Allocation for Felda settlers a smart move
THE Pakatan Harapan (PH) government under Budget 2020 has set a Rm810mil allocation to protect the welfare of the Felda community.
Of the total allocation, Rm250mil is for an income-enhancement programme benefiting 11,600 settlers, Rm300mil to write off the interest of the settlers’ debts, Rm100mil for Felda’s water supply projects, Rm70mil for housing the new generation of Felda settlers and Rm90mil for the upgrading of Felda roads and basic infrastructure.
An industry observer says this is a smart move by the PH government ahead of the next general election. Felda represents the country’s most important political cog with 54 parliamentary constituencies under the Felda settlers.
Back in April this year, the government in its White Paper on Felda announced Rm6.23bil in fresh aid in the form of grants, loans and guarantees as part of the turnaround plan for the ailing government agency.
In Budget 2020, under commodity development, the government has expressed its concern on smallholders, who are facing low commodity prices amidst the intense anti-palm oil campaign in the European Union (EU) and the United States.
It has proposed a Rm550mil oil palm replanting loan fund for smallholders that is collateral-free at an interest rate of 2% per annum, with a tenure of 12 years including a four-year moratorium on repayment.
The replanting will be undertaken using the latest seedlings and also in compliance with the Malaysian Sustainable Palm Oil standards to ensure better productivity and marketability.
The Malaysian Palm Oil Board (MPOB) will also get a Rm27mil allocation in its efforts to market palm oil internationally and counter the anti-palm oil campaigns in the Western countries under Budget 2020.
According to Malaysian Palm Oil Association CEO Datuk Nageeb Wahab, the Rm27mil allocation to MPOB is certainly a good start.
“However, the industry fraternity is of the view that it (the allocation) will not be enough to counter the increasing anti-palm oil campaigns from Western green activists and lobbyists.
“More funds are needed to reach out to the consumers in the US and the EU, who have been fed with the wrong information and negative perception on palm oil.”
Separately, the government in Budget 2020 is proposing to provide Rm738mil for Rubber Industry Smallholders Development Authority (Risda) and the Federal Land Consolidation and Rehabilitation Authority (Felcra) to implement various income-generating programmes to benefit over 300,000 Risda smallholders and 100,000 Felcra participants.
Nageeb, who is also Felcra chairman, points out that the agency has identified some 30,000ha of its rubber land to be converted into planting other cash crops, including bamboo, to generate a new source of revenue for its Felcra participants.
“We expect the new allocation under Budget 2020 will also enable Felcra to put its plan into motion such as industrial farming – a dairy venture with the Qatar Group – and later create satellite farming with our participants that will help Felcra to generate additional and consistent annual income.”
Another proposal under Budget 2020 is to enhance the implementation of biodiesel, with the B20 biodiesel (a blend of 20% palm methyl ester or PME and 80% petroleum diesel) for the transport sector to be implemented by end-2020.
MPOB, which also regulates the country’s biodiesel programme, fully supports the government’s proposal for the use of the B20 biodiesel in the transportation sector in an effort to boost the use of palm oil.
MPOB director-general Dr Ahmad Parveez Ghulam Kadir says “the implementation of B20 for the transportation sector will increase the uptake of crude palm oil (CPO) to one million tonnes annually.
“This would mean an additional 500,000 tonnes of CPO will be used for the B20 implementation from the B10 biodiesel,” adds Ahmad Parveez.
Apart from the palm oil sector, the government also recognises the hardship caused by low rubber prices and low yields during the rainy season.
Hence, under Budget 2020, the government will allocate Rm200mil for monsoon season aid (Bantuan Musim Tengkujuh) to eligible rubber smallholders under Risda and the Sabah Rubber Industry Board.
In addition, the government will provide Rm100mil for the Rubber Production Incentive in 2020 to enhance the income of smallholders faced with low rubber prices.