KUALA LUMPUR: The Ministry of Plantation Industries and Commodities (KPPK) is committed to continuing to contribute to the country's development, and strives to mitigate the local economy from the expectations of market uncertainties next year, even with a reduced allocation.

Under Budget 2023, a total of RM495.9 million was allocated to KPPK comprising RM241 million for operating expenditure and RM254.8 million for development expenditure.

This was a reduction of RM176 million or 26 per cent compared with the allocation in last year's budget, its Minister Datuk Zuraida Kamaruddin said in a statement today following the tabling of Budget 2023.

"The year 2023 is expected to be more challenging following the projection of inflation worldwide, however, the ministry is determined to face this challenge for the sake of developing the agricommodity industry including assuring industry sustainability, productivity through research, development, commercialisation and innovation, market development, and balancing wealth equitably," she said.

Budget 2023 focused on a more targeted agricommodity sector particularly involving the improvement in the supply chain of rubber raw materials through cooperatives, development of rubber-planted areas for smallholders and Malaysian Sustainable Palm Oil (MSPO) certification scheme

Among others, under Budget 2023, the government plans to re-channel the additional levy revenue to support employers to fund their automation initiatives to reduce dependency on foreign labour.

Commenting on this, the Malaysian Palm Oil Association (MPOA) said that while the plantation sector waits for details of the proposal, the growers are taken aback by the plan if it is based on the ratio of foreign workers to local workers in order to reduce the dependency on foreign workers while promoting greater local participation in the labour market.

"In all engagements with the relevant stakeholders, it was highlighted over and over again that this is not feasible.

"Instead, improving on the land-labour ratio linked to mechanisation has been proposed as the practicable option for levy review involving the plantation sector," chief executive Joseph Tek Choon Yee said in a separate statement.

He explained that the multi-tier levy system would further put unnecessary pressure on the cost of plantation operations in a commodity business that is a price taker and not price maker, thus inability to pass the costs to consumers.

-- BERNAMA