Putrajaya to fight discrimination against agricommodity sector

Deputy Prime Minister Fadillah Yusof says Malaysia will show the world its strong position, commitment and initiatives to ensure its agricommodity sector prioritises sustainability. – Facebook pic, May 29, 2023.

THE government will fight against discriminatory trade practices against Malaysia’s agricommodity sector, says Deputy Prime Minister and Plantation and Commodities Minister Fadillah Yusof.

As a producing and trading country, Malaysia is deeply concerned about laws against not only its palm oil, but also other main commodities such as timber, cocoa, and rubber, said Fadillah, who is on a Malaysia-Indonesia joint trade mission to the European Union (EU) to defend the palm oil industry following the activation of the European Union Deforestation Regulation (EUDR).

“Some aspects of the risk assessment process of the regulation are counter-productive to commitments to curb global deforestation, and run the risk of disincentivising producing countries,” he said at the luncheon with Malaysian diaspora in Brussels today.

Fadillah said the regulation announced by the EU on December 6 last year is based on weak reasoning and scientific basis.

The EU is currently developing due-diligence reporting to ensure companies comply with the EUDR.

“It places additional burdens on Malaysian palm oil exporters to the EU market, specifically on the additional traceability requirements and data that must be provided to end-customers based in the EU,” he said. 

The EU accounts for 9.4% of Malaysia’s palm oil export volume, or 1.47 million tonnes. 

Fadillah said Malaysia values the EU as an important trading and investment partner.

But Malaysia sees EUDR as a deliberate act by the bloc to restrict Putrajaya’s market access and protect its domestic oilseeds market, which is inefficient and cannot compete with the cost of palm oil.

Such a unilateral initiative, he said, is detrimental to free and fair trade, could adversely impact the global supply chain, and lead to higher food prices and reduced output at a time of record global inflation.

Political agenda and lack of knowledge

Fadillah said the debates within the EU over palm oil and biofuel sustainability reflect a lack of knowledge on the issue, and that Putrajaya is concerned the bloc is being driven by an overly political agenda.

“I want to reiterate that come what may, Malaysia will continue the battle to promote the positive image of Malaysian agricommodity products and prove what we can do best in adhering to sustainable production and consumption,” he said.

He said the United Nations’ Sustainable Development Goals remain Malaysia’s utmost priority.

“We have embarked on sustainability initiatives, including national certification schemes, such as the Malaysian Sustainable Palm Oil certification scheme, Malaysian Timber Certification Scheme and Sustainable Forest Management practices, with the view to facilitate access into the EU’s single market,” he said. 

He said these standards show the country’s strong commitment and efforts to provide sustainable and deforestation-free palm oil to its European and global customers. 

There is no need to add further cost and burden to the industry, particularly to smallholders, negatively impacting their welfare and livelihoods, he said.

Agricommodity sector vital to alleviate poverty

The agricommodity sector has not only become a poverty alleviation tool, but plays a significant role in reviving Malaysia’s economy post-Covid-19, Fadillah said.

He said the Plantation and Commodities Ministry will ensure the agricommodity sector is well governed and protects the livelihoods of more than 700,000 smallholders by providing job and business opportunities along the supply chain.

Fadillah said the government has remained steadfast in its efforts to mitigate challenges and fight the EU’s baseless allegations.

“It is with this mandate that my ministry decided to show the world Malaysia’s strong position, commitment and initiatives towards a sustainable agricommodity sector,” he said. – Bernama, May 29, 2023.

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