KUALA LUMPUR: Oil palm smallholders can tap into RM300mil in government financing to ease the financial burden of replanting ageing oil palm trees.
Deputy Plantation and Commodities Minister Datuk Seri Huang Tiong Sii said the financing, provided through two government initiatives, would help smallholders manage the high cost of replanting and temporary income losses before newly planted trees begin to yield crops.
He noted that replanting costs could reach RM14,000 to RM16,000 per hectare, and newly planted crops do not begin producing yields immediately.
"The government had allocated RM100mil in hybrid financing aimed at assisting approximately 4,500 smallholders.
"In addition, the RM200mil Oil Palm Replanting Financing Programme (PTSS) was introduced to finance replanting activities involving landholdings of up to 40.46ha," he told the Dewan Rakyat on Thursday (Oct 29).
Huang added that the programme provides a four-year repayment deferment to ease financial pressure on smallholders during the replanting period.
"Smallholders are required to bear an interest rate of 4%, while the government covers the remaining interest costs," he said.
Apart from financial constraints, Huang said labour shortages remained another challenge for oil palm smallholders, particularly in harvesting, collecting fresh fruit bunches and maintaining plantations.
