Oil Palm Industry Economic Journal Vol. 8 (2) September 2008 p. 17-27

The Malaysian Palm Oil Supply Chain: The Role of the Independent Smallholders

Ayat K Ab Rahman, Ramli Abdullah, Faizah Mohd Shariff and Mohd Arif Simeh
Received:    Accepted:    Available Online:


The Malaysian palm oil industry is made up of interrelated sectors that produce various palm products for their end-users. To ensure an efficient supply chain, all sectors should operate efficiently; this includes the independent smallholders. An efficient production system by the smallholders is deemed necessary in producing quality fresh fruit bunches (FFB) which can then produce quality palm oil for meeting the rising global demand. Inefficiencies can affect the whole supply chain. This article investigates the efficiency level of this sector and the structural changes that it has undergone. It was found that there is plenty of room for improvement among independent smallholders to increase their FFB yield and income so that their future can be sustained.

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