The agriculture sector received a huge allocation of RM5.8bil under Budget 2013 given its high priority status to boost national income and also, for food security.
In addition, RM30mil will be allocated for agricultural development including high-technology applications in fruit and vegetable production, increasing the supply of high-quality seedlings, price stabilisation through direct selling from farms, establishment of fish markets as well as improving agricultural training institutions.
Boon: ‘I believe this replanting allocation is meant for smallholders.’
The Government will also allocate RM75mil to boost the output of food and health products.
For the plantation sub-sector, the Government will allocate RM432mil under the National Key Economic Areas (NKEA) for oil palm replanting, increasing the annual oil palm yield to 26.2 tonnes per ha in 2020 from 21 tonnes currently.
Industry players contacted said the move to encourage oil palm replanting was good especially to address the current high palm oil stocks above two millon tonnes in the country.
This can also help to stabilise palm oil price which is trading at the RM2,500 per tonne range, down by about 18% so far this year, they added.
Malaysian Estate Owners Association president (MEOA) Boon Weng Siew said: “I believe this replanting allocation is meant for smallholders to help them manage the high cost of replanting and not for private plantations.”
Previously, a smallholder received about RM7,000 per ha for replanting purposes, he added.
Sabri says FGVH has been undertaking aggressive replanting.
Therefore, smallholders including Felda settlers would likely be major beneficiaries. Via replanting, smallholders yield is expected to increase hence increasing their income.
The Government has forecast the income of an oil palm smallholder to grow by 47%, from RM4,794 per ha in 2010 to RM7,047 by 2020.
Felda Global Group president Datuk Sabri Ahmad told StarBiz recently that the group has been undertaking aggressive replanting to counter its high old age palm tree profile of above 18 years.
“We are replanting about 15,000ha per year and hopefully with the next three to five years, Felda Global Group palm tree profile will be restored,” he noted.
Similarly, plantation group United Malacca Bhd has also undertaken aggressive replanting over the past few years, said its chief executive officer Dr Leong Tat Thim.
He said the weighted average of the group’s palm tree above 25 years olds was only about 2%.
Leong concurred that the high replanting allocation by the Government under Budget 2013 would encourage smallholders which have been reluctant to undertake replanting due the the high CPO price over the past three to four years.
Leong says the allocation will encourage smallholders.
On the allocation of RM127mil for development of high value oleo derivatives to transform the downstream sector towards higher production of derivatives, Leong said: “This is a good move to encourage oil palm refiners to consider venturing into more high-end finished downstream products.”
On the RM1.5bil allocation to stabilise the cooking oil price in the country, Boon said: “This allocation actually will come from the cess and the windfall profit tax (WPT) collected from local plantation companies.”
For peninsula-based oil palm plantation players, a 15% WPT will be imposed when the CPO price threshold reach RM2,500 per tonne and above.
For Sabah and Sarawak oil palm planters, a 7.5% WPT will be imposed when the CPO price hit RM3,000 per tonne and above.
To ensure food security, four new padi granaries will be developed and expanded in Kota Belud, Batang Lupar, Rompin and Pekan.
Currently, 389,000ha of cultivated padi granaries are able to produce up to 1.8 million tonnes.
With an expenditure of RM140mil, the four new paddy granaries with acreage of 19,000ha and involving 12,237 farmers are expected to produce 104 tonnes.
The Government will continue to provide subsidies and incentives amounting to RM2.4bil to assist farmers.
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