KUALA LUMPUR (Feb 24): The government has proposed to allocate RM80 million for the palm oil industry to improve its sustainability practices, and counter the anti-palm oil campaign movement, said Prime Minister Datuk Seri Anwar Ibrahim.

Anwar, who is also the finance minister, said the government is opposed to activities of the anti-palm oil movement, spearheaded by international non-governmental organisations (NGOs).

“Thailand will also join forces with Malaysia and Indonesia to fight the anti-palm oil campaigners. This is a new development because previously, only Malaysia and Indonesia worked together (in this effort),” he said in the Revised Budget 2023 tabled in Parliament on Friday (Feb 24).

Malaysia and Indonesia, which together account for 80% of the world’s palm oil production, have been at loggerheads with the international NGOs and the European Union (EU) over palm oil production practices due to concerns over deforestation.

Malaysian palm oil agencies have criticised international NGOs such as Greenpeace and Friends of the Earth over their claims that were allegedly motivated by politics and trade, rather than genuine concern for environmental conservation.

On Jan 12, Deputy Prime Minister and Minister of Plantation and Commodities Datuk Seri Fadillah Yusof said the government may consider halting the export of palm oil to the EU, in retaliation to the trade bloc’s new deforestation regulations.

He said this is one of the options Malaysians would consider to deal with the EU’s negative palm oil campaign that has been turned up a notch in recent years.

During Anwar’s first official visit to Indonesia after taking office as Malaysia’s 10th prime minister, Indonesian President Joko Widodo and Anwar agreed to work together to counter the “discrimination” against palm oil.

Europe is the third largest importer of Malaysian palm oil, accounting for 9.4% of total exports in 2022.

The palm oil industry makes up about 5% of Malaysia’s economy.

In his budget speech, Anwar also announced an allocation of RM50 million in grants for the promotion of automation in the plantation sector through the use of robotics and artificial intelligence.

He also applauded Sime Darby Plantation Bhd, which employed mostly locals, saying Malaysians are willing to work in the plantation if they are paid at least RM3,000 per month and the working environment encourages the use of mechanisation and automation.

Get our comprehensive coverage of the revised Budget 2023 here.