Immediate measures needed to address labour shortage in Sabah's palm oil industry, says Warisan

KOTA KINABALU: The Sabah government must take immediate and comprehensive measures to resolve labour shortages faced by the palm oil industry, says Parti Warisan deputy president Datuk Darell Leiking.

He said that there was also a need for the state sales tax of 7.5% on palm oil to be reduced as it is proving to be a burden to smallholders especially at a time when they were unable to maximise their profits.

Leiking said the state government must "review, enhance and manage" the palm oil industry in Sabah properly to ensure that it will benefit the Sabahans directly.

He said that issues of labour matter in the palm oil industry fall under the Roundtable on Sustainable Palm Oil (RSPO) guidelines.

"It is imperative that the state government play its role as the facilitator, especially in terms of workers' documentation," he added.

He also suggested the creation of a separate database on Crude Palm Oil (CPO) and other palm oil derivatives revenue contributed by district-producing palm oil.

He said such districts should benefit in terms of public infrastructure and utility upgrades in development funds.

"All these districts receive back at least 40% from their respective contribution in terms of revenue," the former international trade and industry minister said.

"Until and unless we have achieved our food self-sufficiency level (SSL) target and the restructuring of the palm oil industry in the state has been completed, Sabah must prioritise the welfare of Sabahans by banning all types of export of cooking oil and to intensify monitoring at the border to prevent smuggling to neighbouring countries," he said in a statement.

Warisan's Tunku assemblyman Assaffal Alian said that issues currently faced by palm oil smallholders in Sabah, especially on labour shortage would affect the supply of subsidised cooking oil in the market.

He said that there was a need for the state government to prepare for the mass return of Indonesian workers back to their country of origin and also the potential threat of El Nino phenomenon.

Assaffal said that last year's cooking oil shortage in Sabah saw the price of 1kg of subsidised cooking oil soaring from RM2.70 to RM6 per packet.

"As with the rest of Sabahans, Warisan initially thought that the shortage was caused solely by hoarding and smuggling activities but on checking the Department of Statistic Malaysia report on State GDP 2022, we realised that it may not be the case."

He said the report stated that "the agriculture sector for Sabah fell by 0.2 per cent (2021: -2.2%) owing to a contraction in the crops sub-sector, primarily oil palm activity.

On checking further, he said a Malaysian Palm Oil Board (MPOB) report revealed that "CPO production in Sabah declined by 1.7% from 4.36 million tonnes in 2021 to 4.29 million tonnes in 2022.”

He said interestingly MPOB CPO production in Peninsular Malaysia and Sarawak increased by 3.2% and 2.5% to 10.16 million tonnes and 4.01 million tonnes respectively.

"This roused our curiosity as to why both peninsula and Sarawak registered an increase but Sabah a decrease," he said, adding that Sabah has 1,326,940ha and Sarawak 1,488,917ha of matured palm oil.

"It would be illogical to say that weather was the cause of it (decrease) since both states are located on the same island," he said.

"Warisan now believes that the shortage of subsidised cooking oil in the state is not caused only by exporting or smuggling of cooking oil to neighbouring countries but also due to insufficient manpower to harvest the palm oil fruits.

"And it will be our smallholders, who are unable to maximize their profit and yet expected to pay the sales tax of 7.5%, most affected by this labour shortage and also the Sabahans who need the subsidised cooking oil," he added.

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