As the palm oil industry evolves, Malaysia’s smallholders are helping shape a more sustainable future, grounded in collaboration and community.
On Carey Island, Malaysia, the sun shines down on rows of oil palm trees across a 21-acre farm. Here, Reta Lajah and her husband tend to their land—gathering fallen fruits and pruning trees—and enjoy peaceful weekends with the company of their children and grandchildren.
Lajah is one of 450,000 smallholders who have become vital contributors to an industry long dominated by large corporations since oil palm farming first took root in Malaysia in 1917. Today, that landscape has evolved, with smallholders accounting for 26% of the country’s palm oil supply, providing a stable livelihood for many rural families.
Land of opportunity
Lajah’s journey as a palm oil farmer began when she was just 17 years old, working on the largest plantation in her hometown. A member of the Mah Meri—one of Peninsular Malaysia’s 18 indigenous groups—she received her own plot of land in the early 2000s through a government program. But the path wasn’t easy. “We cleared and planted everything,” she recalls. “No machines, just our hands and tools. It was very hard work.”
As smallholder farming gradually spread in her village, the community began to diversify beyond its traditional reliance on fishing—an industry that, as Lajah points out, can be unstable during certain seasons. The shift opened up new income opportunities and a more stable livelihood for many families.
Still, across Malaysia, women remain significantly underrepresented, making up 20% to 25% of the country’s palm oil plantation workforce. In Lajah’s village, she is just one of two female farm owners. She believes more women could step into this space with the right training, support, and access to knowledge.
A long road to reform
In past decades, palm oil expansion was associated with forest loss, but following successful campaigns for change and targeted reform efforts, that trend has been reversing in Malaysia. Between 2012 and 2024, deforestation in Malaysia dropped by over 70%—a decline driven by strengthened government regulations, voluntary corporate commitments—including No Deforestation, No Peat, No Exploitation (NDPE) policies—sustainability reporting, and increased industry transparency.
Central to this progress is the Malaysian Sustainable Palm Oil (MSPO) certification, a national scheme introduced in 2013 to raise standards and promote more responsible practices. Now mandatory, MSPO certification covers environmental protection, labor rights, and the ability to trace the palm oil product to a sustainable source. For smallholders like Lajah, it also unlocks access to global markets by demonstrating a commitment to sustainability.
Malaysian palm oil is also one of the world’s largest producers of Certified Sustainable Palm Oil (CSPO), with steady growth in the number of smallholders and production areas independently audited and meeting the internationally recognized standard. In Sabah, the local government launched an initiative a decade ago to support oil palm growers in pursuing CSPO certification, with the aim of aligning local production with international standards and improving access to global markets.
Rooted in responsibility
While Malaysia’s sustainability push has reshaped its palm oil industry, smallholders—who often operate with limited land and resources—still face challenges, from price fluctuations to the complexity of meeting evolving standards.
To support them, the government has introduced additional programs beyond certification. Initiatives like ITa (Integrated Short-Term Crops) and ITe (Integrated Livestock) encourage farmers to diversify their output, making their income more resilient and improving land use. More recently, national efforts have focused on strengthening traceability and preparing smallholders for upcoming international regulations such as the EU Deforestation Regulation.
At the grassroots level, organizations like Wild Asia play a crucial role in empowering smallholders. Working directly with farmers, they help embed sustainability into everyday practice—reducing chemical use, promoting safer waste disposal, and introducing intercropping with fruits and vegetables—to improve soil health, attract biodiversity, and create additional income streams.
“We found that almost consistently their yields are the same or even slightly better,” says Wild Asia founder and executive director Reza Azmi. “You also see more worms in the soil. You hear more birds. The air feels fresher.” For Azmi, sustainability isn’t just a compliance checklist.
Palm oil plays a significant role in Malaysia’s economy, contributing almost 3% of the national GDP. And as stewards of the land, independent farmers are uniquely positioned to lead positive change, one farm at a time. Having benefited from support herself in the past, Lajah now hopes to share her experience and help others, especially women, step into the field—ensuring that the next generation of farmers are better equipped and part of a more sustainable future.
Source: CNN Business
