N O ! I g T r n I o i f rtis ED y t i e T n v S u d t R r A FI ppo 024 2 APR
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VOL.1 NO.1 APR - JUN 2024
MEET US EDITOR-IN-CHIEF Kelly Yew EDITOR ASSISTANT Nanda Christy PRODUCTION EDITOR Mohammad Jaaffar MARKETING DIRECTOR Emily Yu ADVERTISING Kelly Yew +60-12 937 7986 kelly@maps-globe.com KELLY YEW Editor-In-Cheif Palm Plantation Tribune Degree in Bioscience with Chemistry TARUMT Research Project Treating BSR Disease in Palm Oil Intern Project Study of Bioformulations and Biostimulants, Genting Plantation Berhad
HOW CAN WE HELP If you have an insightful story or press release pertaining to the palm oil industry, we invite you to email our news editor at kelly@maps-globe.com. To send a personal message to the editor, simply include the keyword 'kelly' in the subject line. Additionally, for inquiries regarding potential media partnerships, please use the same email address with 'partnership' in the subject line. Let’s contribute to the progress of the palm oil sector and stay connected!
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PALM PLANTATION TRIBUNE
VOL. 1 NO. 1 APR - JUN 24 1 LATEST NEWS WORLDWIDE Specialised for palm plantation-related sector
2-3 PALM PLANTATION WORLDWIDE Palm Plantation in India
4-5 GUIDE ESG in the Malaysian Palm Plantation Companies
6-7 BREAKTHROUGH TECH Blockchain for Palm Oil Supply Chain Management
10-11 DISCUSSION Transforming smallholders will-being through effective farm management-MPOB
13 LATEST APPROACH RSPO to launch new palm oil tracing system in 2024
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PALM PLANTATION TRIBUNE
VOL. 1 NO. 1 APR - JUN 24
14-15 INITIATIVES FROM MALAYSIA Malaysian oil palm on the rise: 2024 budget’s key takeaways
16 INITIATIVES FORM INDONESIA Smallholders oil palm replanting program to boost productivity: BPDPKS
17 MINISTRY UPDATE A new minister of Plantation & Commodities Malaysia
18-19 PROGRAM NISCOPS Program-National Initiatives for Sustainable & Climate Smart Oil Palm Smallholders-IDH
20 MALAYSIAN PALM PLANTATION RELATED MINISTRY, AGENCY & ASSOCIATION Ministry, Agency & Association
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PALM PLANTATION TRIBUNE
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LATEST NEWS WORLDWIDE
SPECIALISED FOR PALM PLANTATION-RELATED SECTOR
Musim Mas Releases New Oil Palm Seeds, Tripling Industry Yields -Michael Hemsworth Musim Mas introduces high-yield palm oil seeds under the DxP variety with 3 times higher yields and a shorter maturation period of 25 months, compared to the industry standard. The corporation aims to boost production, emphasizing improved yields over land expansion.
Malaysia Launches System to Ease Transactional Data Management -Reuters Malaysia introduced Sawit Intelligent Management System to streamline transactional data management across palm oil supply chain. Prime Minister Anwar Ibrahim highlighted SIMS's goal of promoting self-regulation, reducing government oversight, and offering decisionmaking insights.
Indonesia’s Forest Restoration Plan: Converting 200,000 Hectares of Oil Palm Plantations by 2023 -Paige Bennett Indonesia plans to convert 200,000 hectares of oil palm plantations into forests by November 2, 2023, following rules set in 2020 for designated forest lands. Criticized for potential loopholes, it aims to address environmental concerns linked to oil palm cultivation, such as habitat destruction and greenhouse gas emissions.
NI-SCOPS Workshop Spurs Climate-Smart Agriculture for Sustainable Palm Oil in Nigeria -Bukola Adewumi NI-SCOPS, in collaboration with Solidaridad, IDH, and other stakeholders, organized a workshop in Abuja to boost climate-smart agriculture for sustainable palm oil production in Nigeria. Key topics included access to finance, regenerative practices, quality improvement, private sector engagement, and partnerships.
Tripura Aims to Cultivate Palm Oil on 7,000 Hectares by 2026-2027 -PTI Tripura (India) government plans to expand palm oil cultivation to 7,000ha by 2026-27, up from the current 56.35ha. Identified through digital mapping in 2020, 146,364ha are suitable for cultivation.
Jaya Tiasa Deploys Drone to Improve Plantation Management -Jack Wong Jaya Tiasa Holdings Bhd is piloting drone use to enhance oil palm plantation management, reducing reliance on manual systems. Equipped with high-resolution cameras, the drones aim to collect precise ground information for improved efficiency.
