1

TRAINING INDUSTRIAL REPORT

NAME AND AGENCY ADDRESS: MALAYSIAN OIL PALM BOARD (MPOB)

6, PERSIARAN INSTITUSI, BANDAR BARU BANGI,
43000 KAJANG, SELANGOR.
EXTENSION SERVICE UNIT (ESU)
UNDER SMALLHOLDER SECTOR

STUDENT NAME : AINA NATASYA BINTI RAMLI

STUDENT ID : 2020893262

FACULTY OF PLANTATION AND AGROTECHNOLOGY

DIPLOMA PLANTING INDUSTRY MANAGEMENT
UNIVERSITI TEKNOLOGI MARA (UiTM)
KAMPUS JASIN
2022
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TABLE OF CONTENTS

PAGES
ACKNOWLEDGEMENT 3
PRACTICAL TRAINING DETAILS 4
1.0 INTRODUCTION 5
1.1 Malaysia Palm Oil Board (MPOB) 5
1.1.1 Vision MPOB 5
1.1.2 Mission MPOB 5
1.1.3 Objective MPOB 6
1.1.4 MPOB logo 6
1.1.5 MPOB function 7
1.1.6 MPOB map 7
1.1.7 Organization Chart Malaysian Palm Oil Board 8
1.2 Smallholder Development Research Division 8
1.3 Extension Service Unit 9
1.4 Organization Chart in Extension Service Unit 9
2.0 MINI PROJECT 10
2.1 Introduction 10
2.1.1 Oil palm in Malaysia 12
2.2 Literature review 16
2.2.1 Issues in independent smallholder (ISH) 16
2.3 Methodology 18
2.4 Discussion 18
2.4.1 Deforestation 18
2.4.2 The European Union (EU) has banned the usage of palm oil 18
2.4.3 Factors deforestation 19
2.4.4 Labor in the oil palm sector 20
CONCLUSION 28
REFERENCES 29
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ACKNOWLEDGEMENT

I thank Allah for His abundance and grace, which enabled me to complete the report and undergo
industrial training at the Malaysian Palm Oil Board (MPOB).

First and foremost, I'd like to express my gratitude to Mr. Tan Say Peng, my supervisor at
the Extension Service Unit (ESU), for all of his advice, assistance, and very useful advice. He has
provided a great deal of advice, assistance, and guidance and is very committed to assisting me in
resolving any issues that may arise while carrying out a task.

I'd also like to thank the Extension Service Unit (ESU) staff for all of their assistance and
cooperation throughout my industrial training. Not to mention MPOB's willingness to accept me
as a practical student. There are numerous things I have learned during my practical training at
MPOB that will prepare me to enter the workforce.

I'd also like to thank my mother and brother (Rosnaiha binti Junoh and Mohamad Hamirul
bin Ramli) for their encouragement and support. As a result, I am extremely grateful to everyone
who has assisted me, and I will never forget their help and support.

Aina Natasya binti Ramli

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PRACTICAL TRAINING DETAILS

Industrial training is a program or course that provides students with the opportunity to work in an
organization. Final-year students must take this course as part of their graduation requirements.
I completed six weeks of industrial training at the Malaysian Palm Oil Board (MPOB) and
was assigned to the Extension Service Unit (ESU) of the Smallholder Section under the
supervision of Mr. Tan Say Peng.

During my industrial training, I was able to learn skills that I would not have been able to
learn as a university student. I was able to improve my skills in using Google Scholar to find
relevant articles to study under the supervision of Mr. Tan Say Peng. The title of the mini-project
assigned to me is "OIL PALM SMALLHOLDER ISSUES AND PROBLEMS IN MALAYSIA,"
and the data and information I entered in this project are from MPOB for 2021 and 2022.

