[UPDATED] Govt proposes RM280mil for oil palm replanting scheme under 2027 Budget
New Straits Times (08/09/2026) - PUTRAJAYA: The government is proposing an allocation of RM280.03 million for the Smallholder Oil Palm Replanting Financing Incentive Scheme (TSPKS) 2.0 under the 2027 Budget, says Prime Minister Datuk Seri Anwar Ibrahim
He said the allocation was part of efforts to boost productivity and strengthen the resilience of the country's oil palm sector.
The allocation is among several key proposals being considered to ensure the agri-commodity sector continues driving economic growth while increasing the income of smallholders.
"The number of smallholders is large, and their problems are more pressing. Therefore, I do not think we should neglect them.
"The government's priority was not only to eradicate poverty and assist small businesses and smallholders, but also to drive economic growth," he said at the Plantation and Commodities Ministry's monthly assembly.
He said stronger economic growth would enable the government to generate higher revenue and provide greater assistance to the people.
Other proposals include RM17.05 million for the empowerment of downstream agri-commodity entrepreneurs, RM28.57 million for the Agri-Commodity Sector Disaster and Disease Control Fund and RM100 million for private smallholder plantation road projects.
The government also proposes to continue the Oil Palm Replanting Financing Programme (PTSS), which provides financing assistance to eligible smallholders facing capital constraints.
Anwar added that the government has also introduced several measures to improve the welfare of smallholders, including increasing the Rubber Production Incentive twice in his administration.
The incentive was raised from RM2.50 per kg in 2019 to RM2.70 in 2023, before being increased further to RM3 per kg in 2024.
For oil palm smallholders, the government also improved the long-standing replanting financing mechanism in 2024 by introducing a hybrid model comprising a 50 per cent grant and 50 per cent soft loan at an interest rate as low as two per cent, involving an allocation of RM100 million.
Meanwhile, the allocation for the maintenance of plantation roads nationwide was increased to RM50 million in 2026, compared with RM8 million in 2022.
As of now, some 270,000 smallholders, including small-scale oil palm, rubber, cocoa, pepper and kenaf operators, have also received RM400 a month in cash assistance under the Budi Agri-Commodity initiative.