September 28, 2022

Keeping smallholders afloat

2 min read

THE Tanjung Piai by-election has come and gone but Felda settlers remain the poorer. When Felda Global Ventures (FGV) was about to be floated on the main market of Bursa Malaysia, it was well known that more than 50% of the oil palm trees were more than 20 years old.

At about the time of the float, several commentators had, in not so many words, painted a picture that Malaysia (or Felda) had become complacent.

To revitalise the fortunes of the smallholders and FGV, replanting on a large scale has to be carried out.

In 2012, FGV had reserves to replant about 5% of its holdings annually for only four years. The smallholder is in a worse predicament if no grants are available. Grants that are available are insufficient to keep smallholders above the poverty line.

The oil palm trees begin to fruit from 30 to 36 months after planting. Peak yields are between eight and 20 years.

On average, Felda smallholders cultivate 3.9 hectares. The yield of fresh fruit bunches (FFB) is 16 to 18 tonnes/ha.

At the low end, according to the Malaysian Palm Oil Board (MPOB), these FFB fetch about RM410/tonne.

Using this as a basis, the income of a smallholder over a cycle of 14 years can be projected (see chart).

The replanting grant for smallholdings less than 16 hectares (40 acres) amounts to a lump sum of RM6,000 and RM500 per household over two years. It can be seen from the graphic that this is insufficient.

The income should be above the projected values as new planting materials will generate increased yields. In the initial period with shorter trees, harvesting will require less labour.

To make replanting attractive, the smallholders must be able to generate additional income from other farm-related and unrelated activities.

There are several cash options such as cultivating plantains (member of the banana family, but they are starchier and lower in sugar) for chips and raising geese for meat and goat for (chevon) meat.

Geese for the table would be ready after 12 weeks. Fertilised eggs can be bought from the United States and other countries.

A whole roast goose in Kuala Lumpur costs about RM200. Frozen goat meat (chevon) from Australia costs RM32 per kg.

Plantians mature in nine to 12 months and can be made into chips.

These various income streams can take over three years to develop into a viable means of supplementing smallholders’ income, and when the replanting and maturity have come full cycle, perhaps the smallholders can see income above RM3,000 per month.

It’s time to move as any viable programme needs at least one year to plan and implement.


Kuala Lumpur