Malaysia launches RM200 million palm oil replanting program

The Malaysian government has introduced the Palm Oil Replanting Financing Program (PTSS) as part of Budget 2027, allocating RM200 million to assist smallholders in replacing aging palm oil trees with more productive crops.

Minister of Plantation and Commodities Noraini Ahmad stated that the PTSS offers easy financing with a four-year repayment moratorium to account for the period before new trees bear fruit. Borrowers will face a two percent interest rate, with the remaining interest covered by the government. This program is designed for individuals and companies managing plantations between 10 and 40.46 hectares. It complements the existing TSPKS 2.0 program, which provides hybrid financing (50 percent grant and 50 percent loan) for those with 10 hectares or less.

In response, Adzmi Hassan, President of the National Association of Smallholders Malaysia (PKPKM), welcomed the initiative but urged the government to consider increasing aid to 100 percent. He noted that the high costs of clearing land, seedlings, and agricultural inputs, combined with the loss of income during the maturation period, pose significant financial risks. Hassan also suggested reviewing the 0.5-hectare minimum land ownership requirement to include active smallholders with smaller plots.