KUALA LUMPUR: Palm oil production is important for the Malaysian economy – the country is known as the world’s second largest producer of this commodity after Indonesia.
For small farmers, this industry is a major source of income for them, in that it has helped eradicate poverty and enhance social mobility.
In this respect, the European Union (EU)’s intended ban on palm oil would affect the quality of lives of 650,000 small-holding farmers – reducing the incomes of those in the industry.
“We cannot keep silent and allow this to happen,” said Tiow Weng Theong, an advocate for Planters United – a non-governmental organisation (NGO) made up of a group of smallholder planters in Malaysia.
“Europe is the world’s second largest palm oil importer; thus, the EU ban under the Renewable Energy Directive (RED) by 2030 would lead to a gloomy future for Malaysia’s palm oil exports as palm oil is a major feedstock for biofuels,” he said in a statement released yesterday.
It is believed that about one-third – or 600,000 tonnes – out of two million tonnes of Malaysian palm oil exported to the EU, is used for biofuel production.
Moreover, Malaysia supplies 212,000 tonnes of palm oil-based biodiesel to Europe.
Small farmers manage almost 40 per cent of Malaysia’s 5.81 million hectares of palm plantations. On average, a small farmer with 3.9 hectares of land can earn a monthly net income of RM2,000 to RM2,100.
These farmers are typically from the ‘Bottom 40 Per Cent’ (B40) income-bracket of the population.
“Imagine if these small farmers were to lose their primary source of income because of the EU ban. Not only would this have a huge impact on the nation’s tax revenue and economic growth, it would also bring negative effects to their families.
“How are small farmers going to cope with the daily expenses of their families, their children’s education, and the worsening inflation rate?” argued Tiow, stressing the importance to uphold and safeguard ‘the lives of our Malaysian farmers’, and also ‘their rights to cultivate oil palms, obtain incomes and support their families’.
“Do not suppress the small-holding farmers – care for them and their families,” he stressed.