1| PALM PLANTATION TRIBUNE
OPPORTUNITIES & STRATEGIES TO IMPROVE THE PROFITABILITY OF THE OIL PALM BUSINESS LEADERSHIP AND MANAGEMENT ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG)
PRODUCTIVITY AND COMPETITIVENESS MILLING AND PROCESSING
PULLMAN MIRI WATERFRONT, MIRI, SARAWAK 15 - 17 JULY 2024
www.isp.org.my
+603-7955 5561
conference@isp.org.my
PALM PLANTATION WORLDWIDE PALM PLANTATION IN INDIA
The Prime Minister of India, Mr Narendra Modi had announced the latest scheme to support the growth of palm oil in India during India's Independence Day in August 2021. The Government had approved a ₹11,040 crore (US$1.4 billion) budget over five years (2022-2026) for a scheme called the National Mission on Edible Oils – Oil Palm (NMEO-OP), based on the rationale that India needs to reduce its dependence on imported edible oils. It aims to boost domestic oilseeds production and expand oil palm cultivation. Historically the cultivation of oil palm in India is not new. The Ministry of Agriculture launched the Oil Palm Development Programme in 1991-1992. It has continued in one form or the other since then. The National Mission on Oilseeds and Oil Palm was started in 2012, as part of the 12th Five Year Plan (2012-2017), and it identified 2 million hectares of cropland. In April 2017, the Ministry of Agriculture raised the rates of support for planting, maintenance, inter-cropping and borewells of oil palm cultivation. Many of the states were from the northeast of the country. Even the Andaman and Nicobar Islands saw oil palm cultivation started by the
Worker in Palm Plantation India
Kerala state government in the 1970s. Palm oil is found in everything. For Indians, its primary use has been as a cooking oil. India is the world’s largest importer of palm oil. Over 90% of the palm oil imported is used for cooking, and the total import quantity has grown almost 10 times in the last 20 years. To deal with the huge import bill, the government has embarked on the oil palm cultivation scheme for self-sufficiency.
Minimal Growth Progress in Palm Planting The projected growth remains lagging as the area largely unchanged. According to Oil World, that area was 210,000ha in 1998, increased to 240,00ha in 2022. India ranks 17th in terms of world production (280,000 tons/year). Andhra Pradesh produces nearly 90% of India’s palm oil. Here, farmers who had started growing crop are shifting back to coconut. The primary reason is because oil palm tree requires lots of water. Both Indonesia and Malaysia have an average annual precipitation of over 2,500 mm, while India’s only 1,000 mm. The water demand cannot be met by rain alone and needs irrigation systems. This, in turn, means greater strain on water sources. Government expects the expansion happen in existing farmland, replacing other crops. More than half of Indian farmers are dependent on rain-fed agriculture, which is unsuitable. In fact, the leading players in palm oil production in India are corporate players such as Patanjali-owned Ruchi Soya, 3F Oil Palm Agrotech & Godrej Agrovet.
The National Mission on Edible Oils – Oil Palm (NMEO-OP) India is the world’s second-largest consumer of palm oil after Indonesia, with one crucial difference: Indonesia produces most of the palm oil it consumes, while India produces nearly none. It spent US$8.72 billion on palm oil imports in 2021. The Indian government set out to reverse this trend by encouraging farmers to grow oil palm. It announced a nationwide campaign, NMEO-OP promised subsidies for fertilizers and support, including setting up irrigation systems and processing mills. The mission aims to increase this to 1.12 million tonnes across 1 million hectares by 2026, and to 2.8 million tonnes across 6.6 million hectares by 2030. But progress has been slow. It was revealed that 14 of the 22 states slated for increased oil palm cultivation do not have mills to process fruits into palm oil, and that area-wise palm oil expansion targets were not met in 2022 or 2023. 2| PALM PLANTATION TRIBUNE
PALM PLANTATION WORLDWIDE
Worker in Palm Plantation India
The Challenges There are three main challenges in increasing cultivation of oil palm in India; lack of infrastructures, the weather and social-environmental concerns. Oil palm fruits are perishable, need to be crushed within 1-2 days of harvesting. However, many states don’t have mills. Government stated that new mills are being established in Arunachal Pradesh and Assam, while 12 other states remain without prospective developments. The presence of processing mills close to plantations is essential for a functioning supply chain. States that close by milling capacities and transportation facilities, such as Odisha can still get the fruit processed in time, but some states like in the north-east are lacking. A processing mill requires heavy capital investment. Palm oil mill owners must ensure that at least 5,000ha are under oil palm cultivation. Even with all the right conditions in place, it can take 8 to 10 years to become profitable. This has led to a catch-22 situation where farmers are wary of growing the crop unless there are mills in their vicinity, and businessmen are wary of setting up mills until they are assured there will be enough fruit. In many cases, this is where state governments must intervene. Experts have also raised concerns over climatic conditions.
