Small Farms, Big Impact: The Challenging Role of Smallholder Farmers in Malaysia’s Agro-Economy

Small Farms, Big Impact: The Challenging Role of Smallholder Farmers in Malaysia’s Agro-Economy

Herwina Rosnan¹* Siti Qausar Mohd Shuraddin² and Norol Hamiza Zamzuri³

^1,2Arshad Ayub Graduate Business School, Universiti Teknologi MARA, 40450 Shah Alam, Malaysia

³Eco World Development Group Berhad Faculty of Business and Management, Universiti Teknologi MARA, 42300 Puncak Alam, Malaysia

*Corresponding Author

DOI: https://dx.doi.org/10.47772/IJRISS.2025.915EC0059

Received: 05 June 2025; Accepted: 12 June 2025; Published: 18 July 2025

ABSTRACT

Smallholder farmers are a cornerstone of Malaysia’s agricultural landscape, contributing significantly to food security, rural employment, and the national economy. Despite their importance role, they face numerous structural and systemic challenges including limited market access, inconsistent policy support, and increased vulnerability to climate. These challenges underscore the need for a coherent conceptual framework that integrates institutional, environmental, and socio-economic dimensions of smallholder farming in Malaysia. Current interventions targeting smallholder farmers are fragmented and often reactive, lacking a unifying theoretical foundation to guide long-term planning and evaluation. Existing studies tend to isolate issues such as technological adoption, land tenure, or subsidy allocation without accounting for their interdependencies. This conceptual gap limits the effectiveness of agricultural development strategies and inhibits transformative change at the grassroots level. This review synthesizes existing literature on smallholder farming in Malaysia to identify key structural, institutional, and environmental factors influencing smallholder success. It also develops a Theory of Change (ToC) framework that captures the causal pathways and strategic interventions necessary for sustainable smallholder development. This study offers an integrated conceptual framework that can guide policymakers, researchers, and practitioners in designing targeted, evidence-based interventions for smallholder farmers. It fills a crucial theoretical void by proposing a context-specific Theory of Change that aligns with Malaysia’s rural development and food security goals.

Keywords: Smallholder Farmers, Challenges, Agro-economics, Theory of Change, Malaysia.

INTRODUCTION

Smallholder farmers play a vital role in global agricultural production, contributing up to 80% of the food supply in Asia and sub-Saharan Africa (Food and Agriculture Organization [FAO], 2021). In Malaysia, smallholder farmers form the backbone of the rural agricultural sector, engaging in the cultivation of essential commodities such as rice, vegetables, fruits, and oil palm. Despite their significant contribution to national food security and rural livelihoods, smallholders often operate under precarious conditions marked by limited access to resources, volatile markets, and environmental risks (World Bank, 2021).

Among the concerns for the livelihood of smallholder farmers is the intention to mitigate poverty and food insecurity among vulnerable populations. Additionally, this focus supports the identification of key factors that determine food safety. Small-scale farmers frequently face a range of challenges that limit their productivity and sustainability. This includes systemic limitations within the agricultural framework, geographic isolation, fluctuating weather patterns, and regulatory policies that may either improve or worsen their socioeconomic conditions (FAO, 2021). First, the systemic limitations within the agricultural framework, such as inadequate access to markets, limited financial services, insufficient agricultural extension support, and weak infrastructure, can prevent farmers from adopting modern technologies and scaling production effectively (World Bank, 2021). These constraints are often rooted in institutional inefficiencies and underinvestment in rural agricultural systems. Second, geographic isolation significantly restricts access to critical inputs, timely information, and market opportunities. Farmers in remote areas face high transportation costs and logistical challenges that hinder the delivery of goods and services, affecting both their income and resilience (Barrett, 2008). This isolation also contributes to their exclusion from policy dialogues and development initiatives. Third, fluctuating weather patterns, often exacerbated by climate change, increase the unpredictability of farming outcomes. Smallholders typically rely on rain-fed agriculture, making them highly vulnerable to droughts, floods, and shifting growing seasons, which can lead to crop failure, income loss, and food insecurity (IPCC, 2022). Finally, regulatory policies can play a dual role. While supportive policies such as subsidies, price supports, or land rights protections can empower farmers, overly bureaucratic, inconsistent, or exclusionary regulations may instead create barriers to entry and distort market incentives (OECD, 2020). For example, stringent certification requirements or poorly designed subsidy schemes can inadvertently marginalize smallholders.

