23/10/2012 (The Star) - During the colonial days, the basic rule of thumb among estate operators was to undertake 5% replanting activities annually, regardless of whether the price of the crop was north or south-bound.

This practice, to a certain extent, is still being adopted by well-managed oil palm plantations in Malaysia, which in turn resulted in a good balance of both young and mature palm trees age profile.

However, the least can be said of the country's state of oil palm age profile. Given such strong crude palm oil (CPO) prices of above RM2,500 per tonne in the the past seven years, replanting activities among the smallholders and plantation companies had taken a back seat or often overlooked as these operators want to continue reaping profits from the high prices.

Lately, however this bullish sentiment has taken a turn when CPO prices dwindled amid high palm oil stocks which had risen above two million tonnes since February. They hit a record 2.5 million tonnes last month the highest in history.

This turn of event saw the Government, under Budget 2013 to quickly allocate RM432mil for an aggressive replanting drive nationwide.

Of the country's five million ha of total planted oil palm area, 30% to 40% represents oil palm trees of over 20 years old and most of them belong to the smallholders.

Therefore, the bulk of Government's budget is solely for the independent smallholders to embark on new planting and replanting of unproductive palm trees including those who own 40ha or less that are eligible for the replanting grant.

Pemandu chief executive Datuk Seri Idris Jala said that RM7,500 per ha would be granted to smallholders in Peninsular Malaysia to undertake replanting and RM9,000 per ha to smallholders in Sabah and Sarawak. In addition, RM500 in subsistence allowance will be given to farmers whose income is solely dependent on oil palms should they undertake replanting while waiting for the palm trees to mature within three to four years. However, some quarters argued that the allocation to smallholders was insufficient and should be in the region of between RM10,000 and RM12,000 per ha in view of the high costs of fertiliser and pesticides.

Furthermore, similar replanting incentive should also be extended to the the private plantation operators.

To accelerate the country's replanting programme, the Government should also incentivise the entire plantation operators and not only confine to the smallholders.

Private plantations currently contributed the bulk or about 60% of the country's CPO production and represents three million ha of the total planted area.

It is believed that the Plantation Industries and Commodities Ministry is aware of such a request by plantation operators seeking for RM1,500 to RM2,000 per ha in terms of replanting incentive.

Furthermore, private plantations will be able to easily tackle replanting faster and on a larger scale versus those by smallholders.

Many quarters also said that by incentivising the entire plantation sector, the Government's goal to aggressively accelerate the replanting programme nationwide could be easily achieved in a shorter time frame.

At the same time, via aggressive oil palm replanting, Malaysia is envisaged to achieve a higher annual oil palm yield of 26.2 tonnes per ha in 2020 from 21 tonnes currently.