KUCHING: The formation of Sustainable Palm Oil Clusters (SPOCs) under the Ministry of Plantation Industries and Commodities is slated to be the catalyst for increasing productivity and fresh fruit bunch (FFB) production for plantation smallholders.
In a recent online interview with The Borneo Post, Minister Tan Sri Bernard Dompok underscored Sarawak and Sabah as a suitable base for the majority of the SPOC pilot projects as many of the East Malaysian smallholders were relatively new to oil palm planting – many of whom are young and enthusiastic full time farmers.
For this, the government had allocated RM50 million in a dedicated fund aimed at cultivating higher yields and increasing productivity of smallholders within three years of securing the Roundtable on Sustainable Palm Oil (RSPO) certification.
“About 60 per cent (RM30 million) of the allocation is for the independent smallholders sub-sector while RM20 million is for estates. The fundable projects for estates was for biodiversity and sustainability-related projects or research,” Dompok said.
The minister had previously commented that through these clusters, farmers could earn up to RM769 from the present RM667 seen monthly from each hectare of oil palm.
SPOCs also help to generate a good income for smallholders through the formation of cooperatives where they could gain access to other agriculture-related products such as fertilisers and pesticide at a cheaper rate.
Dompok continued to highlight that in addition to an initial allocation of RM1.5 million to establish the 10 SPOCs, the ministry was considering an additional allocation to helped develop cooperatives within the clusters.
“This is on the back of the government planning to have 10 SPOCs each year until 2020 as Entry Point Projects (EPPs) under the New Key Economic Area (NKEA),” he stressed.
“There are not many smallholders’ cooperatives in East Malaysia and hence more chances that the newly established cooperatives will be successful due to less competition,” he pointed out. “There are also not many FFB dealers or agricultural input suppliers servicing these smallholders.”
These SPOCS currently involve more than 7,039 private smallholders working on an area spanning 28,292 hectares under the SPOC pilot project as of press time.
Dompok revealed that many smallholders were unwilling to replant their old and unproductive oil palms in view of the recent surge of crude palm oil prices (CPO) to more than RM3,500 per metric tonne.
“This will affect the SPOC’s progress as smallholders are encouraged to replant oil palms for higher productivity,” he stressed.
“On the other hand, with extra cash to spare, smallholders may put optimum fertilisers to boost yields, which many of them did not adhere to.”
Following up on the minister’s recent comment on the Telupid cluster in Sabah being the world’s first privately-owned small cluster to receive a RSPO certification, he revealed that the ground work was ongoing and was expected to be registered by March next year.
“As of this month (November), one cooperative had registered that is in Tongod, Sabah.”
On a global scale, Malaysia accounted for 65 per cent of the total 45 million tonnes of annual global production of certified palm oil commodities at present, followed by Indonesia and Papua New Guinea.
Dompok said this added value to Malaysia’s palm oil products by capturing the niche market, especially from the European Union apart from providing a good image to users of palm oil products.