KUALA LUMPUR, Wed. 30 January, 2002 ( Business Times) - Many oil palmsmallholders are having second thoughts about taking part in a governmentscheme in which they are paid to have their ageing palms felled.

Rising palm oil prices have, instead, left them happy to continueharvesting their crop.

Crude palm oil prices, which were battered incessantly in the first halfof last year and dipped to a 10-year low of below RM700 per tonne, haverisen sharply over the past few months and are now hovering around RM1,200per tonne.Fresh fruit bunch prices, which are more relevant to smallholders, havemeanwhile gone up from below RM100 per tonne to around RM200 per tonneex-farm."(With the better prices) some smallholders, whose applications have beenapproved, have decided not to fell their trees. Some have even withdrawntheir applications," said an official of Malaysian Palm Oil Board.He, however, could not provide the actual number of those who had changedtheir mind.MPOB is the agency disbursing the RM200 million allocated by theGovernment for its replanting incentive scheme, a major component of theRM500 million package announced in March last year to help oil palm andrubber growers cope with low commodity prices.MPOB statistics show that as at Jan 15 this year, RM40 million of theRM200 million had been disbursed to the participants — independentsmallholders as well as those in Felda, Felcra and Risda land schemes,private estates and government agencies.In total, the oil palm growers had applied to replant 178,000 hectares oftheir ageing trees. Of this, 80,000 hectares had been replanted andpayments for 40,000 hectares already made by MPOB.The scheme is aimed at reducing total productive oil palm area in thecountry by 200,000 hectares, to cut current national CPO output of around11 million tonnes a year by about 10 per cent and boost prices.Under the scheme, oil palm growers are given RM1,000 to have each hectareof palms that are more than 25 years old replanted.Meanwhile, Malaysian Rubber Board statistics showed only RM15 million ofthe RM100 million allocaton has been disbursed as at the end of last yearvia another scheme under the RM500 million package.Smallholders are paid an additional 30 sen for each kg of latex (drycontent) and 15 sen for each kg of cuplumps.