Under the supervision of Mrs. Suhana Dahari, I was also exposed to the problem of human-
wildlife conflict. I was also shown how to create palm gazette infographics for MPOB's BIL.81.
Overall, I had the opportunity to learn new things and gain real-world work experience for which
I can prepare myself in the future.
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1.0 INTRODUCTION
1.1 Malaysian Palm Oil Board (MPOB)

Malaysia's Palm Oil Board (MPOB) is a government agency under the Ministry of
Primary Industries that serves the country's palm oil industry. MPOB was established
by an Act of Parliament (Act 582) on 1 May 2000 as a result of the merger of the
Malaysian Palm Oil Research Institute (PORIM) and the Palm Oil Registration and
Licensing Authority (PORLA).

1.1.1 Vision MPOB

To be a research and development institution that won the Nobel Prize,
providing guidance and encouragement for the progress of the oil palm
industry that has high diversity, added value, global competitiveness, and
sustainability.

1.1.2 Mission MPOB

To enhance the well-being of the Malaysian oil palm industry through
excellent research & development and services.
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1.1.3 Objective MPOB

i. To establish a research leadership role in the development of the
palm oil industry in a sustainable economy and society.
ii. To encourage public-private cooperation and partnership in income
generation and welfare enhancement to promote local community
socioeconomic development.
iii. To increase Malaysia's capacity and profile as an economic model
with a sustainable palm oil industry.

1.1.4 MPOB logo

The Malaysian Palm Oil Board's (MPOB) logo is a palm frond with the
image of an oil drop. The frond projection represents the MPOB's various
functions, which include research and development and commercialization,
registration, licensing, technical advice and consultation.
The logo's green stripe also represents MPOB's strategy: maximum palm oil
exploitation, full use of non-oil components, and full use of land in the palm
oil industry. The golden stripe represents "Malaysia's golden plant."
The black type represents MPOB's significant and central role. The logo's
gold band and circular base represent the board's dynamic state, which is
based on energy and progress.
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1.1.5 MPOB function

• Enacting development policies and programs to ensure the long-
term viability of Malaysia's oil palm industry
• Conduct and encourage palm oil industry-related research and
development
• Regulate, register, coordinate, and promote all oil palm-related
activities.
• Development, promotion, and commercialization of research
findings, as well as technical services, advice, and consultancy to
the palm oil industry
• Creating and sustaining markets for palm oil products, as well as
promoting effective marketing
• Relationship and coordinate with other organizations both within
and outside Malaysia in order to improve the Malaysian oil palm
industry.
• Planning and carrying out training and human resource development
programs in accordance with the needs of the oil palm industry
• To serve as a resource and information hub for the palm oil industry,
including the publication and distribution of information on palm oil
and other oils and fats.

1.1.6 MPOB map

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1.1.7 Organization chart Malaysian Palm Oil Board

1.2 SMALLHOLDER DEVELOPMENT RESEARCH DIVISION

Extension group and support services

EXTENSION SERVICE
UNIT (ESU) Extension technology group

Smallholder entrepreneurial group

SMALLHOLDER
EMPOWERMENT UNIT
Smallholder development group
(SEU)

Crop integration group

CROP AND LIVESTOCK
INTEGRATION UNIT
Livestock integration group
(CLI)

SUSTAINABILITY Certification management group

STANDARDS &
CERTIFICATION UNIT Certification implementation group
(SSCU)
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1.3 EXTENSION SERVICE UNIT

EXTENSION SERVICE UNIT (ESU)

Extension group and Extension technology

support services group

Extension Service Unit (ESU) established to provide palm oil advice, guidance,
training, and consultation services It also aims to plan, monitor, and evaluate the issues
confronting smallholders in the oil palm cultivation sector. This unit was also
established to provide smallholders with support services and to introduce them to
cutting-edge technology.

