KUALA LUMPUR (Sept 19): The Oil Palm Smallholder Replanting Incentive Financing Scheme 2.0 (TSPKS 2.0), introduced by the government through the Malaysian Palm Oil Board (MPOB) and Bank Pertanian Malaysia Bhd (Agrobank) earlier this year, has received 2,384 applications, covering 6,723.88 hectares to date.

In a statement on Thursday, the MPOB said that as of Sept 13, 2024, nearly half of the allocated funds had been approved, amounting to RM45.25 million in total financing.

MPOB director general Datuk Ahmad Parveez Ghulam Kadir highlighted the need for substantial capital in replanting, including seedlings, preparation and maintenance of plantations, until oil palm trees begin producing yields in the fourth year.

“Oil palm smallholders often struggle to raise sufficient funds upfront for replanting. The TSPKS 2.0 initiative provides them with the financial support needed to boost productivity and income,” he said in the statement.

He added that the scheme offers financing of RM14,000 per hectare for independent smallholders in Peninsular Malaysia, and RM18,000 per hectare for counterparts in Sabah and Sarawak. 

The financing period spans 12 years, with loan repayments starting in the 49th month after the loan has been disbursed.

Ahmad Parveez also revealed that MPOB, through a survey conducted in June 2024, had identified at least 71,130 hectares of oil palm trees aged over 25 years in smallholder estates, and 479,526 hectares nationwide.

“In response to growing demand for sustainable palm oil, Malaysia’s oil palm industry has benefitted from the Malaysian Sustainable Palm Oil (MSPO) certification scheme, which has been mandatory for all smallholders and industry players since January 2020.

“The TSPKS 2.0 initiative aims to revitalise smallholders’ productivity, which significantly contributes to the nation’s palm oil output.

“Replanting with elite varieties, such as Clonal Palm Series 3 (CPS3) and Palm Series 1.1 (PS1.1), which produce higher oil yields and grow at a slower rate, not only boosts income but also enhances cost efficiency and harvesting effectiveness,” he said.

He added that at the MPOB Oil Palm Technology Transfer Programme (TOT MPOB) 2024, held in July, MPOB introduced Clonal Palm Series 4 (CPS4), which can produce up to 50.8 kilogrammes of palm oil annually, compared with around 46 kilogrammes from tenera varieties.

Ahmad Parveez also noted that CPS4 exhibits a higher production of male inflorescences (MI), with 13 MI bunches per tree annually, compared with 9.8 MI from other clonal and tenera varieties.

In addition to TSPKS 2.0, MPOB offers other financial assistance schemes, such as the Simple Financing Scheme for Smallholder Agricultural Input (IPPKS), the Livestock Integration with Oil Palm Incentive Scheme (ITe), and the Crop Integration with Oil Palm Incentive Scheme (ITa), aimed at bridging the financial gaps faced by smallholders.

“As of August 2024, MPOB has received 250 IPPKS applications, with RM1.127 million approved for the purchase of agricultural inputs, such as fertilisers, herbicides, pest control liquids, light machinery, and infrastructure maintenance, covering 494.32 hectares of smallholder plantations.

“For the ITa and ITe schemes, 519 crop integration projects, involving bananas, pineapples, papayas, corn, watermelons, lemongrass and mushrooms, have been approved (ITa), while 1,228 projects have been approved for smallholders to engage in poultry farming, particularly with chickens and ducks (ITe),” he said.

TSPKS 2.0 is a matching grant scheme where the repayment amount to Agrobank is 50% of the total financing provided.

The initiative offers financial assistance to smallholders for replanting oil palm trees, and replacing ageing, non-productive estates.

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