Sustainable palm oil clusters

15/12/2010 (The Star Online) - VARIOUS activities has been implemented by the Plantation Industries and Commodities Ministry aiming to develop sustainable palm oil clusters (SPOC) in the country in collaboration with the Malaysian Palm Oil Board (MPOB).

Implementation of SPOC is envisaged to increase smallholder productivity from the current 12 to 15 tonnes of fresh fruit bunch (FFB) per hectare per year to 18 to 20 tonnes per hectare in the short term.

More than 7,000 smallholders who merged to form 10 clusters nationwide had been identified as pioneers for the setting up of the SPOC.

The Malaysian Palm Oil Board (MPOB), which will be implementing the SPOC seeks to achieve these objectives.

Firstly, the MPOB seeks to increase the productivity of independent smallholders through among others, implementation of Good Agriculture Practices (GAP) and the production of higher quality FFB.

The second objective is to facilitate certification of smallholder crops under the Roundtable on Sustainable Palm Oil (RSPO). The RSPO is a global multi-stakeholder association made up of players along the palm oil value chain.

The objective of RSPO is to promote the growth and use sustainable oil palm products through credible global standards.

Plantation Industries and Commodities Minister Tan Sri Bernard Dompok said the government had allocated RM50mil for this certification and the involvement of smallholders would complete the entire chain of the country’s palm industry in producing products recognised by RSPO.

“The smallholder sector presently accounts for about 40% of the total oil palm areas and over 28% of national palm oil production,” he said when opening the National Conference of Smallholders in August.

He said smallholders also played a role in realising Vision 35:25 which envisages an FFB yield of 35 tonnes per hectare per annum and an oil extraction rate of 25% by 2020.

Complementing the sustainability requirements, SPOCs will be encouraged to establish cooperatives to empower smallholders to raise income levels.

Thirdly, the MPOB aims to increase smallholder income by establishing cooperatives in SPOC to undertake other income generating activities.

This is to be achieved through among others, replanting of unproductive palm oil trees and the implementation of GAP, which involves fertilizer application, pesticide control and harvesting of FFB.

The cooperatives are envisaged to participate in activities relating to creating supplementary income to smallholders which include raising cattle and goats, integrating palm oil planted area with other short-term crops such as bananas and, marketing of these products on behalf of the smallholders.

The cooperatives are also expected to collectively purchase on behalf of smallholders agriculture inputs such as fertilizers and pesticides.

The significance outcome arising from the establishment of SPOC is the increase in smallholders’ income by way of enhanced productivity.

This is envisaged to accrue remunerative pricing as well as contribute towards the overall improvement if the social economic levels of the smallholders. In addition, the establishment of cooperatives in SPOC will empower the smallholders in decision making and undertake business activities to complement their income levels.

Malaysia’s palm oil industry is the fourth largest contributor to the economy and currently accounts for RM1,889 (or 8%) of the gross national income (GNI) per capita. The industry spans the entire value chain from plantations to downstream activities.

Malaysia Industry