Kuala lumpur: Permodalan Nasional Bhd’s (PNB) research division, PNB Research Institute Sdn Bhd (PNBRI), has issued a report outlining strategic policy recommendations aimed at enhancing the future of independent smallholders within Malaysia’s oil palm sector.
According to BERNAMA News Agency, the report titled ‘The Realities and Prospects of Sustainability among Oil Palm Smallholders in Malaysia’ is the result of nearly two years of diligent research, extensive engagement with stakeholders, and fieldwork conducted across the nation.
PNB group chairman Raja Tan Sri Arshad Raja Tun Uda emphasized the report’s goal to elevate the voices of independent smallholders while providing a balanced, evidence-driven analysis of the opportunities and challenges in making Malaysia’s palm oil supply chain more sustainable and profitable for these smallholders. The report suggests several recommendations to boost productivity and improve the livelihoods of over 210,000 independent smallholders.
Raja Arshad highlighted that the findings align with PNB Group’s initiatives to promote automation and smart farming in the palm oil sector under the government’s GEAR-uP initiative and the 13th Malaysia Plan’s focus on enhancing local sustainability certification standards. These efforts reflect broader national aspirations under the MADANI Economy and the 13th Malaysia Plan to transform national development through technology, socioeconomic upliftment, and sustainable growth.
Despite only cultivating around 15 percent of Malaysia’s oil palm planted area, independent smallholders support numerous families nationwide. However, they face challenges such as rising input costs, ageing trees, and sustainability compliance pressures, which could hinder their financial stability.
The report sets forth 15 recommendations to empower smallholders by strengthening their bargaining power and market access, balancing environmental, economic, and social priorities. Key proposals include preparing the next generation of smallholders through the ‘Agroproneur Sawit Muda TVET programme’ and facilitating bulk purchasing of input materials to reduce costs.
Additionally, the report advises enhancing smallholders’ bargaining power by improving regulations, mandating transparency, and diversifying farming support. Expediting the MSPO certification process is also recommended to reduce reliance on third-party collection centers, with full compliance expected by July 2025. The importance of adopting good agricultural practices, such as record-keeping, is also emphasized.
The study integrates insights from over 30 focus group discussions with 250 respondents, including independent smallholders and extension officers across 11 states, supplemented by structured interviews with 425 smallholders. The complete report is available for download at