Smallholders Seek Higher Replanting Aid as Budget 2027 Nears

Kuala Lumpur, 1 October 2026 – Malaysia’s smallholder lobby is asking the government to lift oil palm replanting assistance and widen access to farm finance in Budget 2027, arguing that ageing trees and thin cash buffers threaten future commodity output. The National Association of Smallholders Malaysia has proposed RM18,200 per hectare of replanting assistance, 30% above the RM14,000 currently available under the relevant incentive in Peninsular Malaysia. Its president, Adzmi Hassan, puts actual replanting costs at about RM17,000 to RM17,200 per hectare.

The request brings a structural production problem into the budget debate. The association says only about 2% of oil palm area is replanted annually, compared with a 4% target. A farmer who removes mature trees must finance the work and absorb a period before new palms become productive. Even when the long-term economics are attractive, the near-term interruption to cash income can delay replacement. In an export industry where yields depend on the age profile of planted area, that hesitation can compound over several years.