SOURCE: Tashny Sukumaran, South China Morning Post
Prized for its sweet and creamy flesh, the Musang King or Mao Shan Wang durian is one of Malaysia’s most important exports, with 70 per cent of this fruit produced in the state of Pahang and sent to places like mainland China, Hong Kong and Singapore.
Now, production may take hit with the announcement of a corporation taking over production and edging out small-scale farmers.
A joint venture deal between the state government and the newly formed Royal Pahang Durian Resources (RPDR) corporation saw the lease of more than 5,300 acres of land in the area of Raub awarded to the company in a contract that an opposition lawmaker said would disenfranchise local farmers.
The deal, ostensibly to make way for large scale durian farming, will legalise smallhold farmers who have been tending the land for years and allow them to obtain certifications required for export, but also require them to meet yield targets and sell their produce to the corporation at a set price.
Assemblyman Chow Yu Hui said in a statement that the contract would see corporations gain a monopoly over the durian trade and send prices soaring.
“Without self-regulation under the free market system, the price of durian is likely to skyrocket while durian vendors and durian processing plants might even shut down eventually due to a lack of competition, as well as the increased difficulty in collecting durians,” he said.
“Additionally, in order to collect the unreasonable amount of durian as stipulated in the unequal contract, farmers might eventually be forced to plant low-quality durian trees that could produce a larger amount of harvest.”
According to economist Khor Yu Leng, the area will be equivalent to between four or five per cent of Malaysia’s production area – which amounts to about 50,000 hectares – and is home to the higher value Mao Shan Wang trees.
Khor said it appears as though the resident farmers – who are among Malaysia’s wealthiest due to the durian boom of recent years – lack full land rights, meaning the new company is essentially a private-public partnership that will be the landlord for a number of durian farmers.
According to news reports, the farmers will have to pay about 32 million ringgit (US$7.5 million) in rental for 2020, sell their durians to Royal Pahang Durian, and adhere to volume targets.
“Based on durian yields and tree densities popularly cited by industry players, we can estimate a potential 220 million ringgit (US$51.6 million) worth of durians from these areas. Oft cited costs are over 20 per cent of this revenue and the land rental could push up these costs by 75 per cent,” said Khor.
In Malaysia, durians have been promoted as a high income opportunity, with investors encouraged to put money in area or tree units.
For farmers, durian is far more lucrative than Malaysia’s other popular crop – oil palm – with current foreign interest and high prices. In 2018, the then agriculture minister said that durian could fetch farmers up to nine times more than palm oil.
Durian industry insider Lim Chin Kee said there was a good chance of higher prices because of the corporation, although demand would not taper off as “durian is a luxury – those who can afford it will still be able to afford the higher prices”.
Local consumers, however, will be affected because of higher prices, and farmers will lose out too. Khor estimated farmers will see a drop in net profit of anywhere between 20 to 60 per cent, while Lim pointed out that the new deal may see lower output as “durian farming isn’t easy to handle, especially large-scale”.
Others, however, have said the deal will benefit the smallhold farmers, many of whom occupy the land without valid permits.
In a joint statement, RPDR and the state government said farmers would be allowed to continue working the land instead of being evicted.
Under the plan, farmers who accept the scheme will be given subleases or subland use rights to their existing farms, but must then sell their durians to the corporation at set prices.
Mainland China is a popular destination for the Mao Shan Wang durians, with Malaysian agricultural authorities hoping to hit a target of 50 million ringgit (US$11.7 million) in exports this year even with the coronavirus pandemic, beating last year’s numbers of 30 million ringgit. Other popular destinations include Hong Kong, Macau and Singapore.
“I’m confident and believe the demand for Musang King is extraordinary and the price there is very attractive when compared [with the price] here at 40 to 90 ringgit per kilogram. We can sell at 200 to 400 ringgit per kilogram there,” said Ishak Ismail, chairman of the Malaysian Federal Agricultural Marketing Authority.
In early July, China’s ambassador to Malaysia Bai Tian posted a Douyin (similar to TikTok) video praising Mao Shan Wang, calling it “very delicious” with a “strong and sweet aroma”.
“I hope that after the pandemic, everyone will find time to visit this beautiful country Malaysia,” he added.