Budget 2027: NASH Calls For Stronger Oil Palm Replanting, Financing Support
By Danni Haizal Danial Donald
KUALA LUMPUR, Oct 1 (Bernama) -- The National Association of Smallholders Malaysia (NASH) has called on the government to strengthen replanting programmes, enhance smallholder productivity and expand access to financing for the palm oil and rubber sectors under Budget 2027.
Its president, Adzmi Hassan, said NASH proposes that the government increase the oil palm replanting assistance rate to RM18,200 per hectare (ha), a 30 per cent increase, with a simplified payment mechanism to ease initial cash-flow constraints.
“Cost of replanting can now reach around RM17,000 to RM17,200 per ha, while the existing Smallholder Oil Palm Replanting Financing Incentive Scheme assistance is RM14,000 per ha (Peninsular Malaysia).
“At the same time, the reported oil palm replanting rate of around 2 per cent per year remains below the 4 per cent target. Therefore, we need to view (increase) replanting as an investment in the country's future production capacity, rather than simply as assistance to individual smallholders,” he told Bernama.
Adzmi said the association suggests establishing a national smallholders development fund (TPPKN) as a long-term development fund, rather than merely providing one-off assistance.
He said the proposal includes initial revolving capital, a one-to-one matching grant approach, a savings mechanism for smallholders during periods of high commodity prices, and financing for productivity improvements, technology, infrastructure and high-value crops.
“An important component of TPPKN is the smallholders' land bank, where (underutilised) land can be voluntarily consolidated and professionally managed, without affecting the original ownership rights. This can be applied to oil palm, rubber and other commodity crops.
“The land bank can also serve as a pathway to attract the younger generation into agriculture in a more structured manner. Landowners, young people, graduates, investors and agricultural operators can be connected within an integrated ecosystem,” he said.
Enhance rubber sector
For the rubber sector, NASH proposes a “harga getah bermaruah” mechanism that takes into account the actual production costs incurred by smallholders, said Adzmi.
“We propose a floor price of around RM4.50 per kilogramme (kg), based on an estimated natural rubber (NR) production cost of around RM3.65 per kg,” he said.
According to the Department of Statistics Malaysia (DOSM), smallholders accounted for 87.6 per cent of Malaysia's natural rubber production in July 2026.
On Sept 29, Standard Malaysian Rubber 20 (SMR 20) traded at 1,010.5 sen per kg, while bulk latex traded at 737.5 sen per kg.
Adzmi also emphasised that the government should reevaluate its trade policy and the rubber value chain to ensure that smallholders receive a fairer share of the value generated by this commodity.
“The issue of access to productivity-enhancing inputs such as ethephon should also be assessed practically, so that regulation does not hinder efforts to increase smallholder productivity,” said Adzmi.
BUDI initiative and National Fertiliser Act
Adzmi said NASH believes government assistance should be made more inclusive, particularly programmes that impose a minimum landholding requirement, such as BUDI Agrikomoditi.
“We propose that the 0.5-ha minimum requirement be reviewed or removed to ensure smallholders with smaller landholdings are not excluded from assistance solely due to the size of their farms,” he said.
NASH also urges the National Fertiliser Act to be expedited for implementation, to ensure that fertiliser content, quality, labelling, safety and effectiveness are regulated more clearly.
“The Act has gone through a lengthy process and in our view, the time has come for it to be implemented. The quality of agricultural inputs must be guaranteed, and fertiliser is one of the largest production costs for smallholders and is critical to yield,” he said.
Prime Minister Datuk Seri Anwar Ibrahim, who is also Finance Minister, is scheduled to table Budget 2027 on Oct 9.
-- BERNAMA