Do something now to help smallholders
EVERY Malaysian would have to consume 100kg of palm oil in a year to ease the growing stockpile.
No, this is no joke. That is what is required statistically, for 32 million Malaysians against the 3.21 million tonnes of palm oil stock in the country.
Primary Industries Minister Teresa Kok is on a drive to make Malaysians use more palm oil because we prefer other types of oil, it seems.
Quoting the Malaysian Palm Oil Board, The Star reported on Friday that the commodity’s stock has hit 3.21 million tonnes – the highest in 19 years – and this is a 6.9% increase from the previous month.
Rising stocks and low oil palm prices have been hitting the country’s 650,000 oil palm smallholders hard for the last three months.
There is palpable tension in predominantly agricultural communities where the majority of the people depend on oil palm cultivation for a living.
Datuk Seri Dr Wee Ka Siong is certainly very concerned, as some 70% of his constituents in Ayer Hitam, Johor, are oil palm smallholders.
At wits end looking for ways to help the smallholders on every platform available, he has urged the government to focus on finding overseas markets and helping smallholders cope with the current problems stemming from the prolonged low price of the commodity; this has also led to some dealers refusing to buy oil palm fruits.
“What’s happening with the additional 500,000 tonnes of palm oil to be imported by China?” he asks.
Dr Wee – who had in October voiced his concerns over Malaysia-China ties following the derailment of several mega projects with China-based companies after the 14th General Election – was told that China intends to import another 500,000 tonnes of palm oil, provided the price is competitive.
Prime Minister Tun Dr Mahathir Mohamad, who visited China in August 2018, mentioned China’s intention in Parliament in a reply to Dr Wee’s concern. However, Kok has said that China’s intention is not a promise.
China, with a population of 1.4 billion, is the largest consumer of palm oil in the world.
Apart from the price of the fruit falling to below RM300 a tonne, the harvest has been poor of late due to weather conditions, and all this has led to some fruit dealers not accepting any more fruits from the smallholders.
Dr Wee says the government has to take some initiative to help the smallholders because the impact on them is very serious – many are very dependent on oil palm for a living.
Dr Wee says the smallholders
are at a loss about what to do.
Financial problems are multiple and far reaching for some, he says, adding that those who took loans to buy land for oil palm cultivation are finding it hard to make repayments.
“Banks concerned should meet up with their borrowers to see how to reschedule repayments,” he suggests.
“One way is to look at their (borrowers’) income so that they have some disposable income as long as the oil palm fruit price is not more than RM300 a tonne,” he says, adding that this will help both parties – banks and borrowers – in this difficult period.
While Kok’s efforts – the “Love my palm oil” campaign and calling to protest the European Union Parliament’s decision to ban palm oil use in biodiesel by 2030 – are appreciated, there are certainly more urgent issues for the government to address at the moment.
An aide of Dr Wee, Yu Yong Ming, says there is feeling of uneasiness on the ground due to the prolonged oil palm problems that are threatening livelihoods.
Many smallholders with children had to struggle to find money when school reopened recently, he says.
Ayer Hitam MCA chief Ling Tian Soon points out that low yields from oil palm trees are expected to remain so until March/April. The weather between December and March/ April is usually not conducive for the trees, he says.
But the low season this round coupled with the commodity’s low price is a double blow for the smallholders, he says.
Ling says almost all the 90 traditional Malay villages in Ayer Hitam are dependent on oil palm for a living.
Between 60% and 70% of the people in Ayer Hitam are oil palm smallholders, many with 0.8ha to 1.2ha.
“Those with two to three acres already had little to no income in the last three months when the price of the palm fruit dropped below RM300 a tonne,” he says.