23/02/2025 (Borneo Post Online) - Let me play devil’s advocate for a moment. As I dive in, I hope my conversation resonates with those who appreciate a mix of impassioned, raw emotion and yes — some unapologetic ranting. This isn’t a typical calculated argument. It’s a challenge to confront uncomfortable truths head-on.

The clock is ticking, and mankind’s increasing demand for edible oil could well be our downfall. We may be teetering on the edge of a catastrophe, and let’s be honest – the writing’s already on the wall. If we don’t face up to the hidden menace creeping over the oil palm supply chain, we might find ourselves trapped in a never-ending cycle of decline, watching everything crumble while we sit idly by, hoping it’ll all somehow sort itself out. Spoiler alert: it won’t.

Alright, let’s stir the pot a bit — someone has to, right? And since I’m retired, I guess the mic’s mine to grab. I’ve accumulated not just a pinch of “salt,” but a whole shaker’s worth. And you know what? I’m still fired up about what’s happening here. Sure, palm oil prices are bullish for now, but don’t be fooled, it’s far from sunshine on the ground. So, if you’re up for it, let’s dive in. If not, feel free to skip this altogether.

The Inconvenient Truth

The debate over palm oil — some attacking it, others defending its sustainability — distracts from the real threats undermining this industry. If we’re not careful, we could face disastrous consequences, not just for palm oil, but for global food production and sustainability.

Yes, issues like EUDR, LULUCF, ESG, climate change, market access and trade barriers have dominated too much space, but the real battle isn’t fought in meeting-rooms or buried in reports. It’s unfolding on the ground—on the 5.6 million hectares of oil palm plantations, where planters are bogged down by daily operations, fatigued from compliance documentations, witnessing unharvested crop and facing rising costs.

The oil palm supply chain is no stranger to challenges, but for this discussion, let’s zero in on my top six “elephants in the room” — the pressing issues stomping through the industry at ground level, and that’s the most I can cram into a single news-page! Most stakeholders are well aware of the issues and have engaged in countless discussions, yet few solutions have been implemented, and even fewer follow-ups to bring them to fruition. The interconnected issues form the very foundation of the entire supply chain — ignore or under-addressed them, and the entire structure risks crumbling. Pay-checks come, and concerns remain low. But are we truly aware, or are we just talking without action, waiting for someone else to step up? Too often, it’s “Not my job.” Meanwhile, the ticking time bomb grows louder. Inaction today leads to irreversible damage tomorrow. Can we take action and drive real change?

1. Mind the Gap: Production vs Productivity

Let’s be honest — our yields aren’t stagnating, they’re declining. Land expansion? Not happening. The only way forward is productivity gains, but after decades in the industry, we are still waiting for a true game-changer. Remember the so-called breakthroughs we keep reminiscing about — DxP hybrids and pollinating weevils? Sure, they were revolutionary in their time, transforming the industry and boosting yields. But let’s be honest — that was yesterday’s news. And let’s be real — band-aids don’t fix bullet wounds. Today’s realities demand more.

Now, let’s clear up a common misconception: production versus productivity. Production is the total crop output, but productivity is about how efficiently we extract crop from every hectare. And we’re underperforming big time. National average FFB yields sit at 16.7 MT/ha, while top-tier estates hit 25-30 MT/ha. That’s a glaring gap. Think about it — just 1 extra tonne of FFB per hectare per year (spread over 12 months, mind you!) from the 5 mil mature hectares would translate to 5 million tonnes of FFB. At RM1,000/mt, that’s a cool RM5 billion in lost revenue. Now, factor in the 31.7% total taxes (as per MEOA’s calculation), and we’re looking at RM1.6 billion in government revenue vanishing into thin air – from opportunity of just 1 tonne FFB!

Solutions? Absolutely. There are available and ongoing innovations with advanced planting materials aimed at boosting yields. However, without addressing crop recovery efficiency — such as the lack of harvesters or effective crop evacuation — all the increased production in the world won’t make a difference. This highlights the interconnectedness of all these challenges.

And here’s something to chew on: if India and China (“Chindia”) each upped their palm oil intake by just one tablespoon per person per day, Malaysia’s entire supply wouldn’t be enough. We’ve been chasing 20 million tonnes of CPO per annum for what feels like forever. But without closing the productivity gap, we’ll stay stuck. Palm oil is more than just a commodity — it’s a shared destiny for mankind, produced by equatorial nations to nourish and fuel the world. The land, market and world demand more from us. We shall swim or sink together.

