Sarawak Palm Oil Sector Losing RM2.8bil Revenue Due To Shortage of Manpower
The Sarawak palm oil industry has incurred revenue losses of some RM2.8bil a year due to the shortage of more than 12,000 manpower, a seminar here was told. According to Sarawak Oil Palm Plantations Owners Association (SOPPOA) chief executive officer Sylvester Fong Tshu Kwong, the labour shortage has also resulted in the Sarawak government losing more than RM133mil a year from the collection of sales tax on palm oil.
He said that as at June 2015, Sarawak had a shortfall of 12,042 harvesters. His calculation on the revenue losses was based on the average of 1.75 tonnes of fresh fruit bunches (FFB) per day harvested by one harvestor on 22 working days per month.The price of the FFBs used for the calculation was RM400 per tonne.
The RM2.8bil figure was made up of the loss in production of FFB, crude palm oil (CPO), palm kernel and crude palm kernel oil CKPO), as well as revenue loss in CPO and CKPO. “There is a severe shortage of field workers in the palm oil industry in Sarawak. We desperately need more fruit harvestors and collectors, otherwise the fruits will be left to rot on the trees, causing huge losses,” Fong said in his paper Labour requirements,remuneration system and costs of doing palm oil business – from Planters Perspective at the seminar.
The event on Addressing the manpower needs of the oil palm industry in Sarawak was organised by the state Land Development Ministry, in collaboration with Sarawak Development Institute.
Fong said besides the shortage of harvesters, the state oil palm oil estates had a shortfall of 26,624 field workers, 16,258 general workers and 4,402 other types of workers.
“The total field workers required as at June-2015 was 160,426 against total worker employed of 101,100, resulting in a shortfall of 59,326,” he added. Based on statistics,nearly 79% of the field workers are foreigners, mostly Indonesians.
“It appears that Sarawak plantation sector has become a training ground for the Indonesians,” remarked Fong.
He said as the state targetted to increase its oil palm planted areas to two million ha by 2020 from 1.4 million ha currently,the number of field workers needed would jump to 255,143, executives and staff to 13,428 (from 9,300). This estimation excludes the independent smallholders based on the assumption that they work on their own land.
“Currently,the only source of foreign workers supply is from Indonesia where supply is getting scarce. Indonesia will not continue to fulfill the needs of the industry for reliable workforce when their own plantation industry is increasing at faster pace and also facing shortage,” said Fong.
He said the expanding plantation sector offered lots of opportunities for the locals in employment, and he suggested the state to consider recruiting foreign workers from India, Nepal, Myamner in the short term..
Fong said wages in the Sarawak plantation sector were expected to rise due to a combination of factors, including declining supply and increasing recruitment cost of foreign workers. The other factor is the intensification of mechanisation in plantation works, resulting in demand for a higher level of skilled workers.
Describing oil palm as a “sunrise” industry in Sarawak, he said it would continue to contribute substantially to state revenue and state infrastructure development going forward. Last year, Sarawak earned RM8bil from palm oil exports, or 8.8% of the state’s total exports, valued at RM90.3bil. It contributed RM1.9bil in sales tax to the state government from 2010-2015.
News Source: The Star