The plantation and commodities ministry will focus on helping smallholders to replant oil palm trees that are over 25 years old to ensure a steady supply of produce and prevent a drop in export revenue.
The minister, Johari Ghani, said oil palm trees produce less fruit after approximately 25 years.
“If we don’t replant, output will drop and subsequently our exports, which in turn will impact the country’s revenue,” he told reporters after the tabling of the 2026 budget.
Earlier this evening, Prime Minister Anwar Ibrahim said RM120 million would be set aside to “protect” small-time farmers including absorbing part of the cost to replace aged trees.
About 27% of the oil palm plantations are owned by small-time farmers, Johari said.
He said the oil palm sector remains the country’s main export, with an annual export value of between RM115 billion and RM120 billion.
Unlike the semiconductor industry which relied heavily on imports, the revenue earned from oil palm is fully retained by the country, he said.
“This is why it is vital to ensure that the replanting exercise goes smoothly.”
Johari said one of the main challenges was that small-time farmers could not afford to bear the high cost of replanting.
“Many cannot even take a loan to carry it out, which is why the ministry will help them so they can replace these aged trees,” he said.
He admitted that the existing aid was insufficient, but the government is committed to revising the rate.
