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ISSUES AND CHALLENGES ON LABOUR IN PLANTATION INDUSTRY: A MALAYSIAN PERSPECTIVE MINISTRY OF PLANTATION INDUSTRIES AND COMMODITIES (MPIC) INTERNATIONAL.

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Presentation on theme: "ISSUES AND CHALLENGES ON LABOUR IN PLANTATION INDUSTRY: A MALAYSIAN PERSPECTIVE MINISTRY OF PLANTATION INDUSTRIES AND COMMODITIES (MPIC) INTERNATIONAL."— Presentation transcript:

1 ISSUES AND CHALLENGES ON LABOUR IN PLANTATION INDUSTRY: A MALAYSIAN PERSPECTIVE MINISTRY OF PLANTATION INDUSTRIES AND COMMODITIES (MPIC) INTERNATIONAL PLANTATION INDUSTRY CONFERENCE AND EXHIBITION (IPiCEX2012) 5th November 2012

2 SCOPE OF THE PRESENTATION Contribution of the commodity industries to the economy of Malaysia (2007 – 2011) Targets of National Commodity Policy, Labour requirement in plantation sector (2012) Labour requirement by the year 2020 Introduction Low participation of local workers High dependency on foreign workers Mechanization related issues Issues To modernize the plantation sector by 2020 To increase local workers participation in plantation sector Challenges Foreign workers approval Innovations in the plantation and commodities sector (Mechanization) Human capital development Initiatives Taken Way Forward 2 MINISTRY OF PLANTATION INDUSTRIES AND COMMODITIES

3 CONTRIBUTION OF THE COMMODITY INDUSTRIES TO THE ECONOMY OF MALAYSIA (2007 – 2011) Source : Department of Statistics, Malaysia 3 MINISTRY OF PLANTATION INDUSTRIES AND COMMODITIES INTRODUCTION

4 NATIONAL KEY ECONOMIC AREA (NKEA)  Contribution to Gross National Income  Palm Oil – RM178 billion  Rubber – RM52.9 billion  Focus on high value added products/ downstream activities Entry Point Projects 4 MINISTRY OF PLANTATION INDUSTRIES AND COMMODITIES INTRODUCTION GNI Palm Oil RM178b Rubber RM52.9b GDP RM28.5b Exports RM242.6b

5 LABOUR REQUIREMENT IN PLANTATION SECTOR (2012)  1 415,929 are rubber owner-operators. Shortage still happens for rubber sector, mainly in estates.  2 15,390 are cocoa owner-operators. No shortage reported for cocoa.  3 67,247 are pepper owner-operators. No shortage reported for pepper.  Additional requirements based on ideal land : labour ratio – 110,364 workers.  Actual labour shortage reported by palm oil estates through e-Labour – 26,167 workers Commodity Area (Hectare) Labour Requireme nt (A) Ideal Land:Labour Ratio (Hectare/ Rerson) Existing Labour (Sept. 2012) Labour Shortag e (A - B) LocalForeign Total (B) Palm Oil 5,027,959502,79610 : 1 94,774299,560394, ,462 Rubber 1,025,000170,8336 : 1423, ,790454,985(92,533) Cocoa 21,71017, : 115, ,0401,902 Pepper 14,79129,5821 : 267, ,276(37,694) Total 6,089,460721,158601,006331,629932,635110,364 5 MINISTRY OF PLANTATION INDUSTRIES AND COMMODITIES INTRODUCTION

6 ACTUAL LABOUR SHORTAGE IN PALM OIL ESTATES (AS AT SEPTEMBER 2012) 6 MINISTRY OF PLANTATION INDUSTRIES AND COMMODITIES INTRODUCTION Job Categories P.M SabahSarawak Malaysia Shortage (%) Harvester & FFB Collector 6,029 2,877 3,339 12, Field Workers (Weeding, Fertilizer application & Pruning) 4,684 1,725 3,506 9, Other than field workers (Gardener, drivers & Security guard) , Others (Mondore, etc) , Total Shortage 12,381 5,549 8,237 26,167 Total Planted Area Covered By Survey (Million ha) 4.35 Total Responded Area (Million ha) 4.01 Responded Area (%) 92.31

7 LOW PARTICIPATION OF LOCAL WORKERS Due to the 3D factors (Dirty, Difficult & Dangerous) Location of workplace in rural areas Inadequate infrastructure facilities at plantation area Lack Of Interest Job creation at technical level (skilled and semi-skilled) level is very low Shortage is mostly at the low level job categories (harvesting and maintenance works) Higher Level Of Education ISSUES 7 MINISTRY OF PLANTATION INDUSTRIES AND COMMODITIES Soybean Harvesting in Iowa, United States

