History of the Industry

The palm oil industry in Malaysia has evolved dramatically since the first commercial planting took place in Tennamaran Estate in Selangor in 1917, laying the foundations for the industry in Malaysia. The cultivation of oil palm increased at a fast pace in early 1960s under the government’s agricultural diversification programme, which was introduced to reduce the country’s economic dependence on rubber and tin.

In the 1960s, the government introduced land settlement schemes for planting oil palm as a means to eradicate poverty for the landless farmers and smallholders. Development of the industry has been central to increased prosperity and societal advancement throughout the country, from the rural communities that rely on employment from the plantations, to the downstream industries that extend to city centers and export zones.

Today, the industry directly employs more than 570,000 people, and contributed US$21.09 billion to Malaysia’s exports. More than 39 percent of oil palm plantations are owned by small land holders, and has contributed to one of the largest poverty alleviation projects in the world through the Federal Land and Development Authority (FELDA).

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