In the north-east, annual rainfall is lower than 2,000 2,500mm, the crop would ideally get and is not distributed throughout the year. Climate change adds to the uncertainty. Research shows that the total rainfall in the region has decreased in the past 50 years, while the frequency of extreme rains has increased. Oil palm requires sufficient water & sunshine. Rainfall across India is seasonal, making the rain-fed cultivation unsuitable. The crop also grows best within a narrow tropical band 10 degrees north and south of the equator, where the climate is stable and humid all year round. However, the northeast region of India is located around 26° to 27° north of the equator, in the subtropical zone. Overall, around 40,000ha in the north-east are under oil palm cultivation. The national palm oil mission aims to expand this to 328,000ha by 2026. To achieve such growth, a dependence on rainfall alone would not be sufficient.
Palm Plantation in India
Finally, some environmental non-governmental organizations (ENGO) had raised concerns on areas being earmarked for the cultivation of oil palm. Some issues were; legal status, ownership, and whether the lands were under forest cover. Other ENGO stresses that spatially explicit planning exercises are needed to ensure that areas with high conservation value are not harmed. Also a careful look at land tenures so that socio-economic inequalities are not exacerbated, and livelihoods are not threatened. In the north-east, many areas are communityowned, as opposed to under state or private ownership. If these lands are taken over by companies, communities will be forced to become laborers on their own land. These issues only add to the obstacles facing India’s palm oil drive. It has raised serious concerns about its ability to ramp up domestic production to reduce reliance on imports. The plan to scale up oil palm is fantastic if the country wants to spare land and meet oil requirements. But India needs to do this in a manner that does not destroy biodiversity, land tenure systems and cultures of different societies. -China Dialogue 3| PALM PLANTATION TRIBUNE
GUIDE
ESG IN THE MALAYSIAN PALM PLANTATION COMPANIES
Image credits to: TheEdgeMarket
The Malaysian palm oil industry has been addressing sustainability concerns, particularly Environmental, Social, and Governance (ESG) criteria, since the 2000s. Initiatives such as the Zero Burning policy and voluntary sustainability schemes, like the Roundtable on Sustainable Palm Oil (RSPO), were introduced. Sustainability commitments increased with the mandatory Malaysian Sustainable Palm Oil (MSPO) certification by the end of 2019. The palm oil industry is associated with several ESG risks that could affect their ESG ratings. The most prominent being deforestation and climate change, with major players implementing No Deforestation, No Peat, and No Exploitation (NDPE) policies. Meanwhile, regulatory and trade barriers, like the EU Renewable Energy Directive (RED) and Deforestation Regulation (EUDR) also pose challenges. In terms of social risks, this involves labor exploitation, leading to US import restrictions for some companies, as well as concerns about child labor, gender inequality, and indigenous land
right. Companies exporting to the EU and US generally have better ESG policies, while others lack commitment due to factors like insufficient data and resource constraints. Despite these challenges, Malaysia is positioned to lead ESG efforts in the country. The ESG framework, originating from the 1960s' CSR concept, has evolved into a market-driven model, crucial for securing capital as investors increasingly consider ESG in their decisions. ESG ratings assess companies' long-term resilience in ESG matters based on industry-specific evaluations of risks and opportunities.
Sustainability Reporting versus ESG Reporting ESG and sustainability reporting serve distinct purposes. ESG focuses on how external factors impact a company or investment, while sustainability assesses how the company or investment affects the world. ESG reporting, crucial for investors, discloses detailed environmental, social, and governance data based on established standards, shaping the organization's risk profile. In contrast, sustainability reporting has a broader outreach, targeting employees, consumers, and various stakeholders to communicate the organization's corporate, social, and environmental responsibilities, enhancing its reputation and brand. Both may use similar standards, such as those provided by the Global Reporting Initiative (GRI), but they differ in purpose and target audience. ESG reporting and ratings serve as vital indicators, helping organizations distinguish themselves competitively. Examples include the GRI's comprehensive framework, MSCI's focus on governance, ethics, tax, corruption, product certification, and the Carbon Disclosure Project (CDP) with specific indicators centered on climate change, forests, and water security. 4| PALM PLANTATION TRIBUNE
GUIDE Strengthening a Deforestation-Free Supply Chain The Malaysian palm oil industry stands out for its regulated and audited zero deforestation commitments, evident in sustainability certification schemes like MSPO and RSPO. The 'No Deforestation' criterion ensures that palm oil from Malaysia is sustainably produced, free from illegal deforestation. The Malaysian government's decision to cap the total oil palm planted area at 6.5 million hectares, presently at 5.74 million hectares, supports this commitment. Traceability tools, including MSPO Trace and RSPO Palm Trace, verify the sustainability of Malaysian palm oil. Independent resources like the World Resources Institute's Global Forest Watch and Malaysia's Hutan Watch provide checks and balances, enabling stakeholders to validate deforestationfree claims. The industry's adoption of IR 4.0 technologies, such as blockchain, further enhances traceability tool integrity and robustness.
