assemblyman, also agrees with halting the expansion of land and plantation development on state land, adding that the Sarawak government had announced this move previously.