Analysing Income and Business Potentials among the Smallholders Communities
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Cluster Research Grant, 2014
Abstract
It is often argued that the economic benefits of oil palm plantations outweigh the socio-economic costs of converting lands to cultivate more productive and commercial crops. However, research suggests that the role of oil palm plantations in reducing rural poverty may be overstated. There should be a far greater reduced rate of poverty in Sabah, Sarawak and certain states in Peninsular Malaysia (Malaysia, 2010). Information from research conducted by the World Bank demonstrated that under some conditions investment in the palm oil sector is unlikely to reduce and may increase poverty (Beth, 2011). Therefore, though palm oil has enabled to reduce poverty in Malaysia, the impacts are not evenly felt especially among independent smallholders. Palm oil authorities namely MPOB, FELDA, FELCRA and other state-level agencies have invested significantly in rural development, smallholder cultivation and agricultural productivity. While smallholders in the FELDA’s model is able to gain basic oil palm production/ crops income plus other investment income, independent smallholders are still relying solely on basic oil palm production/ crops income. Coincidently, round 35 per cent of all palm oil cultivation in Malaysia is done by small farmers and families on small scale plantations. Hence, this study will explore potential business models and later set up actual business model which be implemented to measure its ability towards improving smallholders’ household income and at the same time reducing their poverty level.
Project Leader