The Malaysian agricultural sector is undergoing a transformation amid increasing demands for food sovereignty, climate resilience, and sustainability. However, smallholders remain marginalized in terms of investment, innovation diffusion, and policy inclusion (Khor, 2020). These challenges are exacerbated by systemic limitations within the agricultural framework, including inadequate infrastructure, restricted access to finance and technology, and insufficient agricultural extension services (Economic Planning Unit [EPU], 2023). Furthermore, geographic isolation and fragmented landholdings often hinder smallholders’ ability to integrate into modern value chains or benefit from economies of scale (Barrett, 2008).

Smallholder farmers potentials are constrained by persistent systemic challenges such as limited market access, inconsistent policy support, and growing climate vulnerability (Ahmad et al., 2024; Hussin & Mat, 2013). While various interventions have been introduced to support this group, they remain largely fragmented and reactive, lacking a coherent conceptual framework to guide long-term, integrated strategies (Kamarudin & Rashid, 2020). Most existing studies address isolated issues such as technological adoption, land tenure, or financial assistance without adequately accounting for their complex interdependencies, resulting in limited transformative impact at the grassroots level. Given the growing emphasis on inclusive rural development, environmental sustainability, and national food resilience, it is imperative to reassess and elevate the role of smallholder farmers in Malaysia. This study seeks to address that conceptual gap by synthesizing current literature and identifying the key structural challenges, institutional, and environmental factors influencing the resilience and success of smallholder farmers in Malaysia.

LITERATURE REVIEW

Agro-Economy and Smallholder Farmers

Agro-economy or agricultural economics focuses on applying economic principles to the production, distribution, and consumption of agricultural goods and services. It includes, among others, how resources are allocated within the agricultural sector, the impact of policies on farming, and the relationship between agriculture and broader economic systems (Penson et al., 2015). Smallholder farmers play a crucial role in Malaysia’s agro-economy, significantly contributing to food security, economic growth, and sustainable agricultural practices.

Social Issues and Farmer Welfare

A significant body of research highlights the social challenges faced by smallholder farmers in Malaysia, especially those involved in oil palm production. Siti-Dina et al. conduct a systematic review that identifies key themes such as the welfare of smallholder farmers, their educational needs, and attitudes towards sustainable farming practices Siti-Dina et al. (2023). The review indicates that a lack of education and awareness significantly limits the potential of smallholders to engage with fully and benefit from modern agricultural techniques. This suggests a pressing need for targeted educational programs designed to enhance skills and knowledge among smallholder farmers.

Furthermore, Abiddin et al. elaborate on the diverse backgrounds of smallholder farmers and the economic constraints that affect their livelihoods (Abiddin et al., 2023). The disparities in access to resources, technical knowledge about best farming practices, and capacity for market engagement underscore the need for comprehensive support systems to enhance the welfare of smallholder farmers. A critical approach to understanding these social dynamics highlights the role of community networks and cooperative initiatives in enhancing farmers’ operational capabilities.

Technological Adoption and Innovation

The transition to modern agricultural practices through the adoption of technology is imperative for increasing productivity among smallholder farmers. However, Nordin et al. underscore that while smallholders recognize the benefits of green fertilizer technology, they often lack the essential technical knowledge and resources for effective implementation (Nordin et al., 2023). This gap necessitates the development of robust training and support frameworks that not only introduce new technologies but also enable farmers to utilize them effectively.

Similarly, the study by Omar et al. (2024) reveals a significant challenge related to the lack of collaboration and knowledge sharing within the agricultural community, which hinders the dissemination of important innovative farming technologies among smallholders. Addressing these challenges through institutional support and community-based learning initiatives could enhance productivity and adaptability in this sector.

Government Initiatives and Contract Farming

Government policies and initiatives play a crucial role in facilitating the growth and stability of smallholder agriculture. Baqutayan et al. highlight the implementation of contract farming as a means to stimulate agricultural production and provide smallholders with access to high-value markets (Baqutayan et al., 2021). This structure not only enhances income opportunities for farmers but also sets standards for product quality, thereby integrating smallholders into modern supply chains. However, it requires that farmers are adequately supported to ensure compliance with contractual obligations.

Furthermore, the potential of agricultural microinsurance schemes, as discussed by Salleh et al., emphasizes the importance of financial instruments designed to protect smallholders from the risks associated with climate change and price volatility