1.4 ORGANIZATION CHART IN EXTENSION SERVICE UNIT

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MINI PROJECT
(OIL PALM SMALLHOLDER ISSUES AND PROBLEMS IN MALAYSIA)
2.0 MINI PROJECT
2.1 Introduction
Smallholder is a person who cultivates an oil palm plantation that does not exceed 40.46
hectares(100 acres). Smallholders in Malaysia are classified into two types: organized
smallholders and independent smallholders. Organized smallholders are oil palm
producers who are overseen by government agencies such as FELDA, FELCRA, and
RISDA, as well as state government agencies such as the Sarawak Land Consolidation
and Rehabilitation Authority (SALCRA) and the Sabah Land Development Board
(SLDB) (Mohd Firdaus Abdul Aziz, 2016).
On the other hand, independent smallholders are smallholders who grow and work their
oil palm plantations or hire others to work on their oil palm farms. Nowadays, one of the
factors emphasizedin the country's oil palm production is sustainability. The capacity
to fulfil the requirements of thecurrent generation without sacrificing the ability to meet
future generations' needs is called sustainability. To guarantee that this component of
sustainability is realized, the three essential parts of sustainability, namely social
development, environmental protection, and economic growth, must be prioritized.
(Mohd Firdaus Abdul Aziz, 2016)
To ensure that independent smallholders in Malaysia are not excluded from efforts to
produce sustainable palm oil in line with the government's aspirations and overseas
market demands, the government has introduced and implemented the Malaysian
Sustainable Palm Oil Certification Scheme (MSPO) for private smallholders through
the Malaysian Palm Oil Board (MPOB). Furthermore, the MPOB has formed a
Sustainable Palm Oil Cluster (SPOC) to gather and standardize private smallholder
farming practices in preparation for more sustainable palm oil production. (Mohd
Firdaus Abdul Aziz, 2016)
MSPO accreditation is now mandatory for the agriculture sector, oil palm processors,
and smallholders. The implementation of MSPO Certification for organized
smallholders has effectively met 100 per cent by 2020. The MSPO certification of
smallholders carried out by MPOB in collaboration with federal and state government
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organizations covers 724,633.32 hectares of oil palm farms. The aim for certification
of the palm oil plantation and manufacturingsector is also nearly met. The number of
independent smallholder certificates issued has reached 220,650, with a total land area
of 835,343.50 ha, according to data from the March 2022 private oil palm smallholder
fact sheet. There is a total of 162 SPOC MPOB by state until March 31, 2022, with a
total population of 160,516 individuals and an area of 626,644.8539 ha. (Reza Ashraf
Zakaria, 2022)
The chart below depicts the distribution of independent oil palm producers in Malaysia
for the year2021.
Figure 1: Malaysian Independent Smallholders

Malaysian Independent Smallholders

(as at December 2021)

Sarawak
41,443
Sabah 32,306 236,628.58 Kedah 6,108 24,086.49
207,455.54 Johor 67,186
171,907.62 Kelantan 2,325
Terengganu 4,096
12,424.80 7,113.46
Melaka 2,840
Selangor 14,411 11,697.93
24,015.93 Negeri Sembilan 5,790
24,265.77
Perak 37,321
Pulau Pinang 1,470 Pahang 13,370
92,396.30
6,471.69 Perlis 36 155.67 44,739.78

