Consolidate strategy to boost smallholder income, minister says

Johari urges govt agencies to be robust in their support for smallholders


PLANTATION and Commodities Minister Datuk Seri Johari Abdul Ghani (picture) is calling for industry stakeholders to come together and uphold international sustainability standards and enhance smallholders’ income.

Addressing the issue, he stressed that smallholders, if consolidated into larger operations could double their income. 

“Entities like the Federal Land Development Authority (FELDA), Rubber Industry Smallholders Development Authority (RISDA) and Federal Land Consolidated and Rehabilitation Authority Bhd (FELCRA) must be robust in their support for smallholders,” he said during the 35th edition of the Palm & Lauric Oils Price Outlook Conference & Exhibition (POC202) today.

Before today’s event, he highlighted the challenges faced by smallholders due to issues such as poor-quality seeds and misinformation regarding fertilisers.

According to Johari, smallholders often struggle to access high-quality seeds due to a lack of guidance in the selection process.

He also noted the importance of informed seed selection and proper fertilisation for successful palm oil plantation management. 

“With correct seeds and fertilisers, they could potentially increase yields from 10 tonnes to 28 tonnes per ha,” he said.

In a bid to address the challenges faced by smallholders in the palm oil industry, he mentioned that a proposal has been put forth to consolidate independent smallholders into clusters managed similarly to medium or large estates.

This consolidation, aimed at increasing efficiency, could potentially add 250,000 ha of land to be managed effectively. 

“Additionally, concerns were raised regarding the low replanting rate of oil palm trees, with only 1.8% annually between 2014 and 2023.

“Industry experts suggest a replanting rate of 4% to 5% annually to maintain production levels,” he elaborated.

Leveraging the technical expertise of major industry players and the Malaysian Palm Oil Board (MPOB) could facilitate timely replanting and maximise yields.

“Adoption of good management practices from large-scale plantations could potentially increase fresh fruit bunch (FFB) yield by two metric tonnes per ha, resulting in an additional 600,000 tonnes of crude palm oil (CPO) production annually, valued at approximately RM2.4 billion, without the need for further land use change,” he disclosed.

Further addressing challenges in the palm oil industry, Johari revealed that out of 5.7 million ha, 1.5 million are managed by smallholders, posing replanting difficulties due to limited government funds. 

With only RM400 million in the budget, covering 5,500ha, a consolidation strategy is proposed, aiming to merge small plots into 8,000ha to 10,000ha clusters. 

Despite challenges, such consolidation could revitalise production, benefitting both smallholders and the industry as a whole, Johari affirmed.

This initiative seeks to leverage the successes of past government programmes, empowering smallholders and securing the industry’s future.

Johari said moving forward, the ministry is fully committed to revitalising the Malaysian Palm Oil Certification Council (MPOCC), which serves as the governing body for MSPO certification.

“To ensure its autonomy, we are undertaking a comprehensive review of the board’s composition, management and strategy to achieve international recognition,” he said.

Therefore, he announced the renaming of the Malaysian Palm Oil Council (MPOC) to Malaysia Sustainable Palm Oil Certification (MSPO).

This rebranding initiative is intended to bring clarity and distinction among the key organisations within the sector. 

Specifically, MPOB will remain dedicated to research and development, regulation and licensing, while MPOCC will continue its responsibility for promotion and marketing. 

“Meanwhile, MSPO will focus on maintaining certification standards. This restructuring is deemed essential to prevent any confusion between MPOC and MPOCC in the future,” he added.

Addressing a key concern in the industry, the minister highlighted the reliance on guest workers, particularly harvesters, in palm oil plantations. 

He emphasised the need to attract locals to harvesting by specialising in tasks and introducing mechanisation.

A technical vocational education and training (TVET) initiative has been launched to train local harvesters, with the government closely monitoring progress. 

Despite efforts to mechanise harvesting, viable solutions remain elusive. The minister pledged personal attention to address labour shortages.

POC2024 which ends tomorrow aims to gather over 2,000 delegates from more than 50 countries, including key industry leaders, experts, and decision-makers, to navigate the complexities and opportunities in the sector, with a strong focus on sustainability.