Cluster idea can take root

TVET graduates, if the curriculum is rightly framed, should produce skilled local harvesters who are appreciative of the oil palm industry while meeting industry demands.

THE Plantation Industries and Commodities Minister’s suggestion to form smallholder clusters of between 8,000ha and 10,000ha to be managed by larger plantation companies to enhance yields is a good one.

This, however, can only be achieved with the cooperation of efficient plantation companies.

In today’s challenging environment, only a handful of listed companies are able to achieve their productivity potential. Most struggle to get economic yields of 4.5 tonnes/ha due to various factors.

The national average CPO yield last year was a miserable 3.14 tonnes, compared to 4.3 tonnes in the mid-1980s. We have not progressed over the last four decades! A loss of 1.2 tonnes/ha translates to six million tonnes of CPO or a revenue of over RM23bil!

Hence, the priority is to resolve the main issues and achieve a more resilient and sustainable industry. This will benefit producer countries and ensure food and biofuel security.

Efficient production also results in substantial social, economic and environmental benefits.

Interestingly, small- and medium-sized companies outperform the big players. Choosing the right company with the necessary resources to form a partnership with smallholder cluster cooperatives is therefore crucial.

As to shortage of workers and training, harvesters recruited from Indonesia and other countries are trained by plantation companies. This is a routine practice to optimise productivity.

TVET graduates, if the curriculum is rightly framed, should produce skilled local harvesters who are appreciative of the oil palm industry while meeting industry demands.

This will be the first step in a long journey. Hopefully, TVET programmes will attract calibred local youths who are prepared to stay and work in an estate environment.

I suggest appointing The Incorporated Society of Planters (ISP) as the training provider, an acknowledged establishment that has been training to all categories of staff in tree crop plantations for over 100 years.

Also, there are other challenges that need immediate attention, such as strategies to ensure food safety of palm oil, which should be intrinsically linked to sustainability and is absolutely necessary to future-proof the industry while being able to differentiate high quality sustainable Malaysian palm products from the rest of the world.

One critical issue is the environmental impact of large-scale production. Oil palm plantations have been linked to deforestation, habitat loss and displacement of indigenous communities.

Additionally, the use of pesticides and herbicides can contaminate soil and water, potentially leading to adverse health effects. It is essential to consider sustainability strategies when discussing the food safety of palm oil.

To ensure the safety of palm oil as a food ingredient, it is essential to implement comprehensive controls throughout the value chain.

The production and processing of palm oil as a food ingredient involves a complex value chain, from cultivation and harvesting to milling, refining and transport. Each stage has the potential to introduce contaminants that can affect the quality of the final product.

Furthermore, to ensure palm oil products are safe and effective, new and emerging contamination issues must be identified and addressed.

Regrettably, there seems to be a reluctance to embrace technology that could improve productivity, sustainability, quality and safety. Sustainability is compromised in the industry due to the focus on short-term profitability over long-term survival.

For example, the Malaysian Palm Oil Board (MPOB) research has highlighted 12.8 % contamination of commercial plantings with ‘non- Tenera palms’ nationwide. Shell DNA screening prior to planting would ensure only Tenera palms are cultivated, and hence, significantly increase yield over unit area and land use efficiency.

This is especially important considering that oil palm is a perennial crop with a 25-year economic lifespan.

However, the industry is more concerned about the cost of implementing the new technology despite the long-term economic and environmental benefits. Business as usual cannot be an option.

With respect to allowable contamination levels for food safety, the industry’s common stance that these values, including those for 3-MCPD and GE, should be market-driven and on a willing-buyer, willing-seller basis, is simply not acceptable.

Such a mindset will ultimately result in a stagnant industry allowing competitors to brand themselves and steal customers with novel solutions.

Sirim standards dictate the quality of planting material and quality and safety of palm oil and products produced in Malaysia to ensure they meet international quality standards.

However, although some of the standards may be outdated, there is an unwillingness to adopt new improved standards. For example, efforts to incorporate DNA testing for improved planting material have met with objections from the industry.

Efforts to reduce the maximum allowable Sirim limit of dura contamination from 5% have also met with resistance from industry members, who in the past boasted that their Dura contamination was negligible.

DNA testing has shown otherwise. It is ironic that Indonesia has already reduced its maximum allowable limit to 2%.

Sirim does not have limits on 3-MCPD and GEs. It is disheartening that MPOB’s planned and publicised implementation of licensing conditions for 3-MCPDE and GE starting Jan 1, 2023, has now been postponed to Jan 1, 2026, because of pressure from the industry.

Compromises on food safety threaten not only consumer health but also carry costly consequences and will undermine the value of the oil palm industry.

This article first appeared in Star Biz7 weekly edition.

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CPO , palm oil , oil palm , TVET , ISP , SIRIM , MPOB , plantation , harvesters


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