Johor 67,186 171,907.62 Kedah 6,108 24,086.49 Kelantan 2,325 7,113.46

Melaka 2,840 11,697.93 Negeri Sembilan 5,790 24,265.77 Pahang 13,370 44,739.78

Perak 37,321 92,396.30 Perlis 36 155.67 Pulau Pinang 1,470 6,471.69

Selangor 14,411 24,015.93 Terengganu 4,096 12,424.80 Sabah 32,306 207,455.54

Sarawak 41,443 236,628.58

Many smallholders are unaware of the standards for oil palm certification; some are
unaware of the existence of the MSPO and RSPO. This issue is exacerbated by
certifying authorities'incapacity to interpret those standards into a language that rural
and indigenous populations can understand. While there is a wealth of knowledge
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available online, a lack of phone or internet connectivity and illiteracy make it difficult
for rural areas to access and utilize the available resources. Other non-governmental
organizations have indicated that certain indigenous groups were led to think that
without certification, they would be unable to sell their harvests at all. (Rahman, 2020)
2.1.1 Oil palm in Malaysia
Malaysia is the world's second-largest palm oil producer, a business fraught
with controversy. Together with Indonesia, these two Southeast Asian countries
generate 85 per cent of the world's palm oil supply and fulfil 34 per cent of
worldwide vegetable oil consumption. (Kushairi, et al., 2019)
In 2018, the overall export value of oil palm goods was RM67.5 billion
(SGD22.18 billion). In 2019, oil palm generated 37.7 per cent of Malaysia's
agricultural GDP, with China and India beingits main export markets (in that
order as of November 2020). Exports to the European Union (EU) and the
United States (US) are much lower. However, in terms of oil palm
sustainability, human rights abuses, and laws, the country struggles the most in
these regions.
The COVID-19 pandemic, which closed borders and resulted in movement
restriction orders globally and locally, had the most significant impact on
agricultural and indigenous oil palm smallholders. Harvested fruit was unable
to reach the market because intermediaries were unableto go beyond the 10km
movement limit, and farmers' marketplaces, mills, and oil palm processing
facilities were compelled to remain closed.
While the worldwide attention on the pandemic dampened the fervor of
international efforts against Southeast Asian palm oil, previous political
blunders (before the outbreak) resulted in an Indian boycott of Malaysian palm
oil. This exacerbated the depression caused by a global slowdown in oil palm
prices, overall manufacturing and output, and global commerce in general. The
graph below depicts how much oil palm prices dropped during the first six
months of the epidemic compared to the same time in 2019. The graph appears
to show a seasonal high at the end of the year; nevertheless, the price drop in
the middle of 2020 (because of the pandemic) ismore severe. (Rahman, 2020)
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Figure 2: Comparison of Oil Palm Prices (between 2019 and 2020)

Data source: Adapted from figures taken from the Malaysian Palm Oil Council:
Monthlyaverage price between January and November in 2019 and 2020:
http://mpoc.org.my/monthly-palm-oiltrade-statistics-2020/

Malaysia's most prominent export customers are India and China; the
significant decline in quantity and pricing impacted the country's oil palm
economy in the first half of 2020. This was especially felt by smallholders, for
whom every ringgit gained in harvest sales meant a significantdifference in their
capacity to subsist.
The table below depicts the shift in oil palm shipments to India and China during
the same period,due to pandemics and political errors by top leaders. Exports to
India fall by nearly half between 2019 and 2020, while China remains stable
with a minor increase in 2020, in line with rising globalpricing.
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Table 1: Comparison of Malaysian exports of oil palm to India and China

(Jan-Nov 2019 vs Jan-Nov 2020)
Export to India Export to China Total export to
Period
(MT) (MT) India & China
Jan to Nov 2019 4,270,864 2,233,888 6,504,752
Jan to Nov 2020 2,178,517 2,583,025 4,761,542
48.99% decrease 15.63% decrease 26.8% decrease
Source: Adapted from figures taken from the Malaysian Palm Oil
Council:
http://mpoc.org.my/monthly-palm-oil-trade-statistics-2020/

According to the most recent statistics from Malaysia's Department of

Statistics (2020), palm oil product exports grew in the third quarter of 2020.
Figure 4 depicts monthly exports from Januaryto November 2019 and 2020.
As prices were expected to climb, year-end exports fell, with the 2020
seasonal reduction falling somewhat farther than the previous year. This is
despite increasedworldwide demand as countries seek to rebuild their
economies. Experts warn that Malaysian output of fresh fruit bunches and
replanting of older crops has dropped (particularly among smallholders) and
that the oil palm growth estimates represent an increase in oil palm land rather
than productivity.
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Figure 3: Malaysia's Monthly Overall Oil Palm Exports (Jan to Nov 2019
and 2020)

The graph below compares exports from January to November in 2018 and 2019
to available 2020numbers for selected destinations (China, India, Pakistan, and
the Netherlands are Malaysia's largest markets). Experts observe that prices and
exports are already rising. However, whether thisis due to China's return to the
entire economic operation or the La Nina effect on competitor oils such as soy
is unclear. Nonetheless, any boost in pricing and demand will help smallholders'
lives.

