KUCHING: As announced by the Prime Minister’s Office on 5th September 2018, the minimum wage of RM1,050 a month will be implemented nationwide from 1st January 2019. Previously, the minimum wage for Sabah and Sarawak were set at RM920 per month and peninsular Malaysia at RM1,000 per month.
The new minimum wage standard to be implemented next year will adversely affect the palm oil industry in Sarawak which is already facing numerous challenges apart from wage structure, said the Sarawak Oil Palm Plantation Owners Association (SOPPOA) in a statement yesterday.
Foremost, the current low prices for palm oil internationally are posing serious challenge to the industry in Sarawak as majority of the palm oil in the state is export oriented.
It is also well documented that the yield per hectare for Sarawak is around 16 ton per year which is below the national average, despite the best efforts of the planters and the Malaysian Palm Oil Board (MPOB) to improve the yields here.
With the lower yield and low prices, oil palm companies operating in Sarawak are just about break even while others with bank loans and young palms will face difficulties in the coming year.
SOPPOA is not against increase in minimum wage but would like it to be implemented with increase in productivity as part of the whole structure.
It should also be noted that the palm oil industry in Sarawak is facing challenges also from other industries for workers and the wage increase will definitely have an impact in the palm oil industry here in the coming year.
The fact that the cost of doing business in Sarawak is much higher compared to other parts of Malaysia plus the increase in minimum wage will further erode the competitiveness of Sarawak based companies.
Currently, the piece rate system which is already widely adopted by a number of companies provides an alternative to the minimum wage system and could even provide higher earnings than stipulated under the minimum wage standard system.
