SOCIO-ECONOMIC IMPACTS OF OIL PALM PLANTATIONS IN MALAYSIA: A REVIEW OF ECONOMIC AND ENVIRONMENTAL PERSPECTIVES

Abstract

Oil palm has a significant role in the Malaysian economy, contributing 2.7% of the national gross domestic product (GDP) in 2020. This crop creates job opportunities, produces stable income, and improves the socio-economic status of the farmers. Despite the good impacts on economic and social perspectives, oil palm upstream activities were linked to various environmental impacts such as deforestation, fragmentation of tropical forests, soil erosion, wildlife habitat destruction, carbon and methane emissions, and peatland conversion. The goal of this study is to review the existing studies and findings on the impacts of oil palm plantation activities on Malaysian socio-economic status for the last decade (2011 - 2024). This paper focuses on the economic and environmental impacts of oil palm plantation activities. We applied the desktop study method to search for secondary data such as academic papers and reports from online databases. Most papers opined that oil palm upstream activities have positive impacts on the economy of Malaysia but are linked with negative impacts from environmental perspectives. Most papers also proposed that sustainable practices and certification in oil palm upstream activities are important approaches to reducing and managing environmental impacts. Strong commitment from the government and stakeholders was needed to tighten the policies on oil palm expansion, sustainable plantation practices, and forest conservation.