Figure 4: Comparison of Malaysian Oil Palm Export

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Source: Based on figures from Malaysian Palm Oil Board (MPOB): Export of
Palm Oil by Destination (Years 2018, 2019 and 2020) –
http://bepi.mpob.gov.my/index.php/en/?option=com_content&view=category
&id=109

2.2 Literature review

2.2.1 Issues in independent smallholder (ISH)

Parallel to the increased involvement of smallholders in the

development of the oil palm plantationindustry, a number of concerns
have arisen that influence their participation. Based on observations
made in the field, the following problems arise once they cultivate the
plants:
i. Access to Infrastructure Facilities
Small oil palm growers in the hinterland typically have
plantation holdingsremote from the main road. As a result of
the difficulties in gaining road access, small oil palm growers
have challenges in transporting and selling fresh oil palm fruit.
Smallholder palm oil plantation locations are relativelyremote
from the main road and must be reached by minor trails and
river routes. Furthermore, if their agricultural field is
connected to the road but the road surface is extremely terrible
with potholes because the road is not paved, the road surface
is very slippery when it rains, making it difficult for cars to
access. As a result, shipping and marketing fresh bunches of
fruit is challenging and might take several days. (Stephanie
Ligong, 2017)
ii. Inadequate money
Smallholder new to the oil palm plantation business is
frequently affected by a lack of money to boost their output.
Because of the market's high fertilizer pricing, some small oil
palm growers are obliged to utilize rice fertilizer, which the
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Department of Agriculture subsidizes under the rice fertilizer

subsidy program. (Stephanie Ligong, 2017)
iii. Labor shortage

Oil palm crops present a labor problem to smallholders since

they need a high degree of devotion. Furthermore, the majority
of smallholders that produce commercial crops are beyond the
age of 40. The old age element makes them fatigue rapidly,
and the plant activity is quite difficult to workon. Furthermore,
smallholders rely only on family labor and conventional
technologies. As a result of a restricted work force,
smallholders who possess an extensive area of crops find it
challenging to handle tasks such as fertilizing and harvesting.
(Stephanie Ligong, 2017)
iv. Deforestation

The European Union (EU) rejected the use of palm oil in 2018
when our nation, Malaysia, received charges from the EU that
palm oil farming caused environmental harm. According to
Tun Dr. Mahathir Mohamad, Malaysia's then-prime minister,
the claims had a severe impact on the country, which relies on
palm oil to enhance people's socioeconomic well-being and
allow Malaysia to meet the Sustainable Development Goals
(SDG). (Malaysiadateline, 2019)

v. Climate

Climate is one variable that impacts agricultural product output

worldwide,mainly when El Nino and La Nia events occur—
during the monsoon season, flooding halts the supply of
harvested FFBs to millers. This situation also results in
uncollected FFB and loose fruits. If the fruits are transferred
to millers more than 24 hours after harvesting, the quality of
FFB deteriorates. Millers are often required to acquire at a
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reduced price. Itis intended to compensate for the given FFB's

high FFA reading, which negatively impacts firm profitability.
Smallholders will be hit twice if the FFB transaction is done
through fruit dealers (FDs), who will bear the losses.
Smallholders are often on the receiving end of things. (Hassan
Marzukhi, 2021)
2.3 Methodology
This literature focuses on the types of smallholder engagement as well as the concerns
and obstacles that smallholders encounter when farming oil palm crops in Malaysia.
By using desk research and library search via Google Scholar, I was able to locate
resources and ideas to expandon the issues confronting smallholders.
2.4 Discussion
2.4.1 Deforestation

Deforestation is commonly characterized as the loss of forest cover

due to land conversion to another land use. Deforestation for oil palm
plantations has a variety of consequences, including greenhouse gas
emissions, water shortages, soil degradation, biodiversity loss, and so
on. Biodiversity loss, particularly in tropical primary forests, is
concerning since it affects not just local populations but also has
ramifications for global biodiversity protection. The primary causeof
biodiversity loss is land use change. It endangers natural habitats,
perhaps leading to species extinction.