Incorporating Better Disclosure and Reporting Measures to Enhance Accountability and Transparency ESG reporting is mandatory for key publicly listed companies in Malaysia, but its current form is criticized for lacking impact. For instance, in GHG emissions reporting, companies may report emissions without specifying reduction targets, which is considered more significant. After Bursa Malaysia's enhanced sustainability requirements were announced in September 2022, companies now need to provide additional reporting and climate-related disclosures. Plantation companies, experienced in meeting MSPO or RSPO certification audit requirements, have an advantage. Audited areas include management commitment, compliance with governance requirements, and anti-corruption measures. Non-compliances are publicly accessible, ensuring transparency for the governance of Malaysian palm plantation companies.
Conclusion
Image credits to: FigBytes
The ESG momentum is not showing any signs of slowing down, while the market continuously indicates that businesses will do well from ESG investments. Eventually, organizations will need to think about ESG as part of their overall strategy. With these developments and opportunities in place, Malaysian palm plantation companies are in a better position to improve their ESG ratings. Commendable ESG ratings will also attract better investor attention and enable wider access to financial institutions, and this will translate to a more progressive and inclusive Malaysian palm oil industry. -The Edge Malaysia 5| PALM PLANTATION TRIBUNE
BREAKTHROUGH TECH
BLOCKCHAIN FOR PALM OIL SUPPLY CHAIN MANAGEMENT
‘’Blockchain enhances supply chain transparency, traceability, and authentication.’’ Despite a brief decline in interest in 2020, global spending on blockchain solutions continues, with Gartner projecting it to track $2 trillion worth of goods by 2030. Challenges like scalability and regulatory compliance exist, but Gartner sees substantial benefits in the next five years, making it an indispensable technology.
What is Blockchain? Blockchain, initially the backbone
A Ledger, of Bitcoin, is reshaping economic and social infrastructures. It introduced a decentralized, but intermediary-free ledger in 2008, enhancing trust and reducing costs Digitally in complex transactions. This technology by Satoshi Nakamoto Open and transforms the basic ledger into a secure and transparent mechanism for recording data Shared! across decentralized networks.
What Makes It Unique? Blockchain is a decentralized and immutable record system distributed across a network, eliminating the need for central authorities. Each block in the series contains timestamped data secured by cryptography, with a unique hash serving as a digital fingerprint. Blocks are interlinked to form a chain, preventing undetected alterations. Unlike traditional databases, a blockchain's structure ensures fixed content widely held, similar to a published book. The network includes nodes holding complete transaction records, and smart contracts, coded terms enabling automatic enforcement within the blockchain.
Blockchain Technology Illustration
Decentralized Distributed Secure Trusted Automated
Blockchain Regulatory Sandbox Launched by European Commission The European Parliament encourages the palm oil industry to explore blockchain for sustainability. The European Commission's strategy includes a pan-European blockchain, legal certainty promotion, and increased research funding. It supports sustainable development and skills development initiatives, fostering collaboration through the Blockchain Observatory and Forum. The Commission's Regulatory Sandbox provides legal clarity, ensuring best practices for the EU blockchain community. 6| PALM PLANTATION TRIBUNE
BREAKTHROUGH TECH The Promise of Blockchain in the Palm Oil Supply Chain Current Environment
“The Malaysian palm oil industry faces sustainability challenges due to outdated tracking systems, manual processes, and a lack of transparency.” Blockchain technology has the potential to transform the sector by providing unprecedented traceability and transparency, improving working conditions, and offering detailed data on crop management. Blockchain can also reduce spoilage through real-time monitoring of temperature and humidity during processing and transport. It enhances traceability, increases efficiency through smart contracts, reduces costs by eliminating intermediaries, and improves transparency. The technology's security features prevent counterfeiting, ensure regulatory compliance, enable realtime reporting, and foster collaboration across the supply chain. These advancements could significantly enhance the integrity and value of the palm oil supply chain, with the industry's clearly defined standards making it a suitable use case for blockchain application.
Blockchain for Traceability in Palm Oil Supply Chain A comprehensive solution was developed, incorporating a blockchain platform, website, and mobile app for the Malaysian palm oil industry. Plantations can register on the blockchain platform, providing necessary documentation for verification. Each plantation and its workers are registered as individual nodes, with data partitioning to selectively share information. The blockchain records the location of Fresh Fruit Bunch harvests, their movement to collection points, and transportation to mills. Certification authorities access a broader dataset for audit trails, while others may have limited access. Real-time tracking enables stakeholders, including plantation owners, to monitor the movement of fruit bunches and potentially incorporate sensors for temperature, humidity, and ground conditions. The system aims to enhance transparency, streamline processes, and achieve cost efficiencies across the palm oil value chain, impacting areas such as harvesting, plantation management, sourcing, transportation, and audit or certification processes.
