KUALA LUMPUR: Anuar Manap, the Member of Parliament for Sekijang, has called for more aid to the rural community impacted by the dip in commodity prices in the Budget 2016.
“Help for these rubber and oil palm smallholders, especially those within the bottom 40 per cent bracket, is essential. Almost every single commodity price is at a cyclical low, while the cost of living has gone up,” he said.
The crude palm oil price hit a low of RM1,856.50 per tonne recently, compared to 2014, when trades were between RM1,944 to RM2,921 per tonne.
Assistance to these smallholders was also crucial to demonstrate the government’s commitment to sustaining the livelihood of the rural community, said Anuar, who is also UMNO Youth’s Rural Affairs Bureau chief.
“It would help narrow the income disparity between the urban and rural populations and augur well for the nation, as the Budget 2016 is the first under the 11th Malaysia Plan.
“By providing aid to these smallholders, we are helping them sustain their livelihood while safeguarding the country’s main crop,” he added.
Malaysia alone contributes almost 40 per cent to the global palm oil production, while exports of the commodity adds five per cent to the gross domestic product.
In the rubber sector, the use of frozen rubber “cup lumps” in Malaysia’s road construction is expected to increase domestic rubber usage by 10 per cent annually.
The Public Works Department and the Malaysian Rubber Board are currently working together to study the use the cup lumps and have stepped up efforts to promote it as an additional material in asphalt.
Anuar said the El Niño phenomena would add to the woes of the smallholders given the notion that they would be hit doubly hard with higher temperatures and drier weather, making crops more vulnerable.
He pointed out that while coping with less returns from their smallholdings, they would also be affected by the higher cost of food due to crop disruptions and smaller yields.
“Rice producing states like Kedah may experience lower yields which may lead us to depend more on imported rice which could cost more because of higher demand and smaller yields,” he said.
El Nino is expected to impact 90 per cent of the world’s palm oil production located in Indonesia and Malaysia, in causing widespread crop damage from drought and extreme hot weather.
While inventories will fetch higher prices based on palm oil futures which have rallied over the past weeks, in part due to the market anticipating the El Niño, the drag on production will impact employment levels and incomes into 2016.
Meteorological predictions by the National Oceanic and Atmospheric Administration (NOAA) in the US, the Australian Meteorological Bureau and the Japanese all point to this El Niño being stronger than the 1997-1978 occurrence and possibly the strongest on record.
The NOAA assigns a 95 per cent probability of it lasting until next year.
The World Meteorological Organisation has predicted that El Nino’s impact on Malaysia will peak between November 2015 and January 2016.
According to the Meteorological Department, Sabah and Sarawak would be the first to feel the effects of El Nino.
“Experts are anticipating the dry weather to delay the ripening of fruit bunches alongside fire hazards on plantations. On the milling side, some palm oil mills may end up with concerns over the long-term availability of water for processing. Thus, the estate-mill supply chain may be disrupted.
“The prolonged dry weather could spell trouble for farmers as they prepare to replant rice and other crops. The government’s push for entrepreneur schemes and other measures to cope with the rising cost of living would be very timely.
“Some measures which have been proposed to alleviate living costs are higher 1Malaysia People’s Aid (BR1M) allocation, an incremental upward revision of the minimum wage, an optional reduction in employees’ EPF contribution and the slashing of personal income tax to raise household disposable income ” he added.
He lauded the government’s efforts in increasing the number of fair price shops such as the 1Malaysia People’s Shop, 1Malaysia Textile Shop, 1Malaysia Book Shop as well as eateries offering the 1Malaysia Menu. -Bernama