2.4.2 The European Union (EU) has banned the usage of palm oil

Countries in the European Union (EU) have recommended a ban on

oil palm biodiesel, which has been connected to logging and
deforestation. The issue posed by European Union nations throughthe
embargo on palm oil will at the very least affect the country's
economic development and the lives of smallholders, notably Orang
Asli smallholders. The idea was hailed as the proper approach by
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European Union member states, which acknowledge that economic

pressure is the only way toconvince oil-producing countries to end
deforestation and deforestation while simultaneously prioritizing
environmental preservation. Palm oil cultivation operations in
aboriginal communities,which mostly involve family members, have
caused a dispute in the European Union, which saysthat Malaysia's oil
palm sector is the principal source of forest damage and deforestation.
However, the undeniable reality is that palm oil, a vegetable oil, is less
expensive and uses fewer resources than other vegetable oils such as
soybean oil, canola oil, and sunflower oil. Alternative vegetable oil
crops, such as rapeseed and soy, require ten times the amount of
agricultural area as palm oil plantations. However, no other
vegetable oils are mentioned; instead, the boycott is primarily
intended at the industrial sector—palm oil—which is thought to harm
the environment. They even claim to be victims of the oil palm
industry's continued role as a "protector" of European consumers,
which will certainly have little effect on most European nations or the
view of oil consumers of Malaysian oil palm. (Vivien W.C. Yew,
2020)
2.4.3 Factors deforestation

Over the last several decades, worldwide demand for palm oil has
increased dramatically. Much of the production growth has taken
place in carbon- and biodiversity-rich forest areas in Malaysia and
Indonesia (M&I), leading to record levels of terrestrial carbon
emissions and biodiversity loss. This has resulted in a number of
voluntary and statutory regulatory steps, as well as proposals to ban
M&I palm oil imports.
A rising percentage of consumers want palm oil-based goods that are not linked
to deforestation. The European Union is likewise worried about avoiding
deforestation-tainted imports, particularly biofuel. Other countries, working
with environmental non-governmental organizations, have also pushed to
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exclude palm oil, or oil connected to deforestation, from consumer products and
other imports. Many of the world's major palm oil importers and producers have
announced "No Deforestation" promises, guaranteeing that deforestation will be
eliminated from their supply chain by a specific date. (David L. A. Gaveau,
2022)
2.4.4 Labor in the oil palm sector
i. Labor shortage
Malaysia's agricultural economy significantly relies on foreign
employees to carry out farm chores. If there are insufficient foreign
employees to carry out farm tasks, this has a negative impact on
Malaysia's plantation sector. According to an FMT study on July 19,
2022 (FMT, 2022), the Malaysian palm oil sector lost RM10.45 billion
owing to the fruit not being harvested in the first five months of this year
due to the ongoing workforce crisis. According to Zuraida Kamarudin,
Minister of Plantation Industry and Commodities, the industry is short
28,940 personnel, with an expected harvest output of two tons of oil
palm fruits per day. She also stated that around 57,880 fresh bunches
are not plucked daily, amounting to 1.5 million tons per month. It may
be extrapolated from this that, due to a lack of foreign workers, the
amount of unharvested palm oil for the first five months of 2022 is 7.52
billion tons. (FMT, 2022)
When we look closely, the fundamental issue that is a challenge to the
country as well as firms who are facing a labor shortage is a labor deficit.
This labor deficit is not limited to Malaysia; other nations are
experiencing the same issue. According to Azman Ismail (2015),
foreign laborers presently account for around 78% of the farm's overall
workforce. Initially, the bulk of them is inexperienced. (Azman Ismail,
2015)
Foreign labor in Malaysia is categorized into two groups, according to
the journal Agribusiness Management and Development: skilled labor
and semi- or unskilled labor. The vast majority of foreign employees
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employed on plantations are unskilled and so engaged as general

