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The Malaysian government is aiming to raise fresh fruit bunch (FFB) yields per hectare among smallholder palm oil farmers by at least 40%, with the goal of increasing palm oil output without the need to expand cultivated land. This would translate into an additional 5 to 10 tonnes per hectare. Smallholders currently account for about a quarter of Malaysia's total palm oil planted area.
Malaysia's Minister of Agriculture and Commodities, Datuk Seri Johari Abdul Ghani, said smallholders' current yields range between 8 and 12 tonnes per hectare. Large plantation companies, by contrast, achieve yields of around 28 to 30 tonnes per hectare, with an average of between 18 and 19 tonnes per hectare.
He added that Malaysia's total palm oil planted area stands at 5.7 million hectares, of which 4.2 million hectares are managed by large plantations. The remaining 1.5 million hectares are managed by smallholders, whether organised or independent. "If the smallholders managing this area can raise their yields by an additional 5 to 10 tonnes, this would increase crude palm oil output per hectare without the need to expand the land area," he said.
Johari made these remarks during the signing of a memorandum of cooperation between Felda Holdings and the Malaysian Palm Oil Board (MPOB) aimed at strengthening the palm oil industry.
Johari also said the government supports Indonesia's use of palm oil for biofuel production. "We are grateful to Indonesia because it produces 40-48 million tonnes and uses about 25% of that for biofuel production. This in itself supports the industry. Imagine if they did not use biofuel — that volume would flow into the global market and put pressure on prices," he said.
"We encourage Indonesia to keep using palm oil as part of its biofuel mix, as they have reached B40, while we are only at B10." The Indonesian government has pledged to raise the mandatory blending rate of palm oil-based fuel in biodiesel to 40% from 1 January, up from the current 35%.
The memorandum of cooperation between Felda and MPOB focuses on three key pillars driving this transformation: empowering smallholders, ensuring full compliance with sustainability standards, and revolutionising the palm oil industry by adopting advanced technologies that enhance productivity and efficiency.
The memorandum was signed by Felda chairman Tan Sri Rastam Mohd Isa, MPOB chairman Datuk Mohd Helmy Othman Basha, Felda Group chief executive officer Fakhrunniam Othman, and MPOB director-general Datuk Dr Ahmad Parveez Ghulam Kadir.
Under the cooperation, Felda, through one of its subsidiaries, will help MPOB enhance the effectiveness and ease of use of existing platforms such as GeoPALM and the Smallholder Integrated Management System (SIMS).
This will be achieved by integrating advanced technologies including geographic mapping, data verification, blockchain-based supply chain traceability, and tools for data analysis and decision-making support.
The cooperation also focuses on empowering smallholders to participate actively in sustainable palm oil production. Felda and MPOB aim to raise awareness and support smallholders in complying with Malaysian Sustainable Palm Oil (MSPO) standards and the requirements of the EU Deforestation Regulation, thereby enhancing their competitiveness and opening up premium palm oil markets to them.
In addition, the partnership will launch the "Kebun Angkat" initiative, a programme designed to provide technical assistance and guidance to a select group of smallholders on good agricultural practices.
Rastam said: "This is an important step towards building a sustainable and transparent palm oil industry in Malaysia. In line with Felda's sustainability framework, we are strongly committed to improving the livelihoods of smallholders, who form the backbone of our country's palm oil industry."
"Through this collaboration with MPOB, we are not only developing traceability systems that meet global standards, but also equipping smallholders with the tools and knowledge needed to succeed in an increasingly competitive market. Together, we aim to build a more inclusive, sustainable and resilient palm oil sector."
Source: The Business Times