Farmers get assurance on financing

BANK Pertanian Malaysia (BPM) does not foresee any
financing problems for farmers who opt to replace their
tobacco crops with kenaf plants under the East Coast
Economic Region (ECER).
The bank, which has been entrusted with channelling funds
to farmers under the tobacco loan scheme, said alternative
financing can be offered or arrangements can be made to
convert the tobacco farms into kenaf farms.
“The initiatives are part of efforts to bolster BPM’s presence
and exposure to the farming community especially those involved in
projects under the ECER,” general manager Martini Osman said in a
Kenaf farming has come to the forefront recently because the Asean
Free Trade Area, which takes effect in 2010, will see Malaysia reduce
duties on tobacco imports, making tobacco farming here less
The world’s largest producers of tobacco are China and Brazil, followed
by India, the US and Greece.
Tobacco farming has been the bread-and-butter of many rural Kelantan
and Terengganu households for many years.
Under the ECER, the target area for kenaf is about 10,000ha. It is
expected to increase the income of 10,000 marginal tobacco farmers
and create more jobs, the statement said.
The government had allocated RM2 million for kenaf research under the
Seventh Malaysia Plan (1996-2000) and RM3.2 million for the same
purpose under the Eighth Malaysia Plan (2001-2005).
Kenaf, also known as hibiscus cannabinus, is a fibrous plant that
matures in 100 to 1,000 days. The kenaf plant can be processed into
paper, clothing, building materials, car accessories and bio-fuel.Studies carried out on cows in Japan showed that those fed with kenaf
produced up to 45 per cent milk more than others. Kenaf makes quality
animal feed because its protein content is between 22 and 25 per cent
compared with cut-grass, which contains only 12 per cent.
Kenaf seeds also yield a vegetable oil that is edible and high in omega
antioxidants. Kenaf oil is also used in cosmetics, industrial lubricants and
The shrub, which grows to a height of 1.75m in just a month, is able to
produce very strong and long strands of fibre, suitable for house
construction, car seats, padding and trimmings, and various grades of
paper from newsprint to bond paper.
The National Tobacco Board is encouraging farmers to grow the kenaf
plant while the Veterinary Research Institute, the Malaysian Agriculture
Research Development Institute (Mardi) and Universiti Putra Malaysia
have set up the Kenaf Technical Group to jointly study the shrub as a
high-protein animal feed, especially for dairy goats.
“An allocation of RM68 million was set aside last year to lessen tobacco
farmers’ burden due to loans, and we are now encouraging them to grow
kenaf, which has huge potential,” said National Tobacco Board chairman
Datuk Mohd Zain Ismail.
Globally, kenaf fetches between RM700 and RM1,200 a tonne. China,
Bangladesh, Thailand and Myanmar contribute 95 per cent to global
kenaf production, which totals three million tonnes a year.
Matsushita Electric Works and Mieco Chipboard Bhd have formed a joint
venture to produce kenaf fibre-oriented board in Semambu, Pahang.