Implement Business Model

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Palm oil smallholders are still in difficulties in term of acquiring new technologies, practicing best farm management practices, lack of financial resources and income as well as the financial ability to buy high quality fertilizers (Nagiah & Azmi, 2012; Farouque & Takeya, 2007). Recently, Azhar Ahmad et al., (2017) revealed that almost 70 percent of palm oil smallholders whom involved in business activities gained gross incomes below RM2,000 per month or RM70 per day.

MPOB and other agricultural development organizations had established some proactive measures to improve palm oil smallholder’s income such as Skim Intensif Integrasi Tanaman Dengan Sawit (ITA), Skim Insentif Integrasi Ternakan Dengan Sawit (ITE) and Smallholders Cooperative Programme. However, the improvement of the participants’ economy is still at the minimal stage. Coincidently, round 35 per cent of all palm oil cultivation in Malaysia is done by small farmers and families on small scale plantations.

Palm oil smallholders involvement in other related business activities should be able to improve their personal and family income. However, past performance from those activities are still not achieve the fruitful level.  Therefore, from our point of view, palm oil smallholders must have entrepreneurial orientation (EO) and certain positive internal characteristics to support or enhanced their achievement in such agricultural based activities and projects.  

This proposal includes the implementation of recommended Business Models that are relevant to the smallholders communities in Sarawak and Perak. The business models are designed from feedbacks gathered by the communities.  “Bottom-up approach” by getting community input to select and choose is important towards sustainable development (Fraser, et al., 2004). In addition, several sub-projects are conducted to complement the implementation of the Business Models. In order to improve the smallholders ability in managing their business activies, relevant factors such as entrepreneurialship orientation, financial literacy and supply chain are also studied.

For further information: azah@ukm.edu.my

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