KUALA LUMPUR (March 30): Plantations and Commodities Minister Datuk Seri Johari Abdul Ghani said early this month that he would like to consolidate at least 30% of the country’s independent smallholders, and form clusters of around 8,000 to 10,000 hectares (ha) in order to increase Malaysia’s crude palm oil (CPO) production.

His call has been well received, but many questions have been asked. Who will drive and fund the initiative? Will independent smallholders' land ownership be affected?

Johari in written responses to The Edge says the ministry through its agencies will supervise and coordinate these clusters, without taking over any land from the individual landowners.

“The objective of this initiative is to increase the yield of independent smallholders that ultimately will increase CPO production of the country, which is currently on a declining trend,” he says.

The country’s smallholders manage 27% or 1.5 million ha out of the 5.7 million ha, and many of them, being small with plots of land measuring only four hectares each, have difficulties raising their yield.

Smallholders are defined as farmers owning or leasing an area of land measuring less than 40.6 ha or about 100 acres. There are two categories of smallholders — those organised under schemes such as the Federal Land Development Authority (Felda) and Federal Land Consolidation and Rehabilitation Authority (Felcra), and those on their own categorised as independent smallholders who work on the land themselves or employ workers.

There is no publicly available data on independent smallholders’ fresh fruit bunch or oil yield per hectare, but given their small land area, they have difficulty in scaling their operations and improve on efficiency and yield. What’s more, the lack of discipline in replanting among smallholders — organised and independent — have often been cited as one of the contributing factors to the stagnant national yield.  

What do independent smallholders think of the consolidation idea?

Also, what is the outlook for CPO prices, given the recent hot and dry weather?

Find out more in the latest issue of The Edge Malaysia weekly at the nearest news stand.

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