2. ‘Replant or Perish’ Conundrum

Over the years, I’ve stirred the pot with the “Replant or Perish” narrative. Let’s be real: palm oil prices may seem promising right now, but don’t be fooled. Costs are rising, worse if productivity is low and the aging trees are getting older by the day. For many planters, reinvestment is nothing but a distant dream, and without it, we’re hurtling toward a full-blown crisis. Today, a good replant to maturity can cost up to RM30,000 per hectare. Go and do the maths against the area to be replanted. When planters factor in the sky-high cost of replanting into their cash flow projections, many will find themselves deep in the red, even with the strong prices. The sad truth is that the solution many will turn to is delayed replanting – putting off the problem until it’s someone else’s headache. But this short-sightedness only kicks the can further down the road, and we’ll all pay the price sooner or later.

Sure, we might see higher palm oil prices, but here’s the catch – if we don’t have the crop from the aging and tall trees to take advantage of those high prices, what good does it do? It’s like being invited to a fancy dinner, but you show up without an appetite – you’re left with nothing to feast on. And let’s not forget the bigger picture: the real victims here aren’t just the planters; it’s the poor consumers included who may end up footing the bill for our inability to solve this. While we’re watching high prices, they may also be scrambling for alternatives, as we sit with lower crops. Higher prices with nothing to sell. Doesn’t sound like a win, does it?

3. Ganoderma: The Ticking Time Bomb

Replanting is critical, but let’s not fool ourselves — there is a monster lurking underground. The fungi disease: Ganoderma. Here’s the brutal truth: we can replant until kingdom come, but if we don’t fix the Ganoderma problem, we’re just replanting failure. Sanitation buys time, not a cure. Meanwhile, Ganoderma spreads like wildfire, eating away like cancer at productivity one tree at a time. It’s not just a silent killer — it’s a full-blown industry crisis in the making.

And yet, while we endlessly debate other topics, Ganoderma only gets a footnote. Priorities shift, leadership rotates, budgets shrink — but this silent killer keeps marching on, undeterred. Let’s be real: if someone actually cracks the Ganoderma code, forget industry accolades — they deserve a Nobel Prize. So, who’s stepping up to lead this fight at a national level? Because right now, it feels like we’re all just passing the baton, or playing musical chair. Do we have a finishing line in sight?

4. The Lifeblood of Oil Palm: Guest Workers

Want the quickest way to boost crop production? It’s simple — workers. Skilled, trained hands in the fields are essential, and they’ll remain critical until more long-term solutions are implemented. The industry is truly grateful to the Plantation and Commodities Minister for his unwavering commitment and continuous engagement within the government. His tireless efforts to secure exemptions for guest workers in the plantation sector are both welcome and commendable. Kudos to him for championing this cause and successfully bringing it to fruition for the industry.

However, despite these strides, policymakers still seem to miss this fundamental reality, even though it’s the lifeblood of production — and let’s not forget, government tax revenue. Plantations aren’t just any other industry; they require sector-specific solutions, not one-size-fits-all policies crafted far removed from the realities of the fields.

Here’s the hard truth: crop losses are still happening. And in the oil palm business, planters don’t earn a cent unless their crops reach the mill weighbridge. Anything lost in transition — left on the tree or ground, dropped in the drains or buried along the way — is a total write-off. Meanwhile, the costs — fertilisers, upkeep, everything — are already spent. We’re pouring money into growing crops, yet letting them slip away before they even count.

5. Mechanisation: The Missing Piece

Mechanisation — the buzzword often thrown around when plantations are labelled outdated or reluctant to invest. But let’s be real for a second: are we genuinely seeing solutions, or just hyping up the latest shiny tech gadget that sounds good in a pitch?

Policymakers and tech enthusiasts, many of whom have never set foot on a plantation or seen firsthand the daily struggles, throw around terms like IR-4.0 or 5.0, AI, robotics, lasers and drones as if they’re the miracle-fix we’ve all been waiting for. And without fail, someone will say, “Remember how phones evolved into today’s iPhone?” Oil palms aren’t pocket-sized gadgets; they’re towering organic trees spread across different soils and unpredictable terrains, baking under the sun or drowning in monsoon rains. They are not grown in greenhouses and there are differences between annual and perennial trees. If a true mechanisation breakthrough existed, planters wouldn’t need convincing —they’d be the first to adopt it.

Guest workers? Their numbers are shrinking fast. Meanwhile, our neighbour Indonesia has this numbers to share: 3-6-8. They have 3x our oil palm planted area — meaning they need workers themselves. They also have 6x our national landbank (hello, potential expansion!) and 8x our population as consumers. We export 90% as we can only use 10% locally. We are not in the same business game anymore. And let’s not even talk about getting locals to flock back to plantation 3D jobs — that ship sailed ages ago.

It’s time to separate hype from reality. Sure, mechanisation has made progress in some areas like crop evacuation and field upkeep, but we’re still far from solving the biggest challenge: harvesting tall trees. The truth is, many so-called “success stories” have yet to address the core issue.

