The Ministry of Plantations and Commodities (KPK) has stressed that the tariffs imposed by the United States (US) will not affect the input costs of oil palm plantations in Malaysia.
Its Minister, Datuk Seri Johari Abdul Ghani, stated that this is because most of the inputs used in oil palm plantation activities are sourced domestically.
He also informed that the tariffs have nothing to do with oil palm plantations as most of the inputs are sourced domestically.
Johari also added that his ministry is formulating a new scheme to increase the value of financing costs (grants and loans) for oil palm replantings previously funded by the government, which is expected to be implemented next year.
The statement was made when he was answering a supplementary question from Datuk Seri Ismail Abd Muttalib (PN-Maran) on the impact of the increase in agricultural input costs following the Reciprocal Trade Agreement (ART), Article 2.3, between Malaysia and the US.
Meanwhile, smallholders are now facing difficulties in obtaining loans.
The ministry will hold negotiations with banks to assist smallholders by pledging their plantations, while the government has the potential to provide interest subsidies as additional support.
Previously, the government has provided allocations under the Smallholder Oil Palm Replanting Program 2.0 (TSPKS 2.0), which is a hybrid assistance with 50% grant and 50% loan.
A total of RM100 million has been provided to KPK for 2024 and RM50 million for 2025.
Malaysia is expected to suffer a loss of export revenue of almost RM7 billion if it does not implement oil palm replanting in plantations that are more than 25 years old.
