Independent Smallholders' Perceptions towards MSPO Certification in Sabah, Malaysia

Abstract

In a wake of concern towards sustainable palm oil products, the Malaysian government had continuously formulated various guidelines for palm oil industries in fulfilling the international sustainability requirement. In 2013, Malaysia has launched Malaysian sustainable palm oil (MSPO), which eventually become mandatory requirement in January 2020, including the independent smallholders. However, the numbers of independent smallholders that acquired MSPO was relatively low, stood at 30.66%. Therefore, this study aims to analyse the perceptions of independent smallholders towards MSPO in Malaysia. A structured questionnaire was used for data collection instrument that been distributed among 350 independent smallholders, with a response rate of 74.5%. Results from descriptive analysis showed that independent smallholders have a good perception towards MSPO certification. Furthermore, multiple regression analysis revealed that all three factors were significant to influence the perceptions, where the risk perception became the most important contributor. This study enhances the awareness of sustainability practices among independent smallholders and contributes to the implementation of MSPO certification. Since risk perception has emerged as the primary contributor, regulators or governing bodies must seriously consider risk mitigation concerning independent smallholders about risk exposure such as continuous monitoring to comply environment impact assessment requirement, improve the availability and accessibility of information and aggressive awareness campaign on MSPO.

Factors Influencing the Malaysian Sustainable Palm Oil (MSPO) Certification Process During the Certification Phase for Independent Smallholders

“…Additionally, most of the respondents were over the age of 55. This result supports the claim made by Abdullah et al (2022) that it is difficult for independent smallholders to adhere to the principles and standards because they are getting older. The differences in independent smallholders' assessments of MSPO certification might be directly attributed to financial incentives, training and skill development, and risk perception (Abdullah et al, 2022).…”

“…This result supports the claim made by Abdullah et al (2022) that it is difficult for independent smallholders to adhere to the principles and standards because they are getting older. The differences in independent smallholders' assessments of MSPO certification might be directly attributed to financial incentives, training and skill development, and risk perception (Abdullah et al, 2022). This is in agreement with Rosearnida et al (2019), who mentioned that independent smallholders should be familiar with the key areas of MSPO standard.…”

“…Consequently, the independent smallholders are having a hard time selling their fresh fruit bunches (FFB) to the dealers as they have not complied with the criteria and requirements for sustainability certification. As reported by Abdullah et al (2022), only 30.66% of Malaysia's 260,352 independent smallholders have acquired MSPO, which is a relatively low percentage. However, due to the length of time needed for each activity during the certification phase, the actual MSPO certification process may vary among independent smallholders in Malaysia.…”

Risk Management Literacy Level among Oil Palm Smallholders in Malaysia

“…It includes risk communication, risk knowledge, risk attitude as well as developing required skills (Nikiforidou et al, 2012). Furthermore, the items in Part B were adapted from several previous studies (Safriyana et al, 2018;Abdullah et al, 2022;Nur Nadia & Nur Ain, 2022;Mulyasari et al, 2023), as research on risk management literacy among oil palm smallholders is limited. All collected data were tested to determine the level of reliability using Cronbach's alpha value, where a value greater than 0.7 indicates consistent results (Bond & Fox, 2015;Taber, 2018).…”