04/03/2009 (Bernama), Kuala Lumpur - The Government has adopted new strategies and extended aid to smallholders tide over with their living expenses following the drastic fall in rubber, oil palm and pepper prices, the Dewan Rakyat heard today.

Deputy Minister of Plantation Industries and Commodities A. Kohilan Pillay said since January crude oil palm price had stabilised between RM1,800 and RM1,900 a tonne following measures to strengthen the commodity's price.

"This followed strategies taken by the government, including offering incentives for replanting of uneconomic rubber trees, using palm oil for biodiesel, allowing duty-free crude palm oil exports, financing raw palm oil exports via the Palm Oil Credit Payment Arrangement scheme and diversifying palm oil applications," he said when replying to Aaron Ago Dagang (BN-Kanowit).

Aaron wanted to know what are the government's strategies and assistance to help smallholders following the sharp drop in rubber, oil palm and pepper prices.

Apart from the initiatives, Malaysia and Indonesia, world's major palm oil producers, have also agreed to cooperate to strengthen palm oil prices, including carrying out replanting programmes and investing in downstream industries.

To ensure rubber price was at a profitable margin, both to smallholders and rubber products producers, he said the ministry has taken immediate measures, including making arrangements with major rubber producers like Indonesia and Thailand, to coordinate to reduce their rubber exports.

"This is done through an agreed mechanism to ease the pressure on rubber prices and to restore market confidence," he said.

Kohilan said the government would also expedite replanting of old and unproductive rubber trees to delay natural rubber production," he said.

For affected smallholders, Kohilan said the ministry, through the Malaysian Pepper Board, has mapped out strategies, including encouraging pepper farmers to produce value-added pepper at their farms instead of producing normal grade pepper.

The ministry had also supplied agriculture inputs and equipment to pepper farmers to help them maintain their farms well beside easing their financial burden to buy agriculture inputs resulting from low pepper prices in the market.

"The ministry via the Malaysian Pepper Board has also stepped up market promotions for pepper including seeking new markets for the commodity," he added.