ISU DAN CABARAN SEKTOR HULUAN DAN HILIRAN INDUSTRI SAWIT.

The development of the oil palm industry in Malaysia began in 1917 with the establishment of the first oil palm plantation in Tennamaran, Selangor. Subsequently, the establishment of oil palm plantations increased dramatically in the early 1960s when FELDA opened up large-scale plantations in line with the Government's policy to eradicate poverty. Presently, oil palm has become one of Malaysia's most important commodity crops. The value chain of the palm oil industry is divided into three segments, namely upstream, midstream, and downstream sectors. The upstream sector consists of seedling preparation activities, planting, and harvesting of fresh fruits bunches (FFBs). The midstream sector is the manufacturing process that involves the processing and refining of FFB which is harvested from the plantation or collected from smallholders to produce crude palm oil. Eventually, crude palm oil will be further treated in the downstream sector to be stored or marketed either domestically or exported before eventually reaching the consumers. The final product is usually a food product. Albeit the various successes achieved by the palm oil industry within the 100 years of progress in Malaysia, there are various issues and challenges faced by the country's palm oil industry. As such, this study aims to (i) identify the main issues and challenges of Malaysia's palm oil upstream, midstream, and downstream sectors and (ii) carry out comparisons related to the key issues and challenges of the Indonesian palm oil industry as Malaysia's main competitor. This study applied the qualitative approach in investigating issues and challenges of the upstream, midstream, and downstream sectors of the palm oil industry. In-depth, interviews were employed as the main research instrument, and document analysis was conducted to support the results obtained from the in-depth interview. The study found that among the main issues of the country's palm oil industry are labor shortages, environmental sustainability of oil palm plantation and palm oil manufacturing, negative perceptions towards palm oil from the international community, and trade barriers. These issues and challenges need to be addressed effectively, including diplomatic relations as well as increasing consumer confidence in palm oil products, which requires a strategic approach. [ABSTRACT FROM AUTHOR]