While some technology can improve efficiency in specific areas, it’s not a one-size-fits-all solution. We’re not even close to where we need to be in terms of scalability and cost-effectiveness. Without real, practical breakthroughs, we’re just spinning our wheels. The stakes are higher than ever: it’s no longer just ‘Replant or Perish’ — now, it’s also ‘Mechanise or Perish.’ If anyone cracks the code for cost effectively harvesting bunches of tall oil palm trees, they deserve another Nobel Prize, because that would be the Holy Grail of mechanisation.

6. Talent and Training

Field management standards are declining, making it crucial to secure talent and provide effective training for planters to ensure the long-term success of the oil palm industry. Quality and effective plantation management is the key to maintaining productive plantations, but the quality of management is declining, a concern talked about but often no follow-ups. The industry struggles to attract skilled talent, with many potential workers drawn to more competitive sectors offering better pay, flexibility and career growth.

When adjusted for inflation, the salary of a planter in the yesteryears compared to today may reveal stagnation or decline.

Training programmes are often inadequate, focusing more on technical skills and neglecting vital skills like leadership, problem-solving and adaptability. With an aging workforce, there’s an urgent need to mentor and train younger generations to step into management roles. The industry must invest in comprehensive training programmes, improved compensation and set clear career paths to attract and retain skilled talent to avoid a talent crisis.

Taking Ownership and Driving Real Change

The industry stands at a crossroads. Everyone is aware of the issues and seeks solutions, yet we remain trapped in an endless cycle of committees, task forces, and roundtable discussions. Reports are written, the press highlights the key points, but soon everything is forgotten, and we find ourselves circling back to the same old discussions. The real question is: who are the decision-makers? Somebody else?

Leadership across stakeholders comes and goes, and with each change, we reset the conversation — rinse and repeat. We must acknowledge the vast differences in stakeholder perspectives, the bureaucratic tug-of-war, and the ever-present question: who actually makes the final call? Too often, we end up with crafted recommendations that sit on a shelf collecting dust.

What we need is result-driven leadership across the supply chain. A structured, solution-focused effort must be spearheaded at the highest level, with the political will and commitment to break the cycle of endless deliberations. Otherwise, we will keep spinning in place, with each leadership transition resetting progress like a faulty GPS.

Real change in the oil palm industry must come from within the planters themselves. The responsibility to confront the industry’s major issues rests squarely on their shoulders. Yes, the government must provide supportive policies, a stable workforce, and a conducive environment — but beyond that, it’s time for the industry to step up and take ownership of its future. The painful truth is that many companies appear to hesitate to invest in the sector. Take the example on replanting. Let’s be clear: that’s not a cost, it’s an investment for the future. The question is — do we believe in that future?

For too long, complacency has ruled. The high prices have provided a temporary cushion, largely thanks to Indonesia’s biodiesel programme, but we mustn’t be fooled. When prices eventually stabilise, we’ll see just how many players can truly survive. The game is simple: Yield, yield and yield. This is not the time for complacency. It’s a time for reinvestment, a relentless focus on improving productivity and commitment to long-term sustainability.

The oil palm industry is a national asset. It is unlike any other industry — it’s organic, unique, complex, and issues intertwined across multiple ministries and agencies. To address the deep-rooted challenges it faces, a collective, focused effort is needed. We require a national inter-ministerial platform —one that is not just empowered and accountable, but also backed by unwavering political will and the mandate to take bold, decisive action for the sector. It’s time for high-impact solutions that will drive real, transformative change.

Is it not fair to demand more of our leaders’ attention for an industry that spans 5.6 million hectares, generates over RM100 billion in revenue, and contributed more than RM11 billion in taxes last year? An industry that supports 4 million people, along with their dependents, and fuels the livelihoods of 450,000 smallholders? And not adding the spin-off economies and multiplying effects. A multi-ministerial task force should be formed to bring together all relevant ministers who hold the key to resolving the interconnected issues facing the oil palm sector. This task force should report directly to the Minister, and ultimately to the Prime Minister.

This isn’t just a wake-up call —it’s a full-blown Code Blue alarm, and we’ve hit snooze for far too long. What we need now are concrete, actionable strategies that serve as building blocks for real progress: boosting yields, accelerating replanting, tackling Ganoderma, implementing enabling policies, unlocking the harvesting holy grail, securing talent succession — and much more. Many planters in the field believe there may be no single “holy grail” solution to any or all the issues, but rather a series of small steps that, collectively, can tip the scale.

Maybe, it’s time for hard-hitting conversations and even harder decisions. We’re not just kicking the can down the road — we’re strangling the golden goose in real time. And if we don’t move fast, that goose won’t just be dead — it’ll be fossilised.

I’ll stop playing devil’s advocate—for now.

P.S. I hope the POC Conference 2025, happening from 24-26 February in KL, sparks meaningful conversations on these pressing issues. Wishing everyone an insightful and productive conference!

https://www.theborneopost.com/2025/02/23/oil-palm-inconvenient-truth-brewing-crises/