May 27, 2025
KOTA KINABALU – ALU: Amid ongoing scrutiny over the European Union’s decision to label Malaysia a “standard risk” under its deforestation rules, the government is focusing on sustainability and support for smallholders in the shift towards greener practices.
Plantation and Commodities Minister Datuk Seri Johari Abdul Ghani said Malaysia is actively working to ensure that its sustainability certification systems, such as the Malaysian Sustainable Palm Oil (MSPO) standard, are accessible to and inclusive of small-scale farmers.
“What we want to do now is ensure the MSPO standards can also embrace smallholders. As of today, about 85% of our smallholders are able to comply.
“They do not have mills or refineries, but they produce the fruits. We help integrate them into the supply chain and justify their compliance,” he told reporters after launching the Malaysia International Cocoa Fair 2025 (MICF 2025) here yesterday.
His remarks follow strong reactions from industry leaders, who have described the EU Deforestation Regulation (EUDR) classification as “unjust” and damaging to the livelihoods of Malaysian producers, especially smallholders.
Malaysian Palm Oil Council chairman Datuk Carl Bek-Nielsen previously likened the classification to “getting slapped with a fine for speeding while you have been driving below the speed limit”, calling it a blow to an industry that has significantly reduced its environmental footprint.
In acknowledging that Malaysia must still comply with EUDR, Johari said it needs to be done even if enforcement is not yet in effect.
However, he stressed that many of Malaysia’s major exporters already operate within a fully traceable and sustainable supply chain.
“A large portion of our products are exported to Europe because many of our players are large companies. These companies own the entire supply chain, from plantations, mills, and refineries to oleochemical plants, so they have full control and are able to meet export requirements,” he added.
In addition to palm oil, he said, cocoa farmers are also being brought into the fold.
“I have instructed the Malaysian Cocoa Board to ensure all smallholders are registered. Every cocoa plantation must be certified. If they hold land grants from the state government, great; if not, they need to apply,” he said.
Johari made it clear that the government is committed to halting deforestation, stating that any expansion in agriculture must take place on existing land.
“We must use existing land and increase yields through good agricultural practices and high-quality planting materials. That is the only way we can double our yield per hectare,” he said.
Despite Malaysia’s ongoing efforts, the EU’s decision to classify the country as “standard risk” has prompted questions about fairness and transparency, as the classification could result in greater scrutiny and higher compliance costs for exporters.
Still, Johari remains optimistic, adding, “Actually, our certification is already recognised. Currently, we are classified under ‘standard risk’, but we are working on improving this. We aim for recognition of our sustainability and traceability systems.”
Earlier in his speech, he said representatives from the EU are expected to visit Malaysia in September or October to observe local practices and assess the country’s regulatory readiness.
“I have also encouraged all commodity players in Malaysia, whether in palm oil, rubber or cocoa, to adopt sustainability practices if they wish to export,” he said.
The push to improve sustainability systems, particularly for smallholders, is seen as essential not only for meeting international standards but also for protecting livelihoods and ensuring the long-term growth of Malaysia’s commodity sectors.
Also present were Deputy Plantation and Commodities Minister Datuk Chan Foong Hin and Malaysian Cocoa Board chairman Datuk Matbali Musah.