12 October 2001 (Business Times) - Only about 1,000ha of oil palmplantations have been cleared for replanting since the Governmentinitiated the programme last April.

Primary Industries Minister Datuk Seri Dr Lim Keng Yaik said the schemewas getting slow response from smallholders and plantation owners as theywere expecting the commodity price to go up in the near future.

He said some smallholders were also willing to shoulder an increase inproduction cost, up to RM900 per hectare, by maintaining old trees whichwere more than 25 years old.

"They have to replant the old trees as we want to lower the productioncost to RM600 per hectare," he told reporters after opening a newmulti-purpose building at Sekolah Menengah Yuk Choy here yesterday.

He said the Government would not extend the incentives given forreplanting to next year although it received lukewarm response fromplanters.

Under the scheme, a smallholder or plantation owner can apply for anRM1,000 incentive for every hectare oil palm area they have replanted.

The Governmnet had allocated RM200 million for the scheme which waslaunched to help stabilise palm oil prices by reducing production.

Dr Lim said a total of 185,000ha of oil palm plantations and smallholdingshad been identified under the scheme but most of them had adopted a "waitand see" attitude.

He said recent attacks on Afghanistan would also have a negativerepercussion on the commodity prices because shipping companies wereafraid to send their liners to the area while insurance companies hadincreased the premium.

"We are monitoring the situation closely. The effects are yet to be seenbut we have to prepare for the worst.

"The commodity price is still above RM900 per metric tonne at the moment,"he said.

The price of oil palm has yet to stabilise after a deep plunge last yearand it had dropped to as low as RM700 per metric tonne in February thisyear but bounced back to RM1,300 five months later.