Smallholders - Malaysia

In Malaysia, smallholders provide around 23% of our supply, and certification presents challenges which we are working to address. We welcome the Malaysian government’s mandatory certification requirement for the sustainable production of palm oil through the Malaysian Sustainable Palm Oil (MSPO) Certification Scheme. The scheme is targeted at oil palm plantations, independent and organised smallholdings, and palm oil processing facilities.

Malaysian smallholders face numerous challenges that impede certification. They are harvesting palms that produce less fruit and oil and live on small incomes, leaving them open to exploitation and being unable to pay for the improvements needed to carry out the certification process. They often do not even have the land deeds that are a basic requirement of the certification process or lack the license to trade Fresh Fruit Bunches (FFB).

To assist Malaysian smallholders with certification, we initiated a small-scale pilot project with just 305 smallholders in the Northern Region. We brought together partners to help tackle the barriers that smallholders face when trying to get certified, most notably, capital for replanting and assistance with registering land titles.

We brought together a strong set of partners to support the effort, namely:
  • Integration, Research and Expansion Division (IRED), Malaysia Palm Oil Board (MPOB)
  • Licensing and Enforcement Division, Technology Advisory and Transfer Services (TUNAS)
  • Ministry of Energy, Science, Technology, Environment and Climate Change
  • Department of Environment
  • Agrobank (a Malaysian agriculture financial institution)
Sime Darby Plantation (SDP) teams went out to the smallholder collection points to provide practical support, including assisting them with the registration process required to achieve certification. This involved a method to verify land titles, licensing documents, and obtaining confirmation of location coordinates as well as estate boundaries or shapefiles to establish a formal record of the smallholder’s operations.

Following this intervention, our Sungai Dingin Oil Mill is now 88% traceable to plantation and sources from 550 registered smallholders. Our pilot project and partnerships have helped us identify models that we will now use to replicate our efforts across more of our smallholder supply base in Malaysia.

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