In an interview, Malaysian Minister of Plantation Industries and Commodities, the Hon. Datuk Seri Mah Siew Keong, considers the impact of recent actions in Europe that are against the interests of the palm oil industry.
How does Malaysia view the EU Parliament’s vote in April to adopt the ‘Resolution on Palm Oil and Deforestation of Rainforests’?
The Resolution makes multiple unjust accusations against the palm oil industry, without offering any evidence. It does not recognise the positive and essential socio-economic role that palm oil plays in producer countries, by reducing poverty and enabling prosperity for millions of small farmers. It is highly disappointing, and highly unusual, that a trading partner would take such a confrontational approach.
As the EU works on formalising its sustainability requirements into law, what course of action does Malaysia have in mind?
What is critical now is that we in Malaysia – the government and private sector – must formulate a comprehensive and fully-resourced strategy to defend Malaysia’s trade interests in Europe. Securing continued market access for Malaysian palm oil is the over-riding objective.
The Resolution aims at phasing out the use of palm oil in the EU’s biofuels production by 2020. Analysts estimate that the EU uses 3-3.5 million tonnes of its palm oil imports for this purpose. Is this a significant volume in terms of Malaysia’s exports?
The volume is not the key factor in this issue – rather, it is the principle that the EU must not discriminate against palm oil. The proposal is unacceptable. It also does not make sense, as it would deprive Europe of an excellent year-round supply of feedstock that is sustainably produced.
This is not the first case of discrimination against palm oil in Europe. Just as Malaysia took a strong stance against the ‘Nutella tax’ proposal in France, we will be equally firm in resisting the process to give legal effect to the Resolution.
Could we confirm that the Malaysian government has engaged lawyers to prepare for a scenario where the Resolution may be enforced by law?
It is important to remember that Malaysia and other palm oil-producing countries had communicated facts about palm oil to the MEP Rapporteur in the European Parliament and to others ahead of the April 4 vote on the Resolution.
Malaysia’s Prime Minister has since made it very clear that, whenever there is discrimination, we will retaliate. The correct course of action may not necessarily be legal action, but a comprehensive strategy to defend our products and secure market access in Europe.
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2017 marks the first 100 years of the Malaysian palm oil industry. The initial commercial oil palm plantation was established at Tennamaram Estate in Batang Berjuntai, Selangor, in 1917.
The Hon. Datuk Seri Mah Siew Keong, Minister of Plantation Industries and Commodities, knows well the history of oil palm development in Malaysia. It has played an important role in the economic success of his home state of Perak, both by way of cultivation and downstream processing. In an interview, he considers the impact the industry has had on Malaysia and the world.
Malaysian palm oil has come far to become a successful commodity. Would the planters of 1917 have been amazed by the state of the industry today?
I think they would be amazed by what Malaysia – not just its palm oil industry – has achieved. So much has changed over 100 years. We were not even an independent nation in 1917. It is a testament to the brilliance and foresight of the palm oil community that it has remained a constant success and a force for good throughout the historical, technological and political changes of the past century. It is a truly remarkable achievement.
I am sure the founders of Tennamaram Estate would recognise one thing about the modern industry – that the commodity and its fundamentals remain the same: a high-yielding, cost-effective, versatile oil that is far superior to any competing oil. In Malaysia we have turbo-charged those fundamentals with world-class R&D; cutting-edge agricultural techniques; and a strong commitment to responsible and socially beneficial planting.
What have been the major historical turning points for the Malaysian industry over the past 100 years?
Obviously the establishment of the first plantation in 1917 was a major landmark. Two other key turning points also come to mind.
The first is the development of larger-scale integrated processing and exporting in the 1930s. This involved the transport of fruit to standardised processing facilities designed for the export market. So, the final product was of a higher quality than from African processors, which were still operating small-scale plants. This set a benchmark for palm oil quality globally – and helped the young industry in Southeast Asia get ahead of the curve.
The second was in the 1970s. At this time the Malaysian government pushed for the development of downstream processing industries and the diversification of export products. This included the founding of the Palm Oil Research Institute of Malaysia. This visionary step set the scene for successful collaboration between the private sector and government. It also created the platform from which the palm oil sector could expand: not just exporting a raw commodity, but also leading in higher-value economic activity.
We should not underestimate our place in history. I believe that historians will look back on these years as a golden age for palm oil. And we have tremendous technological advantages that, if harnessed, can take Malaysian palm oil to even greater heights.
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Malaysian Plantation Industries and Commodities Minister, the Hon. Datuk Seri Mah Siew Keong is a veteran of politics. He hails from Perak, one of the top three palm oil-producing states in Peninsular Malaysia and an area with a long history of commodity development.Read more »
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Encompassing both plantations and smallholdings, the dynamic Malaysian oil palm sector drives downstream industries, infrastructure development, socio-economic growth and poverty alleviation schemes. The industry was the fourth-largest contributor to the economy in 2014, accounting for RM66.12 billion (EUR 15.7 billion) of export earnings.Read more »