Conclusion Blockchain technology brings unique advantages to supply chain management, especially in complex industries like agriculture and palm oil production because it is decentralized, distributed, secure, trusted, and automated. -Lardi & Partner Consulting GmbH 7| PALM PLANTATION TRIBUNE
DISCUSSION
TRANSFORMING SMALLHOLDERS WELL-BEING THROUGH EFFECTIVE FARM MANAGEMENT-MPOB
Independent Smallholders in Malaysia Number of ISH
Revenue
Average Area (Ha/ISH)
Area (Ha)
Peninsular Malaysia 2.66
Malaysia 3.84
Sarawak 21%
Malaysia RM4,618
Peninsular Malaysia RM3,375
Sarawak 31%
Peninsular Malaysia 44%
As of June 2023
Sabah 15% Sabah 6.48
Peninsular Malaysia 64%
Sarawak 5.55
Sabah RM7,004 Sarawak RM6,057
Sabah 25%
Note: Revenue are based on estates’ FFB yield, FFB price & OER for Sept 2023 and average ISH oil palm area (ha). Smallholder’s revenue are expected to be lower due to low productivity
Issues with Independent Smallholders Small-scale production entity. Manage the holding themselves or employ workers with limited to no access to millers. Usually entirely dependent on fruit dealer besides have little to no support in terms of seeds, fertilizers and manpower.
Associated with lack of knowledge on maintaining their farms. Perceived as inefficient and unproductive as compared to the large-scale production system of the plantation. Poor farm management. Suffer low yields.
Source of Labour Note: Based on survey on 1016 ISH from 162 SPOCs
Harvesting & Pruning Contractor Local Worker Foreign Worker Oneself & Family Worker 10| PALM PLANTATION TRIBUNE
Fertiliser Application
Weed Control
DISCUSSION Issues Faced by Independent Smallholders Note: Based on survey on 1016 ISH from 162 SPOCs
Difficulty in Finding Workers
Adoption of Mechanization Motorized Cutter Cantas & ZipZap Grabber Three-Wheeler Cart (Sekaleng & Badang) Mini Tractor Fertilizer Spreader
Harvesting Fruit Collection Pruning Fertiliser Weed Control
Area of Improvement Note: Based on survey on 1016 ISH from 162 SPOCs 8.1%
To improve the quality of services through work monitoring & quality assurance To offer services at more reasonable prices
3.4%
To produce more skill workers through intensive training
3.3%
To adopt mechanization in farm management
3.1%
To follow work scheduled as agreed by both parties
0.7%
To produce more oil palm management entrepreneurs
0.2% 0%
2%
4%
6%
8%
10%
Informal Entrepreneurs ISH oil palm management are dominated by local workers which can be defined as low skilled informal entrepreneurs. Not identified as legal entities that are eligible for assistance and support by government and social safety nets. Attention should be given on promoting entrepreneurship in oil palm management and providing support.
Conclusion With the age profile of the smallholders and the uneconomic size of the oil palm farm, it would be more effective if the farm management is left to the professional contractors for proper management and to benefit from the economics of scale. By providing assistance and support, such as entrepreneurship and financial management courses and business guidance throughout the initial stages of the business, more professionals oil palm management entrepreneurs can be produced to serve their local ISH community. The use of mechanization is seen to improve work efficiency. Gig economy which has always been part of the ISH farm management can be made better structured with adoption of digital technology. 11| PALM PLANTATION TRIBUNE
LATEST APPROACH
RSPO TO LAUNCH NEW PALM OIL TRACING SYSTEM IN 2024
The Roundtable on Sustainable Palm Oil (RSPO) said it is developing a new system to trace the origin and environmental credentials of the commodity in response to demands by global buyers for proof of sustainability beyond certification. RSPO appointed in October a consortium of agri-tech firms consisting of Agridence, CIED and Australia's NGIS to develop the new system which would provide more information on the vegetable oil supply chain, officials said. RSPO aims to launch the system in the fourth quarter of 2024.
"We need to rethink our existing standard and certification system and develop approaches that help the industry to prove sustainability in the way the markets, regulators and customers demand today."
Image credits to: RSPO
The European Union in December agreed on an anti-deforestation regulation that requires companies to produce a statement showing when and where their commodities, including palm oil, were produced and provide "verifiable" information that they were not grown on land deforested after 2020. Failing to do so could result in hefty fines.
RSPO chief executive Joseph D’Cruz told an industry conference. RSPO director Francisco Naranjo told reporters the new platform "could be a very powerful tool to help our members to show compliance with EUDR regulations".
The regulation, due to come into force in late 2024, has been welcomed by environmentalists as an important step in protecting forests, but producing countries have raised concerns that the law would exclude smallholders from the global supply chain.
In 2022, certified sustainable palm oil production reached 15.4 million metric tons, while consumption stood at 9.2 million tons, RSPO data showed. -Reuters 13| PALM PLANTATION TRIBUNE
INITIATIVES FROM MALAYSIA
MALAYSIAN OIL PALM ON THE RISE: 2024 BUDGET'S KEY TAKEAWAYS The recently-announced 2024 Budget has brought optimism to the oil palm sector, especially for smallholders. The government has introduced a range of incentives aimed at ensuring increased productivity within the oil palm industry. In the 2024 Budget, the government has proposed to expand the scope of automation tax incentives to cover the plantation commodities sector to increase the productivity and reduce the dependence on foreign labour through mechanisation and automation.
