Kuala lumpur: An allocation of RM1.4 billion under the Smallholder Oil Palm Replanting Financing Incentive Scheme (TSPKS 2.0) is being pursued by the Ministry of Plantation and Commodities (KPK) to facilitate oil palm replanting across 82,979 hectares over five years. KPK Minister Datuk Seri Johari Abdul Ghani emphasized that this initiative is part of a long-term strategy to sustain Malaysia’s palm oil industry, making it competitive and ensuring optimal returns for independent smallholders.

According to BERNAMA News Agency, KPK currently receives RM100 million annually for TSPKS 2.0, targeting 5,900 hectares. However, Johari stated that the funds are inadequate for the smallholders. He proposed an increased allocation, averaging RM280 million annually, though approval is still pending. He highlighted the high cost of replanting, which ranges from RM18,000 to RM20,000 per hectare, and acknowledged that while the RM1.4 billion would only partially meet the replanting needs, it is a crucial step for supporting smallholders who manage 14.6 percent of Malaysia’s total oil palm planted area.

The current low replanting rate has resulted in a rise in old palm trees, affecting fresh fruit bunches (FFB) productivity. From 2014 to 2024, the replanting rate averaged 2 percent annually, below the 4 percent target. Consequently, the area of palm trees over 25 years old increased from 5.6 percent (302,004 hectares) in 2014 to 9.3 percent (520,067 hectares) by December 2024.

To achieve the desired 4 percent replanting rate, KPK is committed to supporting plantation companies, operators, and smallholders in enhancing replanting programs. This effort aims to replace old, unproductive trees with high-quality planting materials.

Regarding the proposal to utilize the Windfall Profit Tax and Reinvestment Allowance for strengthening replanting efforts, Johari noted that this falls under the Ministry of Finance’s jurisdiction. KPK has submitted this proposal during the 2025 Budget session, and it is currently under review.