MPOA CEO Mohd Nageeb Abdul Wahab said the sector was already facing a shortage of some 36,000 workers before the Covid-19 pandemic hit, adding that this had affected its potential production by about 10%.
While the sector managed to retain workers during the movement control order (MCO) period, he said more workers could leave post-lockdown.
“There will be nobody to replenish the workforce. I am really deeply concerned by the government’s decision to freeze the recruitment of foreign workers.
“We have conveyed our concern to the (plantation industries and commodities) ministry. Hopefully the minister will take consideration of our problem,” he said at Bursa Malaysia’s Invest Malaysia 2020 virtual conference today.
Nageeb said palm oil yields had also stagnated, partly due to the shortage of workers but also because of other variables such as erratic weather and degrading soil quality.
He said the focus should not be on expanding but on producing more crops over the same land area, due to high costs and environmental issues that accompany expanding operations.
This, again, is tied to foreign labour as 84% of the plantation workforce is made up of foreigners, he said.
“All this while, the industry has been able to survive because we know there’s an availability of workers. If locals don’t want (to work), it’s fine, we have foreign workers. We are overly reliant,” he said.
He suggested that the science, technology and innovation ministry be roped in to help the industry progress towards automation, particularly in the harvesting of palm oil fruits.
He said this was crucial to improving efficiency and increasing harvest yields, which would enable Malaysia to maintain its competitive edge.
He also called on Putrajaya to review its tax structure for the industry, saying it was archaic and had flaws in the system which saw those making losses still needing to pay taxes.
He said the plantation sector paid the highest amount of taxes to Putrajaya, including corporate, windfall, property assessment, railway crossing business taxes and other levies, which he said eroded the industry’s profitability.
Noting that the industry had around one million smallholders whose source of income was in the industry, he said major social issues could arise if these matters are not addressed.
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