KUALA LUMPUR (Oct 11): Concerned by the impact of low commodity prices on livelihoods of Malaysians in the plantation sector, the government has proposed a palm oil replanting loan fund of RM550 million.

In the budget speech 2020 in parliament today, Finance Minister Lim Guan Eng said the fund will be extended to smallholders collateral-free at an interest rate of 2% per annum, with a tenure of 12 years, including a four-year moratorium on repayment.

The replanting will be undertaken using the latest seedlings and will be in compliance with Malaysian Sustainable Palm Oil (MSPO) standards to ensure better productivity and marketability.

Additionally, RM27 million will be allocated to support Malaysian Palm Oil Board’s (MPOB) efforts to market palm oil internationally and counter anti-palm oil campaigns.

The use of B20 biodiesel for the transport sector will be implemented by end-2020, Lim said. This is expected to increase palm oil demand by 500,000 tonnes per annum.

For the welfare of FELDA community, Lim said the government will allocate RM810 million as support.

This comprises RM250 million for an income enhancement programme benefiting 11,600 settlers; RM300 million to write-off interest of settlers’ debts; RM100 million for Felda water supply projects; RM70 million for housing the new generation of Felda settlers; and RM90 million for the upgrading of Felda roads and basic infrastructure.

Separately, the government plans to provide RM738 million for the Rubber Industry Smallholders Development Authority (Risda) and the Federal Land Consolidation and Rehabilitation Authority (Felcra) to implement various income-generating programmes to benefit the more-than-300,000 Risda and 100,000 Felcra smallholders.

The government will also provide RM100 million for Rubber Production Incentive in 2020, to enhance the income of smallholders faced with low rubber prices.