Land ownership issue and its implications for smallholder productivity: The case of oil palm smallholders in Lahad Datu, Sabah

Oil palm industry is immensely helped by improved productivity of smallholders. In Malaysia with an area of less than 100 hectares smallholder output had often exceeded the targets set by oil palm development agencies such as the Malaysia Palm Oil Board (MPOB). Lahad Datu in Sabah, however, had been an exception. Here smallholders could only achieved 14 tons instead of the targetted 22 tonnes per hectare set by MPOB in spite of numerous alternative strategies undertaken by MPOB. This study probed the causes of the Lahad Datu’s smallholders’ persistent low productivity using institutional approach and in-depth interviews with small farmers and related personnel there. The analysis found that there were both formal and informal causes. The formal causes related to land ownership which lacked clarity and suffered from overlapping tenure conditions which complicated smallholder application for new planting. The informal caurces ranged from landowners’ unfavourable attitudes which included fear that the holdings might be taken up by the beneficiaries, to uncertain knowledge of land ownership.