KUALA LUMPUR, Fri. 30 March 2002 (NSTP) — The National Association ofSmallholders wants a government agency or company to be set up to buy,grade and process palm oil produced by smallholders and extend advisoryservices to them.

It feels that smallholders need special attention because they areexpected to play a bigger role in the future as plantations will becontinuously affected by labour shortage and related problems. "Withproblems facing plantations, I foresee that in seven to 10 years from now,the palm oil smallholders will be left to carry the can. This is alreadythe trend in rubber," Nash president Datuk Mazlan Jamaluddin told NewStraits Times.

"Thus, we should have something ala Mardec to help traditional orindependent oil palm smallholders — those not in Felda or other governmentland schemes." Mardec, a corporation under the Primary IndustriesMinistry, acts primarily as the buyer of last resort for natural rubberproduced by smallholders. It also processes the commodity and markets it,including overseas.

The independent smallholders now account for about 10 per cent of thecountry's total crude palm oil output or more than 11 million tonnes ayear.

Malaysia is currently the world's top CPO producer. But with secondlargest and lower-cost producer Indonesia agressively expanding its oilpalm areas, including through replanting rubber with oil palm, it isexpected to overtake Malaysia's position within this decade.

When this happens, Mazlan, who is also Mardec chairman, believes that oilpalm in Malaysia will become a smallholders' crop.

Furthering his case for a new company or agency, Mazlan said none of theexisting mills — about 300 of them in the country — belonged to anysmallholder groups.

"The independent smallholders feel neglected and abandoned. Our proposalis to fill the vacuum, just like Mardec in the case of rubber.

"It will go a long way towards helping smallholders who have faith in oilpalm cultivation." Mazlan, a lawyer by training, has been active in Nashsince 1975 when he was appointed the association's firstsecretary-general.

He took overthe helm from May last year following the death of thenpresident Datuk Ahmad Arshad.

Mazlan said the proposed company or agency could also be run by thenational smallholders' co-operative, or even Nash, if the Governmentallowed it.

He also proposed that the Malaysian Palm Oil Board study the possibilityof setting up mobile mills to serve traditional smallholders.

"The olive farmers have their own presses. Oil palm fruits are alsoperishable but once the CPO is extracted using these mobile presses ormills, the quality can be maintained." At present, independentsmallholders send their fresh fruit bunches to private mills but therehave been doubts whether they are getting the best deals in terms of oilextraction rates and FFB prices.

As for the plantation sector, Nash suggested that a two-tier salary systembe established, one for locals and the other for foreign workers.

Mazlan proposed that Malaysian citizens working in plantations be offeredadditional benefits such as those dealing with health and contribute toEmployees Provident Fund.

"Probably the Economic Planning Unit should study this. We should alsotake advantage of our cutting down of Indonesian workers and give priorityto locals.

"You dangle the right remuneration, and they (the locals) will work," headded.