KUALA LUMPUR: National Association of Smallholders Malaysia (NASH) are disappointed with the government, for extending loans instead of grants to smallholders to replant their unproductive oil palms.
NASH president Datuk Aliasak Ambia, in a statement today, said inspite of the government via 2020 Budget offering incentives to smallholders, the end result would see oil palm planters heavily-indebted.
"While the 2020 Budget announcements of incentives sounds very good, governmental seems to have forgotten smallholders are already suffering from depressed palm oil and rubber prices," he said.
"By extending soft loans for our members to replant unproductive trees, many would be further burdened with debts," he added.
“Smallholders account for almost 50 per cent of the total area planted with oil palm. It is not right for the government to go on extending loans, as increasingly heavier debts on smallholders will eventually weigh on the country's economy,” he said.
Aliasak said the government should view oil palm cultivation as a long-term investment rather than a financial burden.
“The palm oil industry, particularly in the upstream which sees smallholders participation, contributes billions of ringgit to Malaysia's exports,” he added.
In 2011, Aliasak highlighted Malaysia's palm oil exports reached a peak of RM82 billion while in 2017 and 2018, annual sales amounted to RM77.8 billion and RM67.5 billion, repectively.
"We feel the RM550 million soft loan, offered by the government via Agrobank, should have been an outright grant to smallholders to replant their trees which would eventually contribute positively to the economy," he added.
Aliasak highlighted the discrepancies of rice farmers and fishermen receiving subsidies from the government while oil palm planters are offered soft loans and therefore, increasingly burdened with debts.
"If the government were to go on with the loan schemes, it will eventually backkire on the goverment's over-arching ambition to have the palm oil sector develop sustainably, in the generations to come,” he said.