PETALING JAYA: The National Association of Smallholders (NASH) wants the government to flex its muscles by leveraging the huge multi-billion dollar defence contracts with European Union (EU) countries against palm oil exports.
Otherwise, the body representing 600,000 oil palm smallholders warned, Malaysia would risk seeing the industry collapse in a couple of years.
NASH president Aliasak Ambia said countries in the EU, especially France and Italy, were pushing through legislation that might see the end of palm oil entering these countries despite having earned big bucks selling defence equipment to Malaysia.
Aliasak called for a joint body comprising ministries such as defence, international trade and industry, plantation industries and commodities, and finance to be formed to coordinate the matter.
“We all know how much France and Italy have benefited from defence contracts like the Scorpene submarine deal, the littoral combat ships and helicopters, among others.
“Malaysia must send a strong signal that its future deals will be tied to trade-offs favouring the Malaysian palm oil industry as well as its other commodities. It is time to show these countries that they cannot disrupt our rice bowl while enjoying the benefits of our contracts,” he told FMT.
He said these deals must be negotiated using a barter trade mechanism to be paid in part or full using palm oil, adding that the Russian defence deals were already using this mechanism.
Aliasak warned that Malaysia would lose out when the EU began implementing the anti-palm oil laws drawn up by its members by 2024.
“This is sinful for, if you take the smallholders’ families into account, it could impact more than two million people.”
Smallholders account for nearly 40% of the total palm oil production in the country which averages 20 million metric tonnes annually.
Aliasak said there had been a systematic anti-palm oil campaign in the EU over the last 10 years, all supported by EU parliamentarians and legislation.
“The culmination of this campaign will see the exclusion of palm as part of the biofuel mix by January 2023. It will only allow biofuels using rapeseed and soybean oil which are their home grown products,” he said.
Malaysia currently enjoys prime position in the global oils and fats trade with the palm oil industry contributing in excess of RM65 billion annually to the nation’s economy.
Reports indicate that the French agenda is to remain a significant agricultural nation by supplying a major portion of the region’s rapeseed oil, which competes directly with palm oil.
In Italy, the Greens in parliament have begun to campaign against the continued use of palm oil as part of the nation’s climate agenda and plan to progressively stop using palm oil in their biofuel mix.
“These two EU nations are currently major contenders for proposed helicopter purchases through Airbus Helicopters in France and through AgustaWestland in Italy,” Aliasak said.
He said France’s Airbus Industries had also benefited significantly from major aircraft purchases by Malaysia Airlines, AirAsia and the Royal Malaysian Air Force.
FMT has reached out to the plantation industries and commodities minister for comment.