Perceived Management Challenges Across Income Groups Among Independent Oil Palm Smallholders in Malaysia

Abstract

Independent oil palm smallholders play a vital role in Malaysia's palm oil sector but face numerous operational and market-related challenges. While financial capacity is often considered an important determinant of resilience, evidence on whether management challenges differ across income groups remains limited. This preliminary cross-sectional survey examined differences in perceived management challenges among independent oil palm smallholders in Peninsular Malaysia. Data were collected from 64 smallholders who were categorised into three income groups. Six challenge dimensions were assessed: replanting, labour shortage, sustainability compliance, productivity and tree age, production costs, and global competition. The Kruskal-Wallis H test was used to examine differences across income categories. Results showed limited variation in perceived challenges, with no statistically significant differences observed among the three income groups. These findings suggest that the challenges identified were experienced across different income levels and may be influenced more by broader structural and industry-wide conditions than by financial capacity alone. The results further indicate that income classification may not fully capture the range of challenges faced by smallholders, highlighting the importance of complementary policy approaches that address common sector-wide constraints. Given the relatively small sample size and cross-sectional design, the findings were interpreted as preliminary and that are not generalisable to the wider Malaysian smallholder population.