Tuesday, 14 July 2009

Planters prefer Sarawak and Sabah than Indonesia

Tuesday July 14, 2009, The Star, Malaysia

Commodities Talk - A weekly column by Hanim Adnan

Logistics and cost benefits make NCR land schemes attractive

WHILE interest in the expansion of oil palm hectarage in Indonesia has still not waned, many local plantation groups are seen zooming in on the native customary rights (NCR) land development schemes in Sarawak and Sabah.

The rationale can be largely due to logistics and cost-benefit reasons. Both state governments are also actively converting more under-utilised NCR land into large-scale oil palm plantations with the aim of improving the socio-economic position of the landowners.

At the same time, the recent increase in the cost of plantation land in popular oil palm growing areas of West Kalimantan and Sumatra amid the current global economic crisis has deterred local planters’ ventures abroad.

It is believed that Sarawak has 1.5 million hectares and Sabah about one million hectares of NCR land suitable for oil palm cultivation.

Last week, cash-rich Sime Darby Bhd announced its plan to invest RM100mil to grow oil palm on NCR land in Sarawak with an initial area of about 20,000ha.

The group is targeting to develop 50,000ha each in Sarawak and Sabah within the next few years.

Other big groups with existing joint ventures in NCR land in Sarawak include Sarawak Oil Palms Bhd, Ta Ann Holdings Bhd, Boustead Holdings Bhd, IOI Corp Bhd and Nestle (M) Bhd.

Successful ventures to date include the 14,000ha Boustead Pelita Kanowit plantation, whereby a group of 1,701 people from 126 longhouses that participated in the venture received a total of RM1.68mil in dividends.

Despite initial doubts, fears and other obstacles, the pilot Kanowit oil palm project to develop idle NCR land has been a success.

Nestle also harvested its first red rice crop early this year via its joint venture with the Bidayuh NCR landowners in a pilot project in Serikin. Plans are under way for the group to participate in a similar venture with Iban NCR landowners in Sri Aman.

Timber group Ta Ann also plans to tap more NCR land bank for its oil palm plantation expansion as it is not interested to venture into Indonesia.

However, on the back of this rosy outlook, there are still many controversial NCR land matters, including land leases issuance to plantation and logging companies which need to be dealt with carefully by both state governments.

In Sarawak, the indigenous Ibans have cited their fear of losing NCR land to timber and plantation companies, with some claiming that their NCR land was taken away “illegally” as most of the land was undeveloped and without titles.

The Berawans in Ulu Baram are also initiating legal proceedings to have their ancestral forests gazetted as NCR land.

To date, there are over 200 litigation cases against the authorities and beneficiary companies in the logging and plantation sectors for encroaching on NCR land.

The growing conflict on the ground is mostly between Iban NCR landowners and the government and companies which have been issued with logging rights and plantation land leases.

· Hanim Adnan is assistant news editor at The Star. She believes that for the benefit of all, proper consultation must be held between all invested parties with the indigenous communities prior to implementing projects on NCR land.