Malaysia sets up RM100mil fund for smallholders to replant palm oil
24/01/2024 (New Straits Times), Bangi - The government, through the Ministry of Finance and Agriculture and Commodities Ministry, has established a special fund for the Smallholder Palm Oil Replanting Financing Incentive Scheme (TSPKS 2.0).
Plantations and Commodities Minister Datuk Seri Johari Abdul Ghani said the scheme, which involves an allocation of RM100 million, will be fully distributed by Agrobank for the replanting of oil palm, specifically benefiting palm oil entrepreneurs and individual smallholders.
Applications are open starting from Jan 15 and the forms can be obtained from any nearby Tunas/Agrobank office in the smallholder's area.
"The provided funds consist of a grant component (50 per cent) and another part is financing (50 per cent) for individual smallholders.
"The disbursement of funds for both the grant and financing components will be entirely handled by Agrobank.
"However, the repayment by applicants will only involve 50 per cent (including two per cent interest) of the total disbursed amount.
"This initiative aims to benefit private small oil palm planters with a total land area of 5900 hectares," he said at a press conference during the Malaysian Palm Oil Board's Excellence Awards 2023 in Bangi today.
According to Johari, the financing amount is RM14,000 per hectare for small oil palm planters in Peninsular Malaysia, and RM18,000 per hectare for small oil palm planters in Sabah and Sarawak.
The financing is in a combination of grants and funding for the following activities, namely the preparation of planting areas, purchase of high-quality oil palm seedlings, and the maintenance of the plantation until the oil palms reach three years of age (36 months) after planting.
On that note, Johari said the government is committed to ensuring the long-term economic viability of the palm oil industry.
He added that his ministry's main focus has been to engage with all stakeholders in this sector to identify and address specific issues affecting the country's palm oil performance.
"Besides labour, a primary focus for industry players, issues such as plantation management, palm replanting, and timely fruit harvesting are emphasised.
"Research and development (R&D) efforts have the potential to enhance the overall productivity of the palm oil industry.
"Furthermore, mechanisation and automation can improve labour efficiency and overall productivity," he noted.
Johari also highlighted that the global demand for palm oil is expected to increase with the growing world population.
He said considering limited resources, Malaysia, as the world's second-largest palm oil producer, must seize this opportunity by enhancing productivity and production.
"The global food security issue urges countries like Malaysia to boost productivity in agricommodity production to meet the rising demand," he said.