03 April 2001 (Busines Times) - THE plantation sector, while excited aboutthe Government's RM600 million allocation to finance replantingactivities, sees the action as giving temporary results.Sabah-based Incorporated Society of Planters chairman Emerson LiauYong Hwa said the allocation works as a short-term measure, giving only atemporary boost."The RM600 million fund shows the Government's compassion to alleviate thesector's hardship.However, I feel it does not address the issue as a whole," he toldBusiness Times in a telephone interview.Last Tuesday, Prime Minister Datuk Seri Dr Mahathir Mohamad announced afiscal stimulus package to assist Malaysia in overcoming the US economicslowdown.The RM600 million replanting allocation was part of the package.Liau said smallholders can utilise the fund to replant all the ageingtrees, which should help check the glut for a while."But the whole depressed prices scenario will be repeated after three tofive years when the oil palm trees mature.The whole pandemonium will start all over again," said Liau.He added that the Government should concentrate more on diversifying andmax-imising land use, rather than focusing on the replanting of oil palmper se."There is so much of oils and everybody is planting oil palm.After three years, the whole problem will recur."As an alternative, the Government can promote the rearing of cattle on amassive scale and be a major exporter as there is enormous potential inthat sector."Local beef is cheaper compared to imported beef.For example, beef from India costs RM15 per kg compared to local beef atRM8 per kg."Liau also said there are enormous business opportunities in downstreamactivities such as packaging, food processing, storage, maintenance ofmachine and transportation."Furthermore, it can complement the palm oil industry because 70 per centof cattle feed is made from palm kernel cake and 30 per cent is rice husk.At the end of the day it can be a very competitive venture," he said.Liau also said the focus can be on cash crops which are less strenuoussuch as coffee, cocoa and ginger, among others.He said the palm oil industry is dependent a lot on foreign labour, whichcan be costly and subjected to acute shortage.Sabah is not qualified for the RM600 million allocation because 70 percent of both the 1.1 million ha of oil palm trees in Sabah and 400,000ha of oil palm trees inSarawak are less than 25 years old.Malaysian Palm Oil Association chief executive M. R. Chandran said theRM600 million allocation will make a lot of difference to the smallholdersand plantation owners."From what I understand the assistance applies across the board toeverybody, including the smallholders and the plantation companies."Big companies with 500ha of land stand to gain RM500,000 in assistancefrom the Government under the replanting scheme of RM1,000 per ha."Chandran said even though replanting will cost between RM3,000 andRM4,000 per ha and big companies have to spend an additional sum toreplant, the assistance will still benefit the companies during these hardtimes.The National Association of Smallholders Malaysia acting president DatukMazlan Jamaluddin, while lauding the announcement, said the associationwill adopt a wait-and-see stance."The announcement by the Prime Minister is still vague and unclear.The industry is not sure whether the fund is additional to the RM500million announced by the Deputy Prime Minister earlier or a separate fundaltogether," said Mazlan.He was also unsure whether the allocation is a separate fund from theRM350 million fund already announced by the Federal Land Development andAuthority."We know the money has been approved, but we have to wait for anannouncement by the relevant ministries," Mazlan added.