Environmental and Economic Feasibility Assessment on Mechanization Adoption for Stakeholders in Palm Oil Industry

Cluster Research Grant, 2024

Abstract

Malaysia palm industry remains the most significant sector supporting the Malaysia’s economy, with contributions towards development of the country’s socio-economy. The Government agencies therefore has encouraged the palm oil industry to embrace changes in adopting mechanization and technology into the field activities to replace the current conventional practices, with the aims of improved field productivities and to reduce the reliance on foreign manpower. Mechanization are important and foreseen to bringing economic benefits, including increased productivity, cost savings, time efficiency and improved quality output. Also, the environmental benefits which include reduced deforestation, less soil degradation, reduced chemicals wastage, improved water management, less greenhouse gas emissions, and effective waste management. However, assessment on real environmental and economic feasibility on mechanization adoption among the palm oil stakeholders, remains lacking. Therefore, the objective of the study is to assess the environmental and economic feasibility on mechanization adoption among the palm oil stakeholders, focussing on smallholders as well as small and medium sized estates. The benefits including investment return and cost-savings, impacts on environmental quality, the drivers and challenges, of their adoption on mechanization, will be assessed comprehensively, with empirical evidences to be the outcome of the study. The study location will be at Johor, Sabah and Sarawak states. Primary data collection will be conducted using validated and pilot tested questionnaire. Inclusion criteria will be implemented on the respondents who has adopted mechanization in their plantation activities for at least 2 years. Smallholders will be sampled using stratified random sampling method, with total respondents estimated to be 100 persons. Mixed method of qualitative and quantitative approaches will be applied, in which collected data will be analysed using descriptive and statistical analysis, including interview and correlation test for the latter. This research will address the gap on existing knowledge on the technological adoption in palm oil industry by providing the empirical evidences on the economic feasibility and environmental benefits on the palm oil stakeholders. Findings from this research are applied to the relevant government agencies and private institutions via focus-group discussions in formulating their policies and strategies, so as to assist more palm oil stakeholders to resolving the challenges on mechanization adoption thus its successful implementation. The benefits and drivers of technology implementation obtained from the study will be used for promotion programme as benchmarking indicators, best agricultural practices and references. This works allow enhanced mechanization adoption among palm oil smallholders, therefore leading towards sustainability of the palm oil industry, in the economic, social and environmental perspectives.

Project Leader

Cheah Wai Yan (Faculty of Social Sciences and Humanities, Universiti Kebangsaan Malaysia (UKM), cheahwaiyan@ukm.edu.my)