Malaysia is one of the world’s leading producers of palm oil, with approximately 5,612,852 hectares under oil palm cultivation in year 2024. These plantations are managed by a mix of private and government agency estates, independent smallholders and organised smallholders. Notably, independent smallholders contribute around 14.56%, equivalent to 818,678 hectares, of the total plantation area. However, a significant portion around 30-40% of smallholders’ trees are over 20 years old. These trees are in the ageing phase, where yields decline significantly and maintenance becomes more difficult due to increased tree height and reduced productivity. This directly affects smallholders’ income, as lower yields translate to reduced harvest volumes and profits. In year 2023, the estimated monthly net income of smallholders is only around RM429, depending on yield and market prices. With ageing trees and inconsistent production, many earn even less, making it difficult to sustain their livelihoods or invest in replanting. Addressing this income gap is critical to ensuring the long-term viability of independent smallholders in Malaysia’s palm oil sector.

In 2024, replanting efforts covered only 114,000 hectares (2%), a decrease from 132,000 hectares (2.3%) in 2023, falling short of the recommended annual target of 4–5% (285,000 hectares). This stagnation in replanting underscores a critical issue where expanding plantation land is no longer a viable option, and improving productivity through strategic replanting is essential. The issue is further compounded by the high cost of replanting, a three-year income gap, and a lack of knowledge support systems. Many smallholders delay replanting when crude palm oil (CPO) prices are high, opting to continue harvesting low-yielding aged trees instead of investing in long-term sustainability. Additionally, they contend with rising and unpredictable costs for fertilizers, labor, weedicides, and seedlings, while also needing to comply with Malaysian Sustainable Palm Oil (MSPO) certification requirements. These challenges are further compounded by external pressures such as climate change, biodiesel mandates, and taxation from competing markets like Indonesia. In addition to replanting, there is a pressing need to integrate crops and livestock into oil palm plantations to diversify income sources and enhance resilience. Crops and livestock integration can provide alternative revenue streams during the unproductive replanting phase, improve land-use efficiency, and contribute to food security.

Malaysian oil palm smallholders are caught in a strategic dilemma, facing multiple overlapping challenges that hinder their ability to make informed, sustainable decisions. Without access to effective decision-making tools, they struggle to manage plantation cycles and optimize income especially when navigating complex choices such as whether to engage in new planting, replant ageing trees, maintain mature palms, or adopt integrated crop and livestock systems. These decisions are critical, as replanting and crop-livestock integration are not just alternatives, but essential strategies for boosting income, enhancing land productivity, and empowering smallholders toward long-term sustainability and resilience.

However, in the absence of a suitable, context-specific decision support system, smallholders often operate with limited guidance, leading to delayed replanting, suboptimal yields, declining profits, and unsustainable land use practices. While existing decision support systems do exist, they are largely designed for large-scale estates and fail to address the unique operational, economic, and informational needs of smallholders. This study addresses the urgent need for a dedicated decision-making tool tailored to Malaysian independent oil palm smallholders, leveraging Causal Loop Diagrams (CLD) within the System Dynamics (SD) modelling framework. Smallholders face complex decisions whether to replant, maintain existing trees, or integrate crops and livestock, all while navigating internal challenges like input costs, labour availability, and MSPO compliance, alongside external pressures such as climate change, fluctuating market demand, and international competition. The proposed tool will support smallholders in identifying optimal replanting areas and integrating crop-livestock systems to boost income and ensure long-term sustainability. By analyzing key pushing and pulling factors that influence income, the tool will provide a holistic view of the plantation system, empowering smallholders to make informed, strategic decisions.

The study will adopt a multi-step approach: (i) conducting expert interviews and literature reviews to identify causal factors; (ii) developing CLDs to map feedback loops and interdependencies in planting and integration decisions; (iii) applying simulation modelling to examine dynamic interactions between plantation phases, economic conditions, policy impacts, and environmental trends; and (iv) designing a user-friendly decision support with CLD interface specifically for smallholders. Ultimately, this tool aims to close a significant gap in agricultural planning support system, promoting resilience, productivity, and inclusive growth within Malaysia’s palm oil sector.

In terms of expected outputs and outcomes, a comprehensive CLD model illustrating causal relationships between key factors affecting oil palm plantation and crops and livestocks decisions. A functional decision support system (DSS) platform, enabling smallholders to evaluate the economic viability of replanting vs. continuing with ageing trees and crops and ivestocks decisions as business potential, simulate the impact of various economic and agronomic scenarios, strategically plan replanting schedules aligned with government targets and personal investment goals. Policy insights for governmental and non-governmental bodies to craft targeted interventions, incentives, and training programs. Awareness and training modules to build the capacity of smallholders in system thinking and sustainable plantation management. This research has the potential to transform the smallholder plantation landscape in Malaysia by addressing core challenges in productivity, sustainability, and profitability.

This DSS empowers smallholders with knowledge-driven tools, enabling evidence-based decision-making in line with the Malaysia MADANI Framework. It promotes inclusivity, sustainable economic development, and citizen empowerment by equipping smallholders who are often among the more vulnerable rural populations with the means to enhance income and build self-reliance. The study also supports Goal 2, Zero Hunger of Sustainable Development Goal (SDG), by improving the productivity and profitability of smallholders, thereby contributing to sustainable food systems and rural development. In relation to SDG 8, Decent Work and Economic Growth, the project helps generate higher returns from plantations, directly improving smallholder livelihoods and strengthening rural economies. Furthermore, it aligns with the MySTIE 10-10 Framework, addressing key strategic domains such as Agriculture and Forestry, and leveraging core technology drivers including Advanced Modeling and Simulation, Sustainability Science, and Smart Farming Technologies.