Malaysia Now and Then: Palm oil smallholders still left behind?


Abang Man, 34, and father of two, works as an independent palm oil smallholder. © Team Ceritalah

Abang Man, 34, and father of two, works as an independent palm oil smallholder. © Team Ceritalah

WALKING up to Abang Man’s oil palm plantation on the outskirts of Kampung Jerlun, Kuala Kangsar, it’s clear the roads – they’re narrow and treacherous – are a major problem for him.

One wrong move and even a light, nimble car – say a Perodua – could careen off into the dense bushes by the side of the lane; what more a lorry packed to the brim with oil palm bunches.

This means that transporting harvests to the wholesaler’s warehouse is a tricky task for the 34-year old independent smallholder.

Indeed, as Abang Man, a father of two, told Team Ceritalah, the cost of maintaining these roads is borne by the farmers.

“The machine needed to fix the road has to be rented for five to six days. Previously, the rental cost was RM380 per day. Now it has increased to RM400.”

This adds up to RM2,000 – a cost he feels the government should be bearing.

The cost of maintaining his farm has increased and the returns have diminished – Abang Man feels the pinch from both sides. © Team Ceritalah

Moreover, according to Abang Man, middlemen are sucking smallholder profits. Licences are required in order to sell fruit directly to the mills.

But in order to qualify for such a licence, an applicant apparently needs to own some 400 acres of oil palm. This is to ensure a consistent harvest, but that’s something smallholders find difficult to guarantee.

When asked about the threatened European boycott of palm oil, his response is interesting. He doesn’t blame the Europeans. Instead, he criticises the government’s proposed implementation of Malaysian Sustainable Palm Oil (MSPO) standards.

“There is no way a smallholder can hope to adhere to such constraints. Each fruit has to be checked individually. By the end of it, a large portion of the fruit is rejected and cannot be sold to wholesalers.”

However, it is everyday farm costs that have hit him hardest.

Abang Man feels that smallholders have no way to adjust to sustainable palm oil standards. © Team Ceritalah

A bag of fertiliser (25kg) now costs RM46, up from RM39 a year ago, and one acre requires 10 bags of fertiliser which must be applied four times a year. This amounts to a yearly expenditure of RM16,560 on fertiliser alone for his nine acres.

The cost of herbicide has also increased by around 13% to RM11 per litre. He uses 144 litres of herbicide twice a year, amounting to RM3,168.

Abang Man employs foreign workers to apply the fertiliser and herbicides, costing RM900 and RM3,800 each time respectively.

On average, Abang Man spends around RM2,600 on farm maintenance every month.

It’s costs like these that are putting Abang Man in a tight spot financially. With the price of fresh fruit bunches having dropped from RM420 per tonne to RM315 per tonne, he feels the pinch from both sides: a drop in income and a rise in costs.

Abang Man … ‘If I were to rely solely on palm oil, my family would not survive.’  

He previously had to allocate RM2,500 for monthly household expenditure. Now, this has risen to RM2,700. At current prices, he takes home a maximum of RM4,000 per month.

RM4,000 - RM2,700 - RM2,600 = a RM1,300 deficit. This does not include the road maintenance.

He says a minimum price of RM350 per tonne is liveable, but at this level, profits will only amount to RM1,000 a month.

To make ends meet, Abang Man works a second job as a palm fruit lorry driver.

“If I were to rely solely on palm oil, my family will not survive.”

When asked what the government should do, he chuckles.

“We should get subsidies like all the other farmers and minimum prices should be implemented. They need to protect the rights of the farmers.”

“I don’t just feel the burden anymore. I live the burden.”

The writer also has a weekly column in The Star; ‘Ceritalah’ appears every Sunday. In this series on online exclusives, Karim and Team Ceritalah meet ordinary Malaysians to ask them how things have changed over the past 12 months.