Cost of Production in the Malaysian Oil Palm Nursery Sector

One of the objectives of establishing an oil palm nursery is to produce high quality oil palm seedlings. Planting such materials can lead to high productivity in the palms. At present, an oil palm nursery operator adopts either the single or double stage technique to produce seedlings before transplanting them into the field, the decision of which technique to use being a matter of the operator’s choice. The cost of producing seedlings by these two techniques also differs. This study found that nurseries that practise the double stage technique (double stage nurseries) produce seedlings at a lower cost as compared to seedlings produced by nurseries which practise the single stage (single stage nurseries). The Independent Sample t-Test shows that there is sufficient evidence to conclude that the average cost for seedlings produced from double stage nurseries is lower than from single stage nurseries. Besides that, based on a cost-benefit analysis, it is further noted that double stage nurseries provide better returns than single stage nurseries.