12/05/2009 (Bernama), Kuala Lumpur - The government has no plan to remove the windfall tax for oil palm planters, Prime Minister Datuk Seri Mohd Najib Tun Razak said today.

"Well, you know, the cost of production is about RM1,600 per tonne, so there's a quite a lot of margin," he told reporters after the launch of Sime Darby Bhd's breakthrough discovery on oil palm genomes here.

He said the government recently increased the threshold price of crude palm oil to RM2,500 per tonne for Peninsular Malaysia and RM3,000 for Sabah and Sarawak.

Najib, who is also the Finance Minister, was commenting on whether the government will consider abolishing the windfall tax for oil palm planters.

Recently, there were calls by associations and industry players for the government to consider abolishing the windfall tax as it could serve as a form of double taxation on planters as well as a deterrent to local and foreign investments in the stock market.

With the CPO price moving between RM2,820 and RM2,870 per tonne since last week, estate owners in Peninsular Malaysia will have to start paying windfall tax from this month onwards.

On the physical market, the CPO price for May was RM2,870 per tonne.

Touching on the Sime Darby's discovery on oil palm genome, Najib said the Federal Land Development Authority (Felda) is likely to be keen in working with the conglomerate to increase the income of the settlers.

"We will discuss with Sime Darby. For the replanting, we will use the new seedlings. In terms of output, we can double the yield with the existing acreage so that will be an increase in productivity by 100 percent," he said.

"I don't think we need to because if you use the new seeds then you will be able to get a quantum leap in yield and also in terms of oil extraction rate and this will mean more income for the companies as well as for smallholders," Najib said when asked whether there will be incentives for oil palm planters using the new technology.

In addition, the utilisation of labour per hectarage could also be reduced along the planting process, he said.

Sime Darby is the world's first to successfully deciphered the genetics of the oil palm, which pave way for multiple benefits to the oil palm industry.

Earlier in his speech, Najib said a paradigm shift, through biotechnology, is required to increase productivity, efficient processing and the production of high-value products.

"It is therefore critical that the industry consistently adopts innovative techniques and sustainable practices, through the availability of new knowledge and technology to ensure that oil palm cultivation remains in harmony with the environment," he said.