THE lack of a suitable alternative method for harvesting fresh palm fruit has made the need for foreign labour even more urgent, industry players said.

They said that without these workers, tonnes of fresh palm fruit are left unplucked, which in turn means a heavy loss of revenue for planters and smallholders.

Recently, Plantation Industries and Commodities Minister, Zuraida Kamaruddin said the country’s oil palm plantation sector suffered RM10.46 billion in losses in the first five months of this year, largely because fresh palm oil bunches could not be picked due to the labour shortage.

The Ampang MP said that due to the lack of foreign labour required in the fields, about 1.5 million tons of fresh palm oil bunches could not be harvested within a month.

Malaysian Plantation Owners Association (Meoa) President Jeffery Ong said the oil palm plantation sector is currently facing a shortage of approximately 120,000 workers to optimise harvesting.

“Although farm operations can use machines, the industry has not yet been able to create cost-effective harvesting tools especially involving tall oil palm trees.”

“We still depend on human power while local people refuse to work in the plantation sector,” he told The Malaysian Insight.

He added that if the labour shortage issue was not addressed immediately, the Malaysian palm oil industry could lose about RM28 billion in potential revenue in 2022 alone.

Jeffrey said the lack of labour meant that farms would experience shortage of harvesters which he said would result in a reduction in the harvest cycle as well as a longer harvest period.

The cycle of harvesting fresh palm oil should be done between two to three times in a month, and done manually.

The situation, Jeffrey said, had resulted in many fresh bunches not being picked on time thus reducing the crops.

“The less the labour force, the lower the harvest, the number of fresh palm oil bunches that cannot be collected is getting higher year after year,” he said.

Data from Meoa showed that in 2021 there was a significant decrease in the yield of fresh palm oil at a rate of 15.47 metric tons per hectare, compared to 2017 which showed 17.89 metric tons per hectare, he said.

This is due to the lack of labour supply in the oil palm plantation sector.

He said the shortage of manpower in the plantation sector in 2021, during the early Covid-19 outbreak was only around 30,000 to 40,000 people.

However, due to the Movement Control Order (MCO), the number swelled and now the sector needs between 100,000 to 120,000 nationwide.

“The number (100,000 to 200,000) of foreign workers is currently needed to fill vacancies in the palm oil industry to enable the sector to move at a more productive level.

“We need to stress that more workers will return home to their country and if they are not replaced, the number of labour shortages will increase,” Jeffrey said.

Meoa, he said, suggested that the human resources ministry speed up the process of hiring foreign workers.

He also hoped that the government would facilitate the recruitment process through the Foreign Workers Centralised Management System (FWCMS).

“In the long run, it is necessary to create a special team comprising representatives from various industry sectors including human resource experts to evaluate the recruitment process in FWCMS and improve it over time,” he said.

Fruit pickers demanding more

Also affected by the shortage of foreign labour is a group of about 65,000 smallholders across the country.

Deputy National Association of Small Farmers Malaysia Adzmi Hassan said most smallholders are elderly citizens and only employed foreign workers to manage their farms.

He said the lack of foreign labour in the plantations had affected the income of smallholders like him who mostly used their services for the harvesting process.

“The automatic process is not practical for small farmers as the cost is high,” he said.

The sudden increase in the price of palm oil up to RM1,300 per metric ton recently has also affected smallholders because the cost of farm management had increased up to 40%, he said.

To make matters worse, he said the labour shortage had caused the price for harvesting to increase due to the high demand for labour services.

“The cost has increased, from RM60 to RM70 and some even up to RM80 per ton (harvest wages), there are also fruit pickers who don’t go by ton but go by bunch, before a bunch was RM1.20, now they ask RM5 for a bunch.

“When the price of palm oil was expensive, small farmers could afford it, now the price has fallen, the cost has increased, the price won’t go down once it has gone up.”

“The harvest cycle used to be 15 days, which has now increased to 20 days to more than a month, if palm oil is not harvested there will be no yield, if it is harvested late the fruit will fall and the value will be different,” he said.

The price of fresh palm oil bunches has started to decrease to a rate of RM700 to RM850 per metric ton.

He therefore expects the authorities to immediately resolve the labour shortage in addition to guiding the cost of labour service wages.

“We have a palm oil price guide but there is no management price. Harvesting costs need to be controlled,” he added.

Agricultural cooperative

The smallholders association also suggested that the government should start thinking about suitable methods to train labour from among local people.

This was because the issue of foreign labour in the palm oil plantation sector is expected to continue and a long-term solution is needed to avoid continued losses incurred by industry players.

“This foreign labour issue will last but we cannot rely on foreign labour alone, we have to train locals,” said Adzmi.

He said his association has suggested that the government establish an agriculture-related body and trains graduates who have yet to be employed to join the agricultural sector.

This method, he said, allows the labour market to be dominated by local workers as well as allowing the graduates to pay off their education loan debt.

“We have the National Higher Education Fund Corporation (PTPTN), the boys come out of school without work, it’s hard to pay the debt, I suggest establishing a national agricultural corporation and they can rent and work the land, and later use their income to pay the debt,” he said.

In addition, he added, the agricultural cooperative can provide capital loans to graduates and the government can provide a platform for them to market their products.

“That way we can train graduates to enter the agricultural field, they can also pay their debts,” said Adzmi.

The oil palm plantation sector largely depends on the labour force of which 75% consists of foreign workers. – July 22, 2022.