This initiative is poised to
Bolster productivity while concurrently decreasing reliance on foreign labour, as technological implementation will lead to higher fresh fruit bunches (FFB) production. Moreover, apart from elevating productivity, it will potentially attract local community participation within the oil palm industry.
Increasing the productivity of palm oil production and reduce foreign labour through mechanisation and automation.
The oil palm sector relies heavily on labour. During the Covid-19 pandemic outbreak, the sector experienced a rather critical shortage of workers when the government implemented a freeze on the hiring of foreign workers from March 2020 to July 2022. This had resulted in a shortage of 55,000 workers in the oil palm plantation sector in December 2022. While the government's decision to lift the freeze on foreign labour has alleviated the labour shortage to some extent, the oil palm plantation sector continues to grapple with this issue. In August 2023, the total shortage of workers as reported by the plantations was 41,733 workers, a decrease of 24 per cent from that in December 2022 as the withdrawal of the freeze by the government allows plantation companies to bring in foreign workers. 14| PALM PLANTATION TRIBUNE
The government has encouraged the oil palm plantation sector to increase the level of mechanization but the percentage of mechanization adoption in the sector is still low especially for the harvesting activities and hence, affects the yields of the FFBs produced. MPOB statistics showed that the national average yield of FFB in 2022 slipped by 7.0 per cent to 15.49 tonnes per hectare from 16.73 tonnes per hectare in 2020. The implementation of mechanization and automation in oil palm plantations is expected to mitigate the impact of the labour shortage while simultaneously changing the perception of the oil palm industry among local youth.
INITIATIVES FROM MALAYSIA Historically viewed as a sector associated with challenging working conditions, the introduction of mechanisation and automation will not only enhance productivity but also make job opportunities in the industry more appealing to the local workforce. Self-driving vehicles can carry out the activities of unloading the FFBs, spraying pesticides and spreading fertilisers which can be controlled by the local youths through teleoperation that does not burden the operators. This technology can be adopted in the oil palm plantations as it has been successfully used in other countries or in other agricultural sectors. The private sector should cooperate with the government in inventing viable technology to improve plantation operations. The oil palm sector also faces a challenge in hiring the local workers who are skilled in automation technology. Therefore, incentives that can encourage highly skilled local workers to be involved in the sector should be considered.
Others Meanwhile, the government's move to provide the RM100 million palm replanting programme incentive allocation through grant and loan to 7,000 independent oil palm smallholders will enable them to replant unproductive and low yield oil palm trees. Old palm trees that are more than 25 years are expected to cover an area of more than 560,000 hectares by 2027 and this will adversely impact the productivity of FFBs with losses of up to RM7 billion a year. Due to the current high investment cost, smallholders are delaying their oil palm replanting schedules which lead to declining yields. This will affect their income and in turn the government's revenue.
Replanting in Palm Plantation
We applauded the government's initiatives for the oil palm sector proposed in the budget which will enhance productivity, reduce labour dependency, promote technology adoption and improve the wellbeing of the smallholders. These actions are geared towards fostering long-term sustainability and broadening the industry's appeal to a wider workforce. -Director general of Malaysian Palm Oil Board, New Straits Times 15| PALM PLANTATION TRIBUNE
INITIATIVES FROM INDONESIA
SMALLHOLDER OIL PALM REPLANTING PROGRAM TO BOOST PRODUCTIVITY: BPDPKS The Palm Oil Plantation Fund Management Agency (BPDPKS) has said that the Smallholder Oil Palm Replanting Program (PSR) is an important initiative aimed at increasing the productivity of smallholder plantations. "The main objective of this program is to increase the income and welfare of smallholders while utilizing around 2 million hectares of potential plantation land," BPDPKS executive director Eddy Abdurrachman said at the 19th Indonesia Palm Oil Conference and 2024 Price Outlook.
Replanting in Palm Plantation
The PSR program has made significant progress in recent years, with at least Rp8.5 trillion (US$536 million) in funds distributed for more than 306 thousand hectares of land, benefiting more than 134 thousand smallholders, he informed. Through the program, more than 200 thousand hectares of palm plantation land has been replanted, and over 100 thousand hectares is in the process of being cleared.
A smallholder will get Rp30 million (around US$1,850) per hectare under the replanting program, Abdurrachman said. "This program not only addresses the financial gap, but also facilitates farmers' access to markets," he said. He further said that cooperation with various stakeholders, such as ministries, local governments, cooperatives, and private companies is essential in implementing the PSR program.
