NASH president Adzmi Hassan said the government’s move to channel diesel subsidies to specific sectors would help maintain operational costs and increase production.
Adzmi also said the smallholders welcomed the subsidy aid of RM200 a month through the agri-commodity initiative under the Budi Madani programme, as it would help them lower the costs of transporting commodities such as palm and rubber.
However, he voiced hope that the government would relook the conditions for application, one of which he said was unsuitable for palm or rubber smallholders.
Adzmi said not many smallholders could get a minimum of RM50,000 to RM300,000 a year in sales.
“Most smallholders only work land with an area size of between 3.5ha and 3.8ha. To hit that minimum in sales, one would usually need 6ha.
“This may not be an issue in Sabah and Sarawak due to the land available, but the orchards in the peninsula are small. I hope the government can relook at this,” he told FMT.
The finance ministry announced the Budi Madani programme yesterday following Prime Minister Anwar Ibrahim’s message last week on the Cabinet’s decision to implement targeted diesel subsidies in the peninsula.
To stabilise the operational costs of the farming sector, the government also agreed to provide RM200 in monthly cash aid under the Budi Agri-Commodity initiative for the owners of private diesel vehicles, small farmers and commodity smallholders.
The incentive is part of a move to curb hikes in the cost of goods and services through the provision of diesel subsidies for 10 types of public transport vehicles and 23 types of goods transport vehicles under the subsidised diesel control system.
Small and Medium Enterprises Association president William Ng said he did not expect the targeted diesel subsidies to have any immediate effect on the sector’s operational and business costs.
“Some suppliers and freight forwarders will not adjust their logistical rates immediately,” he said, adding that transport costs usually make up 5% to 20% of SME operations.