Vol. 19 (2) September 2019 – OPIEJ

Financial Performance of Certified Palm Oil Companies in Malaysia

mpob_admin — Thu, 12 Sep 2019 07:02:34 +0000

Little is known about how standards and certification enhance the profitability of adopters. This study is intended to explore the financial performance of Malaysian palm oil companies with respect to their Roundtable on Sustainable Palm Oil (RSPO) certification, as the Malaysian Sustainable Palm Oil (MSPO) standard is relatively new. Based on 2000-2016 panel data, the return on invested capital (ROIC) metric was employed to compare the profitability of RSPO-certified and non-certified palm oil companies listed in the Kuala Lumpur Stock Exchange. We found that RSPO-certified companies consistently outperform a conventional sample. This superiority was consistent even in the face of garadual decline in the mean. Reasons for the superior performance may include improved operating and capital efficiency associated with the various advantageous effects of the certification on productivity, operation, management, and business turnover. Our findings are a critical adjunct towards improving the advocacy of sustainability standards. The findings will be pivotal as a strategy to generate wider acceptance among plantation companies (nucleus), which are the window to prevalent adoption among smallholders (plasma). A better understanding of enhanced financial performance and its longevity (if any) is necessary for agribusinesses to succeed with agricultural transformation.

Keywords: Standard certification, financial performance, return on invested capital, Roundtable on Sustainable Palm Oil.

Factors Affecting Yield Achieved by Participants of the Quality Oil Palm Seedlings Assistance Scheme in Sabah and Sarawak

mpob_admin — Thu, 12 Sep 2019 06:57:40 +0000

The Malaysian Government has set up various incentives to help oil palm smallholders, including the Quality Oil Palm Seedlings Assistance Scheme, which was implemented in the 9th Malaysian Plan. The scheme was initially implemented in Sabah and Sarawak in 2005, and then it was introduced in Peninsular Malaysia in 2007. It was hoped that the scheme will improve smallholder productivity through yield improvement by planting good quality oil palm seedlings. This study was, therefore, conducted in Sabah and Sarawak as both states account for half the oil palm cultivated in Malaysia. The main objectives of the study were to determine the current yields achieved by participants in the scheme, and the factors affecting their fresh fruit bunch (FFB) yield. This is a quantitative study which applied the questionnaire approach to gather data from the interest group. The data were analysed by using SPSS 21, and a descriptive study, cross tabulation analysis, test of differences and linear regression analysis were employed. About 70% of the respondents had a farm size less than 4.00 hectares. Of these, 42.1% obtained a FFB yield of less than 22.4 t ha-1 yr-1, while 38.6% achieved yields between 22.5 and 28.9 t ha-1 yr-1. Eight factors were evaluated, but the regression analysis identified only four factors which significantly influenced the production of FFB by the recipients of the quality oil palm seedlings. These factors were management of fertilisers, farm size, harvesting, and services provided by the TUNAS officers.

Keywords: quality oil palm seedlings, assistance scheme, independent oil
palm smallholders, factors affecting yield.

Factors that Influence the Perception of Women Entrepreneurs in Felda towards Downstream Activities

mpob_admin — Thu, 12 Sep 2019 06:48:06 +0000

This paper examines the factors influencing the perception of women entrepreneurs in Felda on downstream activities. The perception of women entrepreneurs at ten Felda land schemes was evaluated using a questionnaire. The data were then analysed by a structural equation model (SEM). To date, women’s involvement in entrepreneurship is still low, and the government seeks to produce more women entrepreneurs by implementing various programmes to ensure success. To do this, the perception of women towards downstream activities needs to be determined prior to starting a business. This perception must be reinforced as it affects the entrepreneur’s desire to start a business. The paper concludes that youth development is the main factor that influences women entrepreneurs’ perception towards downstream activities, and subsequently influences the decision to start a business. Based on the results, several proposals need to be implemented, namely, encouragement and guidance to young entrepreneurs, creation of more job opportunities, employment of new technology in business operations, and provision of courses or training for potential entrepreneurs, in order to gain good perception from the women.

Keywords: perception, downstream activities, women entrepreneurs, Felda, Structural Equation Modelling (SEM).

Cost of Production in the Malaysian Oil Palm Nursery Sector

mpob_admin — Thu, 12 Sep 2019 06:40:30 +0000

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.

Economic Analysis of Palm Oil Demand in Selected Major Importing Countries

mpob_admin — Thu, 12 Sep 2019 06:34:06 +0000

This study attempts to examine factors influencing the demand for palm oil in selected major markets (India, EU, China, Pakistan and Nigeria). The study employed the Autoregressive Distributed Lag (ARDL) method on data collected for the period 1980 to 2017. The bound test indicates that there are long-run relationships between the studied variables. The empirical results show that Gross Domestic Product (GDP), palm oil price, and soyabean oil price, production and crushing capacity are significant determinants of palm oil demand.

Keywords: palm oil importers, ARDL, error correction models.

Assessment on Knowledge on Fertiliser Management among Independent Smallholders in Malaysia

mpob_admin — Thu, 12 Sep 2019 06:29:08 +0000

Most oil palm-planted land owned by independent smallholders is poorly managed in terms of fertilisation and ultimately results in lower nutritional status. Lack of knowledge in fertiliser management is one of the major factors affecting low fresh fruit bunch (FFB) production. Study to assess the level of knowledge on fertiliser management among the independent smallholders was conducted involving 1147 respondents in Malaysia. Data was collected using questionnaire-guided surveys by face to face interview and field observation. Results showed that most of the respondents are men, Malay and Chinese, age 45 to 69 years old with a farm located more than 5 km to 10 km away from either house or mills. Based on demographic profiles, respondents with a good level of knowledge were at age 45 to 69 years old, received primary and secondary education, having 1-3 family members, gross farm income income below RM2000. The main information on fertiliser management was obtained from MPOB extension agents. Good level of knowledge was also found from respondents having land less than 10 ha with palm below 8 years old, planted in inland with flat to undulating topography. Palm was planted using a standard triangular planting system of seedlings obtained from a licensed nursery. Respondents mostly purchased compound fertilisers from the fertiliser shops at prices ranging from RM50 to RM100 for a bag of 50 kg. Most respondents applied 3 kg to 6 kg-1 palm-1 yr-1 using less than two workers and the labor cost per bag is estimated to be between RM6 and RM10 each bag. Respondents generally had sufficient knowledge, especially on the types of nutrient contents in fertiliser, the right application rate for immature and mature palm, correct timing, a method of application and placement. However, some respondents still lack of knowledge to identify the symptoms of oil palm nutrient deficiency. Based on states, a high number of respondents having good knowledge on fertiliser management, except for the two states of Kelantan and Perak. Finally, out of 1147 respondents involved in the study, 78.2% or 897 respondents had good knowledge on the importance of fertiliser to improve their oil palm productivity.

Keywords: fertiliser management, knowledge, independent smallholder, oil palm.