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Workers shortage still plaguing oil palm sector, says Soppoa
Workers shortage still plaguing oil palm sector, says Soppoa
22.08.2022 (www.theborneopost.com) - KUCHING (Aug 22): The oil palm sector continues to face a multitude of challenges that require government’s support from time to time.
In stating this, Sarawak Oil Palm Plantation Owners Association (Soppoa) chief executive officer Dr Felix Moh says the slow arrival of Indonesian workers remains a challenge to oil palm growers who are still facing critical shortage of workers since the Covid-19 lockdown.
“The Indonesian government may have imposed certain restrictions to discourage its citizens to work in Malaysia, but the long processing time of the applications for the approved permit (AP), new labour licence and calling visa have also, to a certain degree, contributed to the delay in employing foreign workers,” he said in a statement issued in connection with a visit conducted by Soppoa members to State Secretary Dato Sri Mohamad Abu Bakar Marzuki at Wisma Bapa Malaysia here recently.
The Soppoa delegation was headed by chairman Eric Kiu.
For the record, Soppoa members represent about 70 per cent of the total planted oil palm areas in Sarawak, and they (members) comprise mostly oil palm growers operating at various scales, including government land development agencies and independent smallholders.
According to Moh, currently Sarawak has 1.61 million hectares of oil palm plantations and 84 palm oil mills. Last year, the state produced 3.90 million tonnes of crude palm oil (CPO).
Meanwhile, Kiu said the palm oil industry had generated significant amount of tax revenues for the country in 2021, including Malaysian Palm Oil Board (MPOB) cess amounting to RM62.5 million, windfall profit levy of RM394 million, state sales tax of RM1 billion, export tax of RM1.5 billion, and corporate tax of between 20 per cent and 28 per cent.
During the courtesy visit, Mohamad Abu Bakar had stated that the approval for new labour licence should ideally be given within a day, instead of seven days, and in this matter, he was confident that the processes would be streamlined soon.
Back to Kiu, he said Soppoa respected the decision by the Sarawak Cabinet for not granting the request to allow Bangladeshis to work in plantations at the moment.
However, he suggested that Timorese workers could be considered instead, in view of the cultural similarity between them and the Indonesians.
Kiu also thanked to Deputy Minister in Sarawak Premier’s Department (Labour, Immigration and Project Monitoring) Datuk Gerawat Gala for working tirelessly in seeking solution to all issues related to foreign workers over the past few months.
Adding further, Moh said palm oil was highly taxed in the country, with the rate between 47 and 52 per cent, with the state growers having to pay state sales tax upon the CPO price reaching RM1,000 per tonne.
It is informed that the rate would be capped at a maximum of five per cent should the CPO price rise above RM1,500 per tonne.
“The existing threshold for levying CPO was set in 1998 when the cost of production was lower.”
Moh said a survey carried out by Soppoa indicated that the cost of production had ranged between RM2,000 and RM2,300 per tonne from 2014 to 2019.
“Recently, due to higher input costs, many companies reported cost of production as being close to RM2,500 per tonne.”
In this regard, Moh said a new threshold at RM2,000 would be more reflective of the present industry landscape.
“Kiu informed that the suggestion to revise the existing threshold was brought to the Sarawak Premier Datuk Patinggi Tan Sri Abang Johari Tun Openg’s attention earlier this year, and thanked him for consideration.”
Moh said the State Secretary had agreed to bring forward the matter to the State Financial Secretary for further studies.
Additionally, Moh also pointed out that nearly 44 per cent of oil palms were planted on peat soil in Sarawak that was marginal and prone to flooding.
“On top of that, it is more expensive to manage compares to mineral-soil estates.
“Peat oil estates are also susceptible to many other problems, such as high incidence of pests and diseases, lower fresh fruit yields and poorer oil extraction rate – just to name a few.”
Moh said the State Secretary had agreed that more research and development would need to be carried out to improve the productivity and sustainability of the oil palm sector in Sarawak, as the crop had always contributed significantly to the state’s economy.
“He (Mohamad Abu Bakar) also stressed that there are many excellent learning and research institutions in the state that can specialise in palm oil’s research and development.”
Moreover, Moh said the State Secretary had agreed to have more industrial engagements in the future.
“He (Mohamad Abu Bakar) is also receptive to the idea proposed by Soppoa of setting up a Sarawak-based palm oil agency to focus on the development of the industry here.”