Kuala Lumpur 4 February. 2002 (Business Times) - THE Government hasgiven smallholders an extra six months to capitalise on a special schemeto replant their oil palm and rubber holdings.Industry sources said of late, improving commodity prices have discouragedsome smallholders from clearing their land to grow new oil palm trees.As at January 15 this year, only 80,000ha or 40 per cent of oil palm treeshave been replanted, well short of the 200,000ha target earmarked forreplanting by the end of last year.“The scheme has been extended to June 30 this year because smallholdersare reluctant to cut down their ageing trees,” an industry source toldBusiness Times.The Government’s oil palm replanting scheme was first announced in Marchlast year with the first round to end on June 30 last year.Due to the poor response from the smallholders, the Government hadextended the scheme to December 31 last year. At that time, only 136ha hasbeen replanted.Prices of crude palm oil (CPO) currently fetch between RM1,100 a tonne andRM1,200 a tonne in the market compared with an average of RM690 a tonne, a10-year low, in February last year.Fresh fruit bunch prices, which are more relevant to smallholders, havemeanwhile shot up 100 per cent to RM200 a tonne compared with RM100 atonne ex-farm previously.Under the scheme, the Government has allocated RM200 million in which oilpalm smallholders are paid RM1,000 per ha to cut their oil palm trees agedmore than 25 years old while rubber smallholders are paid RM1,100 per ha.The Malaysian Palm Oil Board (MPOB) is the sole Government agency handlingthe scheme. Statistics showed that as at January 15 this year, only RM40million or 20 per cent of the RM200 milllion has been disbursed to thesmallholders.The scheme is part of the RM500 million package announced by theGovernment in March last year to help oil palm and rubber growers copewith low commodity prices.The Government had also formed a sub-committee on raising the income ofthe smallholders, headed by Deputy Prime Minister Datuk Seri AbdullahAhmad Badawi.To be eligible for the scheme, smallholders must first register with theMPOB before carrying out replanting activities using their own financesbefore claiming them from MPOB.The scheme is open to all smallholders including those from the FederalLand Development Authority, Federal Land Consolidation Authority, RubberIndustry Smallholders Development Authority, private estates andgovernment agencies.As at January 15 this year, smallholders had applied to replant a total of178,000ha of their ageing trees, of which 80,000ha had been replanted andpayments for 40,000ha were already paid out by MPOB.The scheme is aimed at reducing total productive oil palm area in thecountry by 200,000ha and also cut current national CPO output, whichtotalled 11.8 million tonnes last year, by 10 per cent or 1.18 milliontonnes by end-2002.This measure is aimed at curbing oversupply and boost prices against theworld’s other competing 16 edible oils.Primary Industries Minister Datuk Seri Dr Lim Keng Yaik had on severaloccasions voiced his concern over the years of the lack of cooperationdemonstrated by the smallholders in supporting the Government’s replantingefforts.Dr Lim had said that he was worried rising CPO prices will leave thesesmallholders happy to just continue harvesting their crops.