8 HIGH DEPENDENCY ON FOREIGN WORKERS Lack of mechanization Insufficient supply of local labour Employment of the illegal immigrants (PATI) still exist Too dependent on Indonesian workers Plantation Sectors Are Labour Intensive The development of palm oil industry in Indonesia Competition with other sectors and nations that requires foreign workers High cost of employing foreign workers Difficulties In Recruiting Foreign Workers ISSUES 8 MINISTRY OF PLANTATION INDUSTRIES AND COMMODITIES Mechanized Harvesting In Developed Countries Soybean Harvesting Sweet corn Harvesting

9 MECHANIZATION RELATED ISSUES Difficult and undulating terrain High cost of mechanization Complacency – resistance to change Difficulties in implementing mechanization ISSUES 9 MINISTRY OF PLANTATION INDUSTRIES AND COMMODITIES

10 TO MODERNIZE PLANTATION SECTOR BY MINISTRY OF PLANTATION INDUSTRIES AND COMMODITIES Increase usage of mechanization in plantation works Increase industry participation in R&D&C Come up with various practical new innovations Reduce the land : labour ratio for each category of field works CHALLENGES

11 TO INCREASE LOCAL WORKERS PARTICIPATION IN PLANTATION SECTOR 11 MINISTRY OF PLANTATION INDUSTRIES AND COMMODITIES Adaptation to newer technologies and skills upgrading Cooperation to improve image of the commodity sector through formal training Increase job creation at technical and management level Enhancing Skills of The Domestic Labour Force CHALLENGES

12 Fast Track Companies27,094 workers Fast Track Companies23,491 workers Normal Track Companies27,060 workers 6P Program 6,679 Companies37,945 workers Bangladesh G2G MechanismUnderway APPROVAL OF FOREIGN WORKERS (AS AT 30 th SEPTEMBER 2012) 12 MINISTRY OF PLANTATION INDUSTRIES AND COMMODITIES INITIATIVES TAKEN

13 INNOVATION IN THE PLANTATION AND COMMODITIES SECTOR (MECHANIZATION) Harvesting Technologies CANTAS – Mechanized cutter for oil palm ART – Mechanized tapping of rubber G-FLEX Transportation Motorcycle Trailer Compact Transporter Beluga Others Roller Picker – Loose fruit collector Mark III COBRE - Cocoa pod breaking machine 13 MINISTRY OF PLANTATION INDUSTRIES AND COMMODITIES INITIATIVES TAKEN

14 FINDINGS ON PERFORMANCE OF CANTAS BY KULIM (PILIPS’12) MINISTRY OF PLANTATION INDUSTRIES AND COMMODITIES 14 INITIATIVES TAKEN AREA : FIELD P2000 & FIELD P2003 ( HA) at Ladang Sungai Sembrong A. Saving on Price Bonus (P.B) and Price Incentive (P.I) CONVENTIONAL (ASSUMPTION) USING CANTAS (ACTUAL) No. of harvester require20 harvester12 harvester Days work in days Total Mandays in 20114,437 mandays2,662 mandays P.B + P.I4,437 RM 9.372,662 RM 9.37 RM= RM 41,574.69= RM 24, TOTAL SAVING ON P.B + P.I = RM 16, B. Saving on recruitment cost – General Expenditure Saving - 8 RM 1, / head = RM 10, GRAND TOTAL = RM 16, RM 10, = RM 26,874.55

15 HUMAN CAPITAL DEVELOPMENT IMPAC PLASMA ACADEMY HEVEA WISDEC KOKO KENAF LADA SMART PARTNERSHIP GOVERNMENT AGENCIES LOCAL UNIVERSITIES RISDA MARDI PRIVATE SECTOR Mechanization Skilled & semi- skilled labours 15 MINISTRY OF PLANTATION INDUSTRIES AND COMMODITIES INITIATIVES TAKEN HUMAN CAPITAL DEVELOPMENT

16 THE WAY FORWARD MPIC will provide continuous support for plantation and commodities industry Commodities sector to adopt mechanization Welcome smart partnership between IMPAC and the plantation industry 16 MINISTRY OF PLANTATION INDUSTRIES AND COMMODITIES THE WAY FORWARD

17 17 THANK YOU MINISTRY OF PLANTATION INDUSTRIES AND COMMODITIES


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