Factors Affecting Independent Oil Palm Smallholder’s Decision to Participate in Government Replanting Assistance Scheme in Malaysia

The Malaysian government has introduced the replanting assistance scheme under the National Key Economic Areas (NKEA) program to accelerate the oil palm replanting activities among smallholders. This program intends to accelerate the ongoing replanting efforts by smallholders to replace their low-yield and old oil palm trees with new and high-yielding oil palm seedlings. However, their participation in the scheme is low. Therefore, this study is conducted to determine the factors that affect independent oil palm smallholders’ decisions to participate in the replanting assistance scheme. Interview administrated questionnaires are employed to 375 respondents among the recipients of the replanting assistance scheme. The significant factors that affect smallholders’ decisions are the Fresh Fruit Bunches (FFB) selling price, influence from family members or business peers and long-term investment choice. This study also describes the cross-tabulation of respondents’ age and their employment status against these factors. This research is expected to help policymakers and the government realign the timing to introduce the replanting scheme at the right time for the right target groups of oil palm smallholders.