KUALA LUMPUR: The government has allocated RM2.4 billion to the Federal Land Development Authority (Felda), Felcra Bhd and the Rubber Industry Smallholders Development Authority (Risda) to invigorate agro-commodity activities further and enhance the socio-economic status of smallholders.
Prime minister Datuk Seri Anwar Ibrahim said as of June, the agro-commodity sector had contributed RM38 billion, equivalent to 5.0 per cent of the gross domestic product (GDP) and RM77.4 billion, or 11 per cent, to the country's exports.
"This impressive achievement comes despite facing numerous challenges and the uncertainties of the global economy.
"Among these challenges are the implications of non-tariff barriers enforced by importing countries like the European Union Deforestation-Free Regulation," he said at the 2024 Budget speech in Parliament today.
He also highlighted other issues impacting the sector including the reliance on foreign labour and adoption of modern technologies.
Anwar said by 2027, the area of aging oil palm trees over 25 years is expected to reach over 560,000 hectares. This will adversely impact the productivity of fresh fruit bunch yields, leading to losses of up to RM7 billion annually.
"To address this challenge, the government will introduce a palm oil replanting incentive programme with an allocation of RM100 million. This incentive will be offered as grants and loans to 7,000 individual smallholder oil palm farmers," he said.
Further, Anwar also highlighted that the national palm oil industry needs to defend against misconceptions from Europe consistently.
"To this end, the government has allocated RM70 million to enhance the sustainability of the palm oil industry and amplify the campaign against anti-palm oil on the international stage," he said.
In his 2024 Budget speech, Anwar said the Malaysian Rubber Board had developed a method using stimulant gas that can triple rubber production while extending rubber trees' lifespan to 25 years.
To that end, RM10 million has been set aside to implement a pilot project to benefit small rubber farmers over 1,000 hectares.
The government also designated RM90 million to Risda and Felcra to encourage smallholders to optimise land use by producing food crops and livestock, such as mushrooms, pineapples, coconut, cattle and poultry.
Anwar said to boost plantation productivity and reduce dependency on foreign labour, mechanisation and automation, like drones and autonomous vehicles, will be promoted.
The scope of automation tax incentives will be expanded to include the commodity sector under the Ministry of Plantations and Commodities.
"In the 2023 Budget, I raised the activation price threshold of the Rubber Production Incentive (IPG) from RM2.50 to RM2.70 per kilogram.
"Once again, after hearing the grievances of rubber farmers, the government has agreed to further raise the IPG price to RM3 per kilogram with an allocation of RM400 million," Anwar said.