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ABSTRACT |
The
Production Cost of Oil Palm Fresh Fruit Bunches: the Case of Independent
Smallholders in Johor
Like in other perennial crops, the Malaysian oil palm
smallholding sector can be broadly categorized into organized and independent
smallholders. Despite the overall decline in oil palm smallholdings
recently, there has been an expansion of the independent smallholders™
land from 287 000 ha in 1999 to 320 000 ha in 2000. However, due to
the unorganized nature of the latter, updated data and information pertaining
to the performance of such smallholdings are limited. This paper attempts
to overview the economic performance of these smallholders based on
a survey in Johor, which has the largest number of independent smallholders
(45%) and the largest independent smallholdings (40%) in the country.
The paper also discusses the production cost structures of the independent
smallholders compared to their counterparts in the organized smallholder
sector as well as with estates.
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The
Indonesian Palm Industry
This paper reviews the past development and prospects
in the 2000s of Indonesian oil palm production, noting the rapid expansion
of the sector up to the late 1990s and fast growth of private estates
and smallholdings. It examines the organization, performance and constraints
of chief sub-sectors, indicating relatively low costs of production
on estates and even lower costs on smallholdings. It considers the nucleus
estate and plasma smallholding development as unexpectedly successful,
despite needs for further improvement.
The paper views the main current constraints as scarce development capital,
inefficient deployment of labour and other resources, poor technological
levels, and problems over land acquisition and security. It nonetheless
sees a slow improvement occurring, where this could be accelerated by
government support with credit and extension, especially for smallholdings.
Given such help, the industry should renew its expansion and become
the world™s leading oil palm producer.
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Zero
Burning Techniques in Oil Palm Cultivation: an Economic Perspective
Land clearing for oil palm cultivation used to be undertaken
by the clean clearing method, which included burning and re-burning
of biomass. The method pollutes the air and is costly to the society.
The government of Malaysia had imposed a ban on open burning in 1998.
A financial and economic analysis of various zero burning techniques
of land clearing for oil palm cultivation indicated that the techniques
bring higher return compared to the clean burn method. The benefits
of the zero burning techniques, in addition to cost saving from pollution
related problems, include faster returns, and savings in fertilizer
input from nutrient recycling and soil preservation. Hence, in addition
to abiding with the law, zero burning technique of land clearing earns
additional financial and economic benefits.
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An
Economic Perspective of Oil Extraction Rate in the Oil Palm Industry
of Malaysia
The national average
oil extraction rates (OER) in Malaysia since 1980 until 2002, have fluctuated
from a low of 18.48% in 1982 to a high of 19.87% in 1987/1988, although
many individual mills have obtained more than 20% OER.
In times of low prices of crude palm oil (CPO) as seen in the recent
period of 2000/2001 and low yield productivity, producers are challenged
to improve the performance of OER as this measurement is a management
tool in assessing the profitability of a plantation enterprise.
Historical OERs for the past 10 years are used to estimate at the macro
level, the quantity and value of CPO loss or gain, arising from the
annual change of OER. The differentials of the annual OERs and the 20%
benchmark OER are also used to estimate the loss in revenue, since until
now, the benchmark OER of 20% has not been attained. The highest loss
of CPO revenue amounted to about RM 255 million in 1999 arising from
an annual change of minus 0.31% OER, whilst that arising from the differential
of the OER in 1999 and the benchmark 20% OER, or a drop of 1.4%, amounted
to an astounding RM 1.15 billion in a single year based on an average
CPO price of RM 1449.50 in 1999.
If CPO is considered in the downstream processing, value adding that
could have been achieved ranged from RM 21.53 to RM 54.66/t in the five-year
period of 1997-2001
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Short-Term
and Long-Term Projection of Malaysian Palm Oil Production
Forecasting
is of fundamental importance in all of the sciences, including economics.
As such, its accuracy is of obvious importance as the forecasts generated
are normally being used as inputs to a decision-making process. Knowing
this fact, most forecasters have been hard pressed to prepare the most
realistic and accurate projections utilizing a variety of quantitative
and subjective methodologies. Besides this concern and although it is
extremely important to do their best to improve forecast accuracy, we
must learn to accept the fact that forecast error is an unavoidable
occurrence. Faced with this reality, the forecasters need to effectively
capture, measure, report and utilize forecast error to its benefit.
They will also keep on reviewing their models from which the forecasts
are based on due to the ever changing environment and improving forecast
accuracy through a variety of qualitative and quantitative techniques.
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