15/05/2012 (The Star) - The Government will introduce new measures and incentives to ensure the long-term competitiveness of the local palm oil industry in the world market, said Plantation Industries and Commodities deputy minister Datuk Hamzah Zainudin.

He said an announcement would be made soon but declined to give the details.

“The policy makers will be meeting this week to decide on the proactive measures and strategies after getting the feedback and proposals from the players in the upstream, midstream and downstream sector,” Hamzah told reporters after opening the two-day Palm industry Labour: Issues, Performance and Sustainability Seminar 2012 organised by the Malaysian Palm Oil Board (MPOB) yesterday.

He pointed out that the Government needed time to identify and analyse the respective proposals in efforts to come up with a win-win solution for the all players.

Useful gadget: Hamzah holding a Cantas motorised cutter which has raised worker productivity in harvesting FFB.

For the past eight months, independent palm oil refiners had urged the Government to come up with an immediate solution to help them counter the impact of the low palm oil tax structure by Indonesia which had affected their profit margins and made their business uncompetitive.

The move widened the tax gap between processed products and crude palm oil (CPO), giving Indonesian refiners a feedstock-cost advantage over Malaysia.

Among the proposals made by Palm Oil Refiners Association of Malaysia was the abolition of the duty free CPO export quota and review of the CPO export tax policy.

Earlier, Hamzah said the local oil palm plantation was facing a severe labour shortage of 35,473 workers.

“There is a need to undergo a paradigm shift from one that is heavily reliant on labour to mechanisation as their industry progresses,” he added.

In Malaysia, the plantation sector is heavily reliant on foreign workers. Of the total 491,339 workers in the sector, 76% are foreigners mainly from Indonesia, who were employed as fresh fruit bunches (FFB) collectors and harvesters, fertiliser applicators and weeders.

Hamzah said mechanisation such as harvesting machine Cantas has proven to raise worker productivity in harvesting FFB and reducing labour.

Others include farm machinery “Grabber”, harvesting tools and field machinery for FFB including for use in peat areas.

IOI Corp Bhd executive chairman Tan Sri Lee Shin Cheng said: “For the time being, the Government must allow more foreign workers into Malaysia to work as FFB harvesters and fruit collectors in our plantations.”

Prior to the introduction of more efficient mechanisation tools and more locals become interested to work as a plantation worker, Lee pointed out that the foreign workforce was inevitable.

MPOB chairman Datuk Seri Utama Shahrir Abdul Samad said issues related to the plantation workers had become critical. even in middle management levels such as supervisors, the gap are now filled by foreign workers.

He also said MPOB was currently training local youths to attract them to work in oil palm plantations.