KUALA LUMPUR, June 26 (Bernama) -- The incentive scheme for oil palmreplanting has been continued effective last month with assistance ofRM500 per hectare, Primary Industries Minister Datuk Seri Dr Lim KengYaik, said here today.

He said that under the scheme all smallholders, including those with farmsof less than four hectares, are eligble to apply.

However, he hoped that the cooperative could help with the applicationexercise as this time around there would be more who are eligble to apply.

All applications would be submitted to the Malaysian Palm Oil Board (MPOB)to be processed, he said in officiating the Koperasi LadangPekebun-pekebun Kecil Malaysia Bhd.

Dr Lim said that the government has provided attractive incentives toencourage the replanting of oil palm with new high quality clones.

He said that efforts are being carried out to not only reduce the supplyof palm oil in the market to increase the price of the commodity but toalso enhance the revenue prospects of smallholders in the long term.

Currently crude palm oil price is between RM1,500 and RM1,530 per tonne.

Dr Lim said that with the planting of new clones and good agriculturepractise, between 35 and 40 tonnes of fresh fruit bunches could beobtained a year.

With extraction rate of 25 percent, some eight to 10 tonnes of crude palmoil could be produced.

As for rubber, the minister said that of the 589,366 tonnes produced in2002, a total of 504,487 tonnes or 85 percent were produced bysmallholders.

Dr Lim also said that the reduction in rubber plantation area should begiven serious attention with the cooperative involved teaming up withsmallholders to expand rubber plantation area with either latex clones ortimber latex clones.

A lot of areas planted with rubber had been replaced with oil palm whichgave better returns.

As a result, oil palm plantation area has increased to 3.8 millionhectares in 2003 from 1.7 million hectares in 1990 while rubber plantationfell to 1.3 million hectares in 2003 from 1.83 hectares in 1990.