INVEST OR NOT IN PALM OIL PLANTATION? A SOLUTION WITH MALAYSIAN OIL PALM PLANTATION INVESTMENT DECISION SUPPORT SYSTEM (MYOPPIDEX)
Malaysia has approximately 5.849 million hectares of oil palm plantation areas recorded in 2019 (MPOB, 2019). The plantation areas are managed by the government agencies, private sectors and independent smallholders. The largest percentage is owned by private estates with 61 percent while government related agencies own 23 percent of the total plantation area. The independent smallholders on the other hand account for 16.8 percent or approximately 979,892 hectares of total plantation area (MPOB, 2019). As compared to the government agencies and private sectors, independent smallholders face difficulties in planning their planting strategies due to their lack of resources in planning system. Their impact on the overall palm oil production is rather substantial given the 16.8 percent of plantation area owned. Further, the influence of external uncertainties like the price of crude palm oil (CPO), government policies, and climate changes add to the complexity in the sector. Due to these difficulties, their planting decision is always based on the trial-and-error basis as well as past experience. This decision has led to lower than average fresh fruit bunch (FFB) yield which directly will affect their income.
This paper presents the development of a decision support system that can assist oil palm plantation smallholders in evaluating their future planting strategies by considering various economic scenarios towards the investment decision, either they should invest or not in planting the oil palm trees. This system is also able to determine the amount of profit they will get from their investment.