laborers. Based on intellectual abilities, the harvester (cutter), pruner,
and new arrival are the three kinds oflabor in an oil palm plantation. The
harvester is a competent and experienced laborer in charge ofcutting the
fruit, whereas the pruner is in charge of trimming and stacking the frond.
The immigrants had no expertise or abilities for plantation work; they
were taught as pruners by seasoned and top harvesters in three months.
Unskilled pruners will be retrained as field workers,frond stackers, and
loose fruit collectors. (Thayaparakanthan, 2017)
However, after they have achieved the appropriate skills and
experience, their work visas will expire, and they will be obliged to
return to their home countries. As a result, the plantation has begun to
recruit fresh workers once more, and this pattern will continue with each
recruiting procedure. This vicious loop of employing inexperienced
employees and offering on-the-job training substantially influences
plantation enterprises' production and efficiency. This situation will
harm the plantation's revenues and earnings at the micro (business) and
macro (country) levels.
Many Malaysian estates have experienced labor shortages, notably in
Sabah and Sarawak in the east. The principal reasons for this issue are a
lack of enthusiasm in working on estates and a highturnover rate among
residents. Employers hire foreign labor owing to a scarcity of local
workers and excessive turnover among local staff, according to the
report. Estate managers, they believe, prefer foreign labor because they
are simpler to manage, work longer hours, and are more cost- effective.
a) Factors in the occurrence of labor shortages

The COVID-19 pandemic, which has resulted in entrance

and departure restrictions in the nation, has resulted in a
lack of foreign labor. Some foreign workers have also been
sent home for various reasons. As a result, the plantation
sector, which is part of the oil palm industry and entails the
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operation of harvesting fresh bunches of fruit, has

stagnated, allowing matured fruits to go unharvested. As a
result, the Malaysian palm oil sector would incur losses,
causing the country's economy to suffer as palm oil is the
country's primary source of revenue.

Locals choose to work in manufacturing and as

housemaids on plantations because they believe plantation
job is of poor quality. This encourages people to work in
better settings and environments. Locals are hesitant to
work on plantations, one of the elements and scenarios
leadingto the labor shortage. Locals are solely interested in
administrative occupations such as executive, staff, and
foreman instead of working in operations and heavy-duty
duties. Another reason local people are apprehensive to
engage in the plantation business is the belief that there are
fewer prospects.
b) The impact labor shortage in the oil palm sector and Malaysian
economic

According to the Malaysia Productivity Corporation,

associated with the government, another year of palm
plantation labor shortage may result in economic losses of
more than $6 billion as millions of tons of fresh fruit
bunches (FFB) might deteriorate if left unharvested.
According to the Malaysian Estate Owners Association,
FFB must be harvested within 12 to 15 days to avoid
becoming overripe or rotting (MEOA). Sarawak Oil Palm
Plantation Owners Association (Soppoa) claimed that the
sector could not afford any additional delays in the arrival
of foreign labor. The ripening fruits on palm trees must be
gathered soon, or else an extra loss of revenue would
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result.
Seasonally, palm output peaks between July and October
before declining as rains throughout the year's end
monsoon season hamper harvesting and impede
production. Hiring inexperienced staffis also a challenge
for the industry. According to palm estate insiders, new
laborers coming to Malaysia with no expertise in
harvesting or other duties in the palm oil sector impede the
process since training them takes time. According to
regional estimates, Malaysia's palm oil production might
take 15 to 24 months to completely recover from the
chronic human resources deficit.
ii. Child labor
According to a study by academics at Universiti Kebangsaan Malaysia,
children have participated in paid activities in Sabah for a very long
period. Less than 30% of them were discovered to house minors, and
only a small percentage of them had regulations against child labor.
Although there isno single factor that can entirely explain why children
work, the study found that poverty is a significant role. (Earthworm,
2017)
a) Factor occurrence of child labor
Some of the children interviewed during the study said they worked
to exert their independence. Most want to be independent because
they are not 100% dependent on their parents. The majorityof child
labor comes from low-income families. They work to help their
parents or earn money tobuy necessities for themselves because they
know their parents are incapable of fulfilling their wishes. Poverty
is among many children forced to work at a young age. In addition,
the large number of family members can also cause poverty
problems that cause parents to send their children to work to cover
household or health expenses. Parents are unable to provide
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adequate care due to a large number of family members.

