[ Back ]     [ Comments ]     [ Print ]

News Admin
 
Date
 22/10/2001
News Provider
 Mahamad Rodzi Abdul Ghani
News Source
 NULL
Headline
 A shot in the arm for low-profile agriculture sect

Monday, October 22, 2001 (The Star ) -THE low-profile agriculture sectorhas received a breath of life from the budget, which has directed itsattention to encouraging the development of new areas in the food andresource-based industry as well as fully exploiting downstream activitiesin existing commodity-based industries.In presenting the Budget 2002, the Prime Minister, who is also FinanceMinister, had called for the development of new areas in agriculture asthe growth of the sector had previously been largely dependent on theoutput of commodities, namely oil palm, rubber and timber.He said that as Malaysia was a major producer of rubber, timber and oilpalm the country must fully exploit downstream resource-based activitiessuch as vulcanised rubber and furniture, which had the potential tocontribute towards economic growth.According to the Prime Minister, downstream activities based on rubber,rubber wood and oil palm, which had export potential, could bringtremendous benefits if fully exploited.The budget has proposed that companies which reinvest in the production ofsuch resource-based products be granted income tax exemption of 70%, orgiven investment tax allowance of 60%, for a period of five years.The proposal is effective for applications received by the MalaysianIndustrial Development Authority (Mida) beginning Saturday.Dr Mahathir added that the government would be giving 100% tax allowanceon capital expenditure to encourage food production on a large scale forexport and import substitution purposes.This incentive was previously provided for prawn farming, floriculture andplanting of approved fruits such as papaya, banana, passion fruit, starfruit, guava and mangosteen.Also proposed was the extension of the scope of the 100% tax allowance oncapital expenditure for large-scale export and import food forsubstitution purposes to vegetable and herb farming, breeding of fish,including ornamental fish, cockles and oysters and planting of flowers.This proposal is effective from the year of assessment 2002.Dr Mahathir said food products would also provide the stimulus to the foodprocessing industry, in which Malaysia had the expertise and credibilityto develop halal food.He said this industry had the potential to penetrate internationalmarkets.To further strengthen the agriculture sector’s contribution to growth,also proposed was that reinvestment undertaken by existing agriculturecompanies be granted 100% income tax exemption against the statutoryincome for a period of five years.To ensure self-sufficiency in poultry farming, the budget has proposed forthe rearing of chicken and ducks in the eastern corridor of peninsularMalaysia, Sabah and Sarawak to be granted pioneer status with income taxexemption of 85% or investment tax allowance of 80% for a period of fiveyears.This proposal is effective for applications received by the Mida fromtoday.Another significant proposal was the provision of price support assistanceto the Federal Land and De-|velopment Authority (Felda) palm oil andrubber settlers faced with declining prices.Palm oil settlers would be given RM12 per tonne if prices go below RM900while rubber settlers would get 15 sen per kg if rubber prices fall belowRM2.50


ECONOMICS & INDUSTRY DEVELOPMENT DIVISION
Malaysian Palm Oil Board ( MPOB ) Lot 6, SS6, Jalan Perbandaran, 47301 Kelana Jaya, Selangor Darul Ehsan, MALAYSIA.
Tel : 603 - 7802 2800 || Fax : 603 - 7803 3533