Malaysia launches RM200 million loan scheme for oil-palm replanting and raises rubber incentive
The government will provide RM200 million in easy financing for smallholders to replant oil palm on up to 40 hectares, with a four-year repayment deferment. It also increased the rubber production incentive to RM3.30 per kilogram.
During the 2027 Budget presentation, Prime Minister Datuk Seri Anwar Ibrahim unveiled a RM200 million financing package aimed at smallholders needing to replant oil palm on plots of up to 40 hectares, with loan repayments deferred for four years while trees mature. The government will absorb the bulk of the interest cost. He also announced a third increase to the rubber production incentive, raising the IPG to RM3.30 per kilogram and extending benefits to over 300,000 smallholders.
As of September 2026, 290,000 smallholders receive a monthly RM400 subsidy covering various crops. The budget earmarks RM1.26 billion for FELDA’s financial health, road upkeep and new housing, noting that 109,000 settlers now own land and average net income rose from RM2,272 in 2023 to RM3,800 in 2026. The delisting of FGV Holding Bhd was cited as further strengthening FELDA’s balance sheet.
