KUALA LUMPUR (March 5): The Ministry of Plantation and Commodities is searching for a feasible model that can consolidate independent smallholders to increase palm oil yield, according to its minister Datuk Seri Johari Abdul Ghani.
Johari, in his speech at the 35th Annual Palm & Lauric Oils Price Outlook Conference & Exhibition (POC2024) on Tuesday, mooted the consolidation of 214,680 independent smallholders into clusters spanning 8,000 to 10,000 hectares of oil palm estates, to be managed by medium or large estates.
“As we all know, out of the 5.7 million hectares of oil palm planted area, 27% (1.5 million hectares) are managed on a small scale via smallholders. On average, these smallholders manage plots of land of around four hectares. Indeed, many smallholders are facing difficulties in increasing their yield.
“If we are able to consolidate even 30% of independent smallholders, we would have an additional 250,000 hectares of land to be managed efficiently,” Johari said.
“These clusters would then be managed just like a medium or large estate by a dedicated team. We are looking at how big companies can help consolidate this. I know this is not going to be easy because it involves land,” the minister explained.
Additionally, Johari suggested a more pragmatic way to guarantee timely replanting by smallholders for consistent maximum yields, would be to utilise the technical expertise of major industry players and the Malaysian Palm Oil Board. This would encompass guidance on seeds, clones, fertilisers, as well as pest and disease management.
“Surely, achieving a larger scale is crucial to reduce costs per unit and increase productivity. If all smallholders can adopt good management practices of large scale plantations, fresh fruit bunches’ yield can easily increase by two metric tonnes per hectare,” he said.
This in turn will increase the country’s crude palm oil production by an additional 600,000 tonnes a year, which is valued at around RM2.4 billion at the current market price, without any additional land use change, he added.
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