23 August, 2002 (Business Times) - THE Malaysian Palm Oil Board (MPOB)has formalised a committee to assist the Government during tradenegotiations at World Trade Organisation’s (WTO) levels.

Primary Industries Minister Datuk Seri Dr Lim Keng Yaik said the committeewill be preparing arguments for Malaysia to present at the new WTO roundwhich will focus on agricultural issues.

He said it is time for Malaysia to rise and be heard on the interferenceby certain developed countries that used numerous unscrupulous tactics toprotect their farmers and agriculture sector.

“Despite all the pledges made under the WTO in the interest of fair trade,these countries continue to exploit loopholes and flout the very principlethat the trade body is established on,” he said at the Malaysian Palm OilPromotion Council’s annual seminar in Ipoh yesterday.

This goes to show that while the rhetoric might be suggesting intensecommitment to free and fair trade, the realities are quite the opposite,he added.

“We all know, if left to the marketplace, the cycle will take care ofitself but the problem arises when there is too much intervention in themarket... Such interference often always distorts supply and prices,” headded.

Recently, the US has increased the allocation of subsidies under its newUS Farm Law to about 80 per cent to US$190 billion (US$1 = RM3.80) tofinance agriculture subsidies over the next five years.

Other developed nations, including the European Union and Japan, are saidto have also meddled in the marketplace by imposing market distortivesupport instruments. Such support instruments go against market rationale,pushing up production while prices keep thumbling.

Dr Lim said Malaysia would also try to get India to reduce its hightariffs imposed on crude palm oil and palm olein compared to the lowertariffs the country imposed on crude and processed soya bean oil.

Currently, India imposes 65 and 98 per cent tariffs on Malaysian crudepalm oil and palm olein, respectively, while imposing 45 and 50.8 per centtariffs on crude and processed soya bean oil.

“It is this kind of disparity that Malaysia is concerned with. This kindof practice goes against the grain of the WTO agreement,” he said.

He told reporters later that while local producers are making huge profitsfrom the high crude palm oil price, they should also at this point in timetake the opportunity to look inwards at their operational capabilities.

He said local palm oil producer should take necessary steps to increasetheir productivity and diversify into palm oil related products.

“Local producers should embrace newer oil extraction technology which willdefinitely improve on the output. The technology currently used does notguarantee optimum oil extraction,” he said, adding that the big producersmust set an example for the smallholders to follow.

Besides latest technology, local producers are also urged to replace theiroil palm trees with trees from new clones which can produce up to eighttonnes of fresh fruit bunches per hectare per year.