"The sustainability of this program is an urgent matter. Program participants are encouraged to obtain Indonesian Sustainable Palm Oil (ISPO) certification at the time of the first harvest," he added. According to him, the obligation to implement ISPO reflects environmental awareness and ethical considerations in palm oil production. He said that the PSR program has gone through several different phases and has been adjusted to market demands and regulatory changes. "Although this program has brought economic benefits, there are still challenges. One of the main problems is the financial gap between the distribution of replanting funds and the production phase, which discourages smallholders from participating," he added. -Antara 16| PALM PLANTATION TRIBUNE
MINISTRY UPDATE
A NEW MINISTER OF PLANTATION & COMMODITIES MALAYSIA Datuk Seri Johari Abdul Ghani has been appointed as Plantation and Commodities Minister following a Cabinet reshuffle on 12 December 2023. He is expected to improve the Malaysian plantation industry’s governance and practices, especially towards the sustainability of the palm oil industry.
According to the Malaysian Palm Oil Board (MPOB), among the challenges he may face are issues such as the European Union Deforestation Regulation (EUDR), labour shortages, rising costs, low smallholder yields, and slow replanting. Smallholder issues need to be addressed because they operate individually with limited capacity and need government support. Datuk Seri Johari Abdul Ghani
The Director General of MPOB said that the oil palm industry is facing a labour shortage and insufficient local workers. It is hoped that the minister can help in the efforts to use technology such as the Mechanisation and Automation Research Consortium of Oil Palm (MARCOP) which focuses on the latest technology within the Fourth Industrial Revolution (IR 4.0) framework. The Malaysian Palm Oil Council (MPOC) stated that among the challenges is a need for initiatives aimed at reversing the declining national productivity yield trend. This is vital to ensure the long-term economic viability of the industry. At the same time, to continue efforts to keep trade channels open and convey an important message to the world that when it comes to quality and sustainability, Malaysian palm oil is at the top of the class and sets the gold standard. In an impromptu press conference, Datuk Seri Johari highlighted the crucial role of palm oil as part of the commodities sector, in contributing to Malaysia’s revenue. He said those components play a significant part in shaping the nation's economic landscape. Despite not being a revenue-generating ministry, the ministry plays a role as a facilitator to streamline processes within the commodities sector. Looking ahead, Datuk Seri Johari wants to foster stronger ties with industry players. The plan includes holding regular meetings with all stakeholders to gain a deeper understanding of their concerns and challenges. -The Star 17| PALM PLANTATION TRIBUNE
PROGRAM
NISCOPS PROGRAM-NATIONAL INITIATIVES FOR SUSTAINABLE & CLIMATE SMART OIL PALM SMALLHOLDERS-IDH
About Millions of smallholders and workers earn their livelihoods in the palm oil sector, a sector that significantly contributes to food security, employment, gross domestic product (GDP) and trade balance of many producing countries. The global expansion of this sector is associated with significant sustainability challenges. Palm oil’s impact on changes to land use and greenhouse gas emissions is giving rise to tensions between exporting and importing countries. Further polarization of this debate or a radical boycott of palm oil does not solve the problem.
The Sustainable Trade Initiative (IDH) and Solidaridad believe there is a solution. Together, they have designed a new way to enable palm oil producing countries to notably contribute the Sustainable Development Goals (SDGs) and the Paris Agreement. With support from the Government of the Netherlands, three National Initiatives for Sustainable Climate Smart Oil Palm Smallholders (NI-SCOPS) have been set-up in cooperation with the governments of Indonesia, Malaysia and Nigeria.
Goal To demonstrate that the palm oil sector can contribute to the SDGs and climate ambitions of the Paris Agreement, whilst also improving the livelihoods of smallholder farmers and workers. Palm oil producing landscapes will become more economically robust and socially just, while protecting and restoring valuable natural resources leading to reduction of greenhouse gas (GHG) emissions from agriculture and land use change. NI-SCOPS will strengthen existing partnerships and build new partnerships with national and subnational governments, reporting transparently on progress in each producing country. 18| PALM PLANTATION TRIBUNE
Image credits to: IDH
PROGRAM
Implementation Implementation is coordinated by IDH and Solidaridad in strong cooperation with farmers and the private sector. In 2019, technical advisory committees were set-up in each country through which IDH and Solidaridad are engaged with government representatives and knowledge institutes. Key Performance Indicators (KPIs) corresponding to the three dimensions of Climate-Smart Agriculture (livelihoods, climate change adaptation and mitigation) have been agreed upon. Methodologies for data collection and analysis are being developed in partnership with national palm oil knowledge institutes. By working with a limited number of metrics, continuous improvement can be measured, compared and aggregated at the national level. The results of the program will be shared with all NISCOPS partners. NI-SCOPS focuses on landscapes with large numbers of independent smallholders and mills, which have proven to be difficult to certify, and where currently most sustainability problems persist. NI-SCOPS also targets markets for palm oil and is actively engaged with the palm oil market in India. As the largest net importer of palm oil, India consumes 13.5% of the global production – making it one of the largest markets for the commodity. Palm oil lies at the core of India’s edible oil market owing to its low prices and the country’s need for food security. IDH works on three key verticals of convening, confidential disclosure and linking buyers to VSA in the India program. We do this through year-on-year monitoring of imported palm oil and bringing together market, civil society and policy stakeholders together to build up responsible sourcing in India.
