ALLOW 100 PCT UTILISATION OF RA AGAINST STATUTORY INCOME OF PLANTATION FIRMS - MPOA

KUALA LUMPUR, April 27 (Bernama) -- In an urgent need to accelerate replanting to address the challenge of aging oil palm trees, the Malaysian Palm Oil Association (MPOA) urged the government to allow 100 per cent utilisation of reinvestment allowance (RA) against the plantation company’s statutory income.

It also continued to call for government support in the form of a replanting tax incentive, stressing the need for inclusion of oil palm replanting under the existing RA scheme.

MPOA chief executive Joseph Tek Choon Yee said replanting is a reinvestment and a move to fortify the industry's future and secure uninterrupted supply chains.

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“It's time for concerted action to ensure the sustainability and prosperity of the Malaysian palm oil sector," he said in a statement.

Tek said that in Sabah alone, there are over 500,000 hectares of aging oil palm trees of 20 years old and above, adding that the absence of effective mechanisation solutions, specifically for cutting bunches of tall palms and collecting loose fruit compounds the issue, leading to declining yields and crop losses especially in tall palm harvesting scenarios.

Therefore, he proposed a strategic replanting approach aligned with the cultivation cycle to ensure a balanced age profile in plantations, mitigating risks and fostering resilience.

“The catch lies in the necessity for sufficient funding to support this well-thought-out replanting programme with financial backing that balances between short-term financial gains and the long-term vitality, emphasising the need for foresight and fiscal prudence,” he said.

The MPOA, which represent more than 40 per cent of the entire oil palm cultivation in Malaysia, hosted a one-day seminar on the imperatives of oil palm replanting in Sandakan, attended by over 350 industry stakeholders.

The seminar, officiated by Deputy Plantation and Commodities Minister Datuk Chan Foong Hin, underscored the criticality of addressing aging oil palm trees through accelerated replanting to sustain supply chain business continuity and industry competitiveness.

In his speech, Chan commended Sabah’s replanting effort last year on 61,421 hectares plantation land, signifying a notable four per cent rate per year in Sabah in 2023, which was a significant leap from around 36,218 hectares in 2022.

According to Malaysia Palm Oil Board (MPOB) data, the replanted area of Sabah represented 47 per cent of total replanting in Malaysia of 131,917 hectares in 2023.

Chan also urged all the industry players to embrace the challenges that lie ahead with aging and tall oil palm trees with conviction and the willingness to reinvest in accelerated replanting.

“To bolster domestic production and address the interests of stakeholders, the collaboration and assistance of major palm oil entities are essential in undertaking replanting endeavours.

“This strategic approach is imperative for ensuring the sustained economic viability of the palm oil industry,” he added.

-- BERNAMA