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COSS – Unfair to Sabah August 18, 2007

Posted by wong jimmy in Oil Palm.

The government decision on cooking oil stabilization scheme (COSS) without any consultation with the planters especially in Sabah is totally unfair. The government should do its homework first, as with the decision already reached to protect consumers and packagers, the government had overlooked Sabah planters, who is already being imposed 7.5% Sabah state tax few years back, now Sabah planters is being imposed another 2.5%, making it 10% because of the COSS, while in Peninsular and Sarawak planters are only being imposed 2.5%.

So who are going to help the Sabah planters for their extra losses, it’s not fair to Sabah, there is no transparency at all, it’s a one-way traffic. Have the government consulted the planters. It is against natural justice simply making decisions at their wimps and fancies. The government is asking too much. The planters have the right to say NO. It should be a win-win situation for all especially for Sabah that is the poorest state in the country. There are a lot of things to iron out here before a final decision is made.

And what about Fled in Sabah and SLDB (Sabah Development Board), are they being exempted because they are government agencies?

Press Statement by DAP Secretary General Lim Guan Eng in Petaling Jaya on 8.8.07

Peter Chin confused about cooking oil stabilization scheme (COSS) and in a State of Denial That Sabah Oil Palm Planters Lose Out More Than Peninsular Malaysia Planters Because He Ignores The Extra 7.5% Sabah State Tax.

Plantation Industry and Commodities Minister Datuk Peter Chin Fah Kui is clearly confused about COSS and in a state of denial that oil palm planters from Sabah lose out more than their counterparts from Peninsular Malaysia because he ignores the extra 7.5% Sabah state tax. Peter Chin denied two days ago that the government would collect RM1,790 million from oil palm planters as cess under the COSS to stabilize the price and ensure the supply of cooking oil to consumers. The estimate of RM1,790 million of cess collected is based on the average Crude Palm Oil (CPO) price of RM2,700 per tonne for 12 months.

In contrast, Chin is confusing the issue by projecting only about RM855 million in palm oil cess collection for the period from June this year to May next year, based on a price movement of between RM2,150 and RM2,650 per tonne for crude palm oil. He said cess of RM855 million would cover the RM788 million required for COSS to stabilize the ceiling price of cooking oil and compensate losses suffered by cooking oil packagers.

This confusing version by Peter Chin of the amount of cess collected and subsidies required for COSS is different from what was reported in the Daily Express of Sabah in May 2007. On 15 May 2007, Peter Chin estimated cess collected of RM661.2 million over the next 12 months. On 20 May, 2007, Peter Chin was quoted as saying that the Government would spend RM145.41 million under COSS to compensate the 11 cooking refineries and 193 packagers nationwide who have been suffering losses the past five months or about RM350 million subsidies required for COSS over 12 months.

Why is Peter Chin talking of RM855 million of cess collected now compared to RM661.2 million three months ago or COSS subsidies required of RM788 million now as compared to only RM350 million in May? What is clear from Peter Chin’s confusing two versions is that the cess collected far exceeds the COSS subsidies required.

DAP supports the COSS to ensure and affordable price of cooking oil to consumers. However COSS should not be used as a device to extract extra money over and above what is required from oil palm planters. Moreover, the extra company taxes collected by the government from oil palm planters following the rise in CPO price from RM1,500 last year to RM2,700 this year should be more than enough to cover the COSS subsidies.

There is no reason for the government to impose ces under COSS and DAP reiterates its call for its immediate abolition. This oil palm cess has also imposed an extra hardship for Sabah oil palm planters, who account for one-third of Malaysia’s oil palm production, because Sabah imposes a special 7.5% tax not imposed by other states. For Chin to say that the planters in the state were in fact enjoying better nett income due to the rise in the prices of CPO and FFB when compared to the gain made by plantation operators in Peninsular Malaysia shows that either he is in a state of denial or deceiving not only himself but also others.

Peter Chin should hold a dialogue with oil palm planters both in Sabah and Peninsular Malaysia to understand the problems and unhappiness faced by them. Implementing measures without any consultation is not only undemocratic but also unprofessional and would not inspire confidence in the competency of the government to make informed decisions.




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