RM63.5 mln allocated to strengthen palm oil industry, support smallholders, says minister
24/09/2026 (The Borneo Post), Kota Kinabalu - The government has allocated RM63.5 million under Budget 2026 to strengthen the palm oil market, promote sustainable certification among smallholders and address anti-palm oil campaigns internationally.
Plantation and Commodities Minister Datuk Seri Dr Noraini Ahmad said the allocation was important to keep Malaysia’s palm oil industry competitive while ensuring smallholders directly benefited from its growth.
She said the government’s focus extended beyond increasing production and export value to improving plantation yields, smallholder incomes and the well-being of their families.
“True success is achieved when the progress of this industry also increases plantation yields, strengthens incomes and secures the future of smallholders,” she said when officiating at the 2026 National Oil Palm Smallholders Conference (PKPKS) here.
The two-day conference brought together nearly 800 participants from across the country to discuss developments in the palm oil industry, technology, assistance and programmes provided by the Ministry of Plantation and Commodities (KPK) and the Malaysian Palm Oil Board (MPOB).
Noraini said Sabah was chosen to host PKPKS 2026 in recognition of its position as Malaysia’s second-largest crude palm oil (CPO) producer in 2025, contributing nearly 24 per cent of national production.
She said smallholders managed more than 15 per cent of the country’s total oil palm planted area and played an important role in maintaining the industry’s supply chain.
She said the government was continuing to strengthen assistance in areas including replanting, training, technology, digitalisation and market access through the National Agricommodity Policy 2021-2030 (DAKN 2030).
Noraini also highlighted the need to address ageing oil palm trees, as tree age has a direct impact on yields and smallholder incomes.
Through the Oil Palm Smallholders Replanting Financing Incentive Scheme (TSPKS), she said smallholders were assisted in replacing ageing trees with high-quality planting materials to improve plantation productivity and returns.
On sustainability, Noraini said international market requirements were increasingly focused not only on the products themselves but also on sustainability, transparency and traceability.
She said Malaysian Sustainable Palm Oil (MSPO) certification was an important instrument in strengthening the industry’s sustainability credentials and improving access to international markets.
Nearly 253,000 independent smallholders nationwide have obtained MSPO certification, involving 162 Sustainable Palm Oil Clusters (SPOCs) covering more than 723,000 hectares.
In Sabah, 30,384 smallholders have obtained MSPO certification, covering more than 188,000 hectares, or 97.17 per cent of the total oil palm planted area owned by independent smallholders in the state, she said.
The government is also strengthening the Malaysian Commodity Traceability System (SKKM), including through digital technologies such as the Sawit Intelligent Management System (SIMS) and GeoSAWIT, to improve transparency across the palm oil supply chain.
Meanwhile, MPOB director-general Datuk Badrul Hisham Mohd said the agency’s success should not be measured solely by the amount of research and technology it produced, but by how effectively those innovations were adopted by smallholders.
He said technologies developed by MPOB must translate into higher yields and productivity, lower costs and practical solutions to problems faced by smallholders.
“Technology only creates value when it is used, understood and genuinely helps smallholders on the ground in a cost-effective manner,” he said.
Badrul said MPOB would continue bringing practical solutions to the field, covering areas such as quality planting materials, good agricultural practices, mechanisation, digital technology and artificial intelligence.
He said MPOB had also developed the GeoSAWIT portal as a national geospatial platform to support sustainability and traceability in the palm oil industry.
Badrul said MPOB had introduced the Oil Palm Agricommodity Plan 2030 (PAUS 2030) as a framework for developing a more productive, low-carbon and higher-value palm oil industry that delivers greater benefits to Malaysians.
He said its implementation would be driven by three main agendas — institutional reform, industry leadership and economic generation — with productivity, innovation and industry development ultimately translated into higher incomes and economic value.
Badrul stressed that PAUS 2030 was not solely an MPOB agenda but had to generate tangible benefits for the industry and the people, particularly smallholders.
He also said MPOB was strengthening smallholder participation in SPOCs through the support of its Tunjuk Ajar dan Nasihat Sawit (TUNAS) officers.
As of June 2026, 192 SPOCs had obtained MSPO certification, involving 197,933 independent smallholders nationwide, he said.
Badrul said smallholders could further strengthen their position through group cooperation and cooperatives, including the Sustainable Oil Palm Growers’ Cooperative (KPSM).
He said selling fresh fruit bunches through cooperatives could strengthen smallholders’ position in the value chain and create opportunities for better returns.
He also stressed the importance of strengthening the role of TUNAS officers as the link between MPOB and smallholders.
“TUNAS must be MPOB’s eyes to see the problems, MPOB’s ears to hear the voices of smallholders and MPOB’s hands to help resolve their problems,” he said.
The conference also saw the launch of the Oil Palm Nursery Good Practice Code System (e-CoPN), along with the publication of standard operating procedures for pollinating weevil censuses, fruit formation assessment and Hatch and Carry techniques.
MPOB and FELDA also strengthened their cooperation through a memorandum of understanding (MoU) on research into climate change, water resource management and biodiversity.
The programme also featured the presentation of the Malaysian Palm Oil Industry Awards in the Independent and Organised Smallholders category, as well as the Best Sustainable Oil Palm Growers’ Cooperative (KPSM) category.