May 19, 2003 - THE Primary Industries Ministry has set aside RM28 millionunder the second leg of the oil palm replanting incentive scheme in itsefforts to sustain the current crude palm oil price in the internationalmarket.

Its Minister Datuk Seri Dr Lim Keng Yaik said the scheme was relaunched onMay 1, a follow-up to the successful first leg scheme which had reducedpalm oil stocks and fresh fruit bunches production, and culminated inbetter crude palm oil prices.

Deputy Prime Minister Datuk Seri Abdullah Ahmad Badawi had announced aRM200 million allocation in March 2001 to encourage estate owners andsmallholders to replant their plantations with new oil palm trees asmeasures to cut back on excessive palm oil stocks and stabilisethe pricefor the commodity.

Dr Lim said under the scheme, which was launched in July 2001, theGovernment had targeted 200,000ha to be replanted with new clones byoffering RM1,000 to smallholders for every ha which was replanted.

By end of June last year, some 172,000ha had been replanted, which cutback crude palm oil production by 500,000 tonnes, thus helping to push theprice up to around RM1,400 per tonne,” he told reporters after launching amedical camp for the public in Beruas, Perak, yesterday.

According to Dr Lim, the second leg of the scheme will offer RM500 forevery ha replanted but the scheme is now opened only to smallholders whoown less than 40.5ha.

A smallholder is defined as a planter who owns less than 40.5ha ofcultivated land, either under the Risda, Felcra and Felda schemes orself-owned.

Asked about India’s tariff reduction on palm oil, he said this was duelargely to numerous ministry-to-ministry and agency-to-agency negotiationsbetween the two countries.

India currently imports about 3.6 million tonnes of palm oil while Chinais the second largest importer with about 2.4 million tonnes.

However, Dr Lim said China is the biggest importer of Malaysia’s palm oil,making up 80 per cent of its purchase followed by India which importsabout 50 per cent.