Kuala lumpur: The government is studying ways to increase the income of smallholders and ensure the agri-commodity sector continues to drive the country's economic growth, said Prime Minister Datuk Seri Anwar Ibrahim. Anwar stated that efforts will be made to strengthen the agri-commodity sector through enhanced productivity, technological advancement, and the development of a resilient value chain.
According to BERNAMA News Agency, the government is prioritizing poverty eradication and supporting small businesses and traders. Anwar highlighted the increasing challenges faced by small traders, ranging from stalls to restaurants. Speaking at the Plantation and Commodities Ministry's (KPK) monthly assembly, he emphasized the need for comprehensive support.
The prime minister detailed several initiatives aimed at empowering agri-commodity entrepreneurs, including a RM17.05 million allocation for downstream activities, a RM28.57 million fund for disaster and disease control, a RM100 million Smallholder Farm Road Programme, and the Smallholder Oil Palm Replanting Financing Incentive Scheme (TSKPS) 2.0 with an allocation of RM280.03 million.
Anwar pointed out that the replanting programme is expected to improve productivity and income for smallholders over the long term. The smallholder road projects are intended to boost productivity by providing essential infrastructure for farming areas.
Additionally, Anwar, who also serves as the finance minister, addressed the needs of rubber smallholders by announcing an increase in the Rubber Production Incentive (RPI). The RPI rate rose from RM2.50 per kilogram in 2019 to RM3.00 per kilogram in 2024 under the MADANI administration.
For the palm oil sector, the government has revised the replanting financing approach to a hybrid model starting in 2024, consisting of 50 per cent grants and 50 per cent easy loans with an interest rate as low as two per cent, involving an allocation of RM100 million. Furthermore, the allocation for maintaining plantation roads nationwide will increase to RM50 million in 2026, up from RM8 million in 2022.
As of September 2026, approximately 270,000 smallholders, including those involved in palm oil, rubber, cocoa, pepper, and kenaf farming, have benefited from a monthly cash assistance of RM400 under the BUDI Agri-Commodities programme.