The Malaysian Palm Oil Association is proposing three wish list items for the government in its Budget 2020 to safeguard the wellbeing of the oil palm industry as well as the 650,000 smallholders while improving the country’s revenue from the agriculture sector.
“It goes directly to the government’s coffers. For example, in 2017 alone, when the palm oil price shot up to RM2,800 per tonne on average, the industry paid the government RM1.2 billion,” he toldNageeb noted that under the current economic uncertainty, the industry is aware that it cannot ask the government for new subsidies or funds but insists on having the windfall tax collected to be channelled back to the industry.
On this note, he suggested that the government emulate the initiative of Indonesia, which imposes a tax on crude palm oil exports of US$50 and US$30 on processed palm oil products exports. A windfall tax is a tax levied by governments against certain industries when economic conditions allow those industries to experience above-average profits.
MPOA, according to Nageeb, is also hoping that the government would also allow and assist local plantation companies to hire more foreign workers as harvesting of fresh fruit bunches is still being done manually in the absence of machines or equipment that is proven to be economically viable.“The locals especially the younger generation do not want to work in the plantation industry... they deem this industry as a 4D - dangerous, difficult, dirty and demeaning - industry.
“About 50 percent of Malaysia’s plantation areas are located in Sabah and Sarawak and in these states, the labour shortage is even more acute, which could easily result in a crop loss of 20 per cent of the potential yield,” he said.“There should be a standardised tax collected in each state and not one state charging a five per cent tax while another state charges a 10 percent tax. We are willing to pay but give us a standardised tax and a reasonable amount of tax,” he added.