KUALA LUMPUR (Oct 19): The increase in the threshold value of the windfall profit levy (WPL) gives plantation companies room to operate more efficiently, especially to face the competitive global vegetable oil market, Malaysian Palm Oil Board (MPOB) director general Datuk Dr Ahmad Parveez Ghulam Kadir said.
“The increase in the WPL threshold value allows companies to plan investments with a focus on long-term initiatives.
“This includes strategic investment in the replanting of old palm trees which are increasing in area, which in turn can increase the productivity of farm produce,” he said in a press statement.
Budget 2025’s announcement on an increase in the current WPL threshold value from RM3,000 per tonne to RM3,150 per tonne for Peninsular Malaysia, and from RM3,500 per tonne to RM3,650 per tonne for Sabah and Sarawak, is a positive step by the government in supporting the palm oil sector.
"Although the increase is moderate, it is an initial effort that can reduce the pressure of the increase in the cost of palm oil production," he said.
The allocation of RM100 million for the replanting programme will benefit more than 1,500 smallholders, over 5,900 hectares.
The implementation of replanting incentives encourages smallholders to replant old oil palm trees that are less productive, to increase oil palm yield, as well as smallholder income.
"This step strengthens the country's oil palm sector and the economic stability of smallholders in the long term," said Ahmad Parveez.
He added that the announcement of an allocation of RM65 million to counter misunderstandings about palm oil at the international level, especially from the European Union (EU), is a strategic move to strengthen the Malaysian palm oil market.
“This initiative not only helps in intensifying the anti-palm oil campaign but also corrects misconceptions about palm oil. This initiative also covers efforts to improve the sustainability of the palm oil sector through the Malaysian Sustainable Palm Oil (MSPO) certification.”
The MSPO certification is very important in improving the reputation of Malaysian palm oil locally and internationally, and proves that the country's commitment in ensuring that the oil palm industry incorporates sustainable practices that are in line with international standards.
In this context, the MPOB sees the need for the allocation to be used to empower private smallholders, through the Sustainable Palm Oil Clusters (SPOC).
Through the SPOC approach, smallholders get the support of MPOB advisory services in sustainable practices that are in line with the principles of sustainability. Smallholders play a significant role in Malaysia's palm oil supply chain, he said.
The government's initiative to provide automation tax incentives, as well as raising the minimum wage to RM1,700 per month, can attract local workers to pursue a career in the plantation sector.
The automation tax incentive will encourage oil palm plantation companies to use modern technologies, such as drones and artificial intelligence (AI), which can increase farm productivity and reduce dependence on foreign workers.
"The increase in the minimum wage is a positive step that will increase the income of workers involved in the oil palm industry chain. The introduction of automation and more competitive wages will strengthen the competitiveness of the Malaysian oil palm industry as a whole."
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