Image credits to: IDH
Partnership Support NISCOPS IDH and Solidaridad are actively seeking new partnerships with states, companies and other value chain actors with an interest in developing sustainable palm oil supply chains. NI-SCOPS provides a way out of the increasingly polarized debate on palm oil, both for producer and consumers countries. By sharing responsibilities of reaching the goals with the governments, NI-SCOPS opens door for government to government dialogue on sustainable commodity trade and climate change, while effectively addressing environmental and socio-economic issues. If you represent a body concerned with palm oil, or a company that benefits from its use, we encourage you to get involved. By getting involved, you benefit in at least three ways: (1) Reach Global Impact; (2) Achieve Climate Smart and Sustainable Trade Policy Commitments; and (3) Develop Political Momentum. 19| PALM PLANTATION TRIBUNE
MALAYSIAN PALM PLANTATION RELATED MINISTRY, AGENCY & ASSOCIATION Ministry & Agencies Ministry of Plantation Industries Commodities (KPK) Jalan P2p, Presint 2, 62000 Putrajaya, Wilayah Persekutuan Putrajaya. Phone : +6 03 8000 8000 Fax : +6 03 8880 3482 Email : portalmaster@kpk.gov.my www.kpk.gov.my
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Malaysian Palm Oil Board (MPOB) 6, Persiaran Institusi, Bandar Baru Bangi, 43000 Kajang Selangor. Phone : +6 03 8769 4400 Email : general@mpob.gov.my www.mpob.gov.my Malaysian Palm Oil Council (MPOC) Level 25, PJX HM Shah Tower, No. 16A Jalan Persiaran Barat PJS 52, 46200 Petaling Jaya, Selangor Darul Ehsan, Malaysia. Phone : +6 03 7806 4097 Fax : +6 03 7806 2272 Email : wbmaster@mpoc.org.my www.mpoc.org.my Malaysian Palm Oil Certification Council (MPOCC) Level 2, Tower 2B, UOA Business Park, Unit 2-1, No 1, Jalan Pengaturcara U1/51, Seksyen U1, 40150 Shah Alam, Selangor. Phone : +6 03 2181 0192 Email : info@mpocc.org.my www.mpocc.org.my Malaysian Palm Oil Green Conservation Foundation (MPOGCF) Level 12-3-3A PJX HM Shah Tower,16A, Persiaran Barat, Pjs 52, 46200 Petaling Jaya, Selangor. Phone : +6 03 7931 5544 / 5445 www.mpogcf.org
Associations Malaysian Palm Oil Association (MPOA) Tower 3, Level 8, Unit 03-08-09&10, UOA Business Park, No, 1, Jalan Pengaturcara U1/51, 40150 Shah Alam, Selangor. Phone: +6 03 5021 0730 Email: admin@mpoa.org.my www.mpoa.org.my
Sarawak Oil Palm Plantation Owners Association (SOPPOA) No 30, 2nd Floor, Travillion Commercial Centre, 93100 Kuching, Sarawak, Malaysia. Phone : +6 082 236 872 Fax : +6 082 236 873 Email : soppoa@gmail.com www.soppoa.org.my The East Malaysia Planters’ Association (EMPA) Lot 38-1 F, Jalan Dataran BU 4, Bandar Utama, Mile 6, Labuk Road P P M 62 Elopura, 90000 Sandakan Sabah, Malaysia. Phone : +6 089 238 316 Fax : +6 089 238 316 Email : theempa1889@yahoo.com www.tinyurl.com/theempa1889 Sarawak Dayak Oil Palm Planters Association (DOPPA) 2nd Floor Lot 35 & 36, Medan Jaya Commercial Centre, P O Box 742, 97008 Bintulu, Sarawak. Phone : 012-8775415 Email : ritasarimah@gmail.com www.doppa.org National Organization of Smallholders (NASH) D-1-11, Seawangsa Business Suites Jalan Seawangsa 11, Taman Seawangsa, 54200 Kuala Lumpur, Malaysia. Phone : +6 03 4251 0984 / +6 03 4251 0992 Email : pkpkm2014@gmail.com www.pkpkm.org.my Malaysia Oil Palm Nurseries Association (MOPNA) No. 6, Jalan SS2/39, 47300 Petaling Jaya, Selangor Darul Ehsan. Tel : +6 03 78777366 / 78777466 Fax : +6 03 78777166 Email : mopna_mpob@yahoo.com www.mopna.com.my Malaysian Estate Owners' Association (MEOA) No. 27, Level 2, Jalan Kelapa, O Persiaran Raja Muda Musa, 41200 Klang, Selangor, Malaysia. Phone : +6 04 262 6431 Fax : +6 03 7877 7166 Email : hello@meoa.org.my www.meoa.org.my