29/05/2012 (The Star) - In Malaysia, labour shortage has become the bane of many oil palm plantation players.

The present status of labour-to-land ratio is one man to 10ha of oil palm area. Assuming Malaysia's plan to develop another 500,000ha for oil palm and the labour-to-land ratio is maintained, an additional 50,000 workers will then be required by the oil palm plantation operators by 2020.

This will mean that the total plantation workforce is set at 550,000 workers by 2020.

Therefore, the issue here is whether Malaysia can easily obtain the additional workforce by 2020 despite currently grappling with the mounting foreign labour shortage situation?

Currently, many foreign plantation workers, particularly fruit harvesters and collectors from Indonesia, have opted to head home given the booming oil palm sector in the republic.

Indonesian workers load palm fruits onto a truck at a palm oil plantation in
Talun Kenas, North Sumatra, Indonesia, 09 May 2012. Indonesia palm oil
production is predicted to reach 25 million metric tons this year, reports
stated. Indonesia is one of the world largest palm oil producer. - EPA

One answer to Malaysia's labour woes in plantation perhaps can be via mechanisation.

In fact, some quarters are optimistic that labour-to-land ratio can even hit 1:12 (one man to 12 ha) via the substitution of mechanisation.

Many also bravely assumed that mechanisation will reduce the labour requirements by 90,000 workers, whereby the total labour requirement in the plantations will only be 460,000 by 2020.

Then, the logical question to ask is how realistic will the usage of mechanisation be?

Currently, while most of the plantation sector's midstream and downstream have been fully mechanised, the upstream continues to be labour intensive particularly in harvesting and collection of fresh fruit bunches (FFB).

Of Malaysia's total plantation workers, 75% are foreign workers out of which over 20% are FFB harvesters or collectors mainly from Indonesia.

The Malaysian Palm Oil Board's (MPOB) mechanisation harvesting pole, cantas for example holds promise since it can reduce the labour requirement by 30%. However, cantas to date can only reach up to five metres on the young palms which comprise only about 30% of the total planted oil palm area.

What about the taller oil palm trees which are over 15 to 20 years old, which are still kept by many planters given the good CPO price of above RM3,000 per tonne?

Therefore, many opined that the land-to-labour ratio of 1:12 will not be achievable by 2020 via mechanisation even though it will help to increase the ratio slightly to 1:10.5+.

This will mean that Malaysia has reach the limit of mechanisation and the palm oil industry will need to depend on foreign labour workforce in 2020 with the present level of workers maintained at 500,000.

It is very difficult to attract locals to work as FFB harvestors and collectors as many shun the tough working conditions in the estates despite the Government's announcement on minimum wage and improved living conditions.

Hence, Malaysia will still need to implement appropriate measures to facilitate the recruitment and retention of foreign workers. With Indonesia rapidly developing its own palm oil industry, Malaysia will need to source elsewhere for workers.

In case of a real dire-strait shortage situation, where the labour ratio may reach 1:15, a more organised approach should be considered similar to the establishment of Construction Labour Exchange Centre Bhd to help source and manage workers for the construction sector.