MALAYSIA’S Input Financing Scheme for Oil Palm Smallholders (IPPKS) has been officially discontinued as of June 2024 due to insufficient uptake, the Ministry of Plantation and Commodities confirmed on Thursday.
Minister Datuk Seri Johari Abdul Ghani said the scheme, which began in 2019 through a collaboration between the Malaysian Palm Oil Board (MPOB) and Agrobank, aimed to improve productivity among smallholders by offering affordable financing for agricultural inputs.
"IPPKS provided financing of RM5,000 per hectare at a low interest rate of two per cent annually, with a three-month moratorium," Johari told the Dewan Negara in a written response. "However, after five years, only 250 applications were received, with 200 approved covering a total of 493.07 hectares."
The minister was responding to Senator Roderick Wong Siew Lead, who had questioned the discontinuation of MPOB-linked fertiliser and pesticide subsidy schemes, and sought updates on new support initiatives for independent palm growers.
Johari noted that the government is now focusing on more effective programmes such as the Palm Smallholders Replanting Financing Incentive Scheme (TSPKS 2.0), introduced in January 2024. The hybrid model offers 50 per cent as a grant and 50 per cent as soft financing at a similar two per cent annual rate. Beneficiaries enjoy a four-year moratorium before repayment begins in the fifth year, with a repayment period of up to 12 years and a maximum coverage of 6.5 hectares.
The government has allocated RM100 million for the TSPKS 2.0 scheme for both 2024 and 2025, with an annual target of replanting 5,900 hectares of unproductive or ageing palms nationwide.
Under the scheme, support is provided for land preparation, certified seedling purchases, and maintenance in the first two years—including fertilisation, weeding, pest control and equipment procurement.
"To ensure higher yields, smallholders must obtain certified high-quality seedlings from MPOB-approved nurseries that adhere to the Good Nursery Practices Certification (CoPN)," Johari said. "This will help boost fruit output and long-term earnings."
The Ministry is also continuing efforts to reduce overreliance on palm oil revenue by diversifying smallholder income through initiatives like the Crop Integration with Oil Palm (ITa) and Livestock Integration with Oil Palm (ITe) schemes. Launched in 2016, these programmes promote efficient land and resource use among independent smallholders.
In addition, Johari highlighted the Cantas Discount Scheme (SKIDIC), which offers RM1,000 discounts on the purchase of motorised palm harvesting tools. He added that the government fully funds the Malaysian Sustainable Palm Oil (MSPO) certification, covering audit fees and related incentives to promote industry standards among smallholders. - September 11, 2025
