Palm oil given major push
Rubber cultivation promotion affected
Bangkok Post, Thursday, 17 June, 2004
Kultida Samabuddhi
Despite an earlier plan to expand areas used for growing rubber by a million rai, the Agriculture Ministry yesterday announced a scheme to increase oil palm cultivation from two to 10 million rai within 25 years. This would involve areas of land that are currently being used to produce rubber.
The ministry recently spent 1.4 billion baht buying 90 million seedlings under its plan to increase the country's rubber cultivation area. While the plan is still far from being completed, Agriculture Minister Somsak Thepsuthin yesterday called on farmers to switch from rubber to oil palm cultivation. The short-term aim over five years would be to increase the area of palm-producing plantations to 3.6 million rai.
The minister said rubber farmers willing to switch to oil palm cultivation would be paid 6,800 baht a rai. The ministry's move was made in response to Prime Minister Thaksin Shinawatra's calls to increase the country's palm oil output for the production of bio-diesel fuel.
Mr. Somsak claimed the Energy Ministry had asked for an urgent increase in palm oil production so as to meet imminent rising demand for bio-diesel fuel.
Rising investment costs had already forced planters to turn about 30,000 rai of rubber-growing areas in the South per year into oil palm plantations, Mr. Somsak said.
"Planting palm trees is more profitable than rubber production, which is more labour intensive and commands lower prices," he said.
The minister added that sugarcane plantations should also be replaced with oil palm trees because there was already an oversupply of sugarcane in Thailand .
On the question of whether the ministry's heavy promotion of palm oil could lead to a surplus that could send its price tumbling, Mr Somsak said, "the ministry's only task is to increase oil palm cultivation as much as possible. Other government agencies, particularly the Energy Ministry, must bear the responsibility for product management and oil palm price stabilisation".
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