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Plantation and commodities ministry to strengthen engagement with private sector to enhance productivity

KUALA LUMPUR: The Plantation and Commodities Ministry will increase its engagement with the private sector to further enhance the country’s commodity productivity, following concerns about its declining performance.

Its Minister, Datuk Seri Johari Abdul Ghani, stated that several commodities, which previously showed good production performance, have not progressed over time and have been surpassed by neighboring countries.

For example, he mentioned that in 2013, Malaysia produced 20 million metric tons of crude palm oil (CPO), but this year, it has decreased to 18 million metric tons, while Indonesia’s production has grown from 19 million to 26 million metric tons in the same period.

Additionally, Malaysia was once the largest producer of natural rubber in the 1970s.

However, last year, Vietnam, now the world’s third-largest exporter of natural rubber, produced over one million metric tons, while Malaysia only reached nearly 470,000 metric tons.

“In reality, this ministry needs to go out and engage extensively with the private sector. Any private company involved in the relevant commodities, we need to see how we can sustain or develop this industry.

“For companies that are ‘aging,’ we need to see how we can change their business model. We need to have the right technology and ensure efficiency,” he said.

He made these remarks during a special interview programme titled ‘Special Narrative Special: Optimising the Country’s Agri-Commodity Output’ aired on RTM, last night.

Johari said that due to the decline in yields, some commodities have to be imported to meet the needs of local companies, such as natural rubber for glove manufacturing and cocoa for chocolate production.

“In the past, we could produce cocoa up to 225,000 tonnes, but today, it’s only 500 tonnes. So, we have to import cocoa and process it.

“If we import raw materials and produce them here, our margin is small because we no longer process what we produce,” he said.

Johari stressed that the commodity policy needs to be consistent and should not constantly change for it to show good results in the long term, especially in the event of changes in ministers or governments.

“This is not just rhetoric. If you look at the planning, it’s perfect on paper, but when dealing with the private sector, we need to help them because more income for them is better for the country in terms of tax collection, job opportunities, and a growing economy,” he said.

Furthermore, Johari stated that smallholders also need attention because their low productivity has a significant impact on the country, for example, 27 per cent of the 5.6 million hectares of oil palm plantations in the country are managed by smallholders.

This includes grants and loans to help them undertake replanting and ensure an ecosystem that supports their productivity.

Source : NST BUSINESS TIMES

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