(Earthworm, 2017)
Furthermore, some parents encourage them to work. Some parents
believe that their children are better off learning employable skills,
especially if they are struggling in school. Many parents believe that
skills are more important than academic knowledge. Most parents
are not exposed tothe importance of knowledge in school because
they only think that they are just reading or learning science in
school. However, in school, they also apply knowledge and skills to
children. Even in school, skills are not the subject that is
emphasized, but the knowledge given in school can guarantee the
future of children. (Earthworm, 2017)
b) Laws related to child labor

Child means any person who has not completed his 14th
year of age also young person means anyperson who not
being a child, has not completed his 16th year of age. The
Malaysian Children andYoung Persons (Employment) Act
1966 (Act350), be it enacted by the Seri Paduka
BagindaYang di-Pertuan Agong with the advice and
consent of Dewan Negara and Dewan Rakyat in Parliament
assembled, permits those who are 14 years old and older
to work in public entertainment and on government-
approved platforms, as well as in light, non-hazardous
employment that support theirfamily's activities and this
act shall apply only to the states of Peninsular Malaysia.
There is a difference between employment, in which
children and young people may be engaged.
A child may be engaged in any of the following
employments:
• Employment involving light work suitable to his
capacity
 25

• Employment in any public entertainment with the

terms and conditions of license granted
• Employment requiring him to work approved or
sponsored by the Federal Government of the
Government of any state and carried on in any
school, training institution or training vessel
• Employment as an apprentice under a written
apprenticeship contract approved by the Director
General whom a copy of such contract has been
filed
Meanwhile for young person may be engaged in any of the
following employments:
• Any employment involving light work suitable to
his capacity
• Employment as a domestic servant
• Employment in an industrial undertaking suitable
to his capacity
• Employment on any vessel under the personal
charge of his parent or guardian
• Employment in any office, shop (including hotels,
bars, restaurants and stall), factory, workshop,
store, theatre, cinema, club or association
No young female person may be employed in hotels, bars,
restaurants, or clubs unless under the management of her
parent or guardian. Female young people engaged in any
employment in a club not managed by their parent or
guardian require approval from the Director General of
Labor, andno child or young person shall be or be required
or permitted to be engaged in any employment contrary
(differing) to the provisions of the Factories and
Machinery Act 1967, or in anyemployment requiring him
 26

to work underground, and no child or young person

engaged in any employment shall, in any period of 7
consecutive days, be or be required or permitted to be
engaged in any employment.
Hours of work for children and young person also have a
difference which is;
No child engaged in any employment shall be required or
permitted:
✓ To work between of 8 o'clock in the evening and 7
o'clock in the morning (except to any child engaged
in any public entertainment)
✓ To work for more than 3 consecutive hours without
leisure pf at least 30 minutes;
✓ To work for more than 6 hours in a day or if the
child is attending school, for a period of which
together with the time he spends attending school,
exceed 7 hours;
✓ To start work on any day without having a period
of not less than 14 consecutive hours free from
work.

No young person engaged in any employment shall be

required or permitted:
✓ To work between the hours of 8 o'clock in the
evening and 6 o'clock in the morning
✓ To work for more than 4 consecutive hours without
any period of leisure for at least 30 minutes
duration
✓ To work for more than 7 hours in any one day or if
the young person is attending school. For a period,
which together with the tie he spends attending
 27

school, exceed 8 hours

✓ To start work on any day without having a period
of not less than 12 consecutive hours free from
work
 28

CONCLUSION
Palm oil smallholders face many obstacles when attempting to enter the palm oil
crop business. Access to infrastructure, financing, and labor shortages are among
the challenges. Smallholders do not need to be concerned about breaking into the
industry because the government is constantlyassisting them. More strategic steps
and awareness programs about the importance of MSPO certification and oil palm
cultivation should be planned by the MPOB. Intercropping can also improve
ecosystem health and soil fertility, which leads to higher oil palm yield. This is
consistentwith the government's efforts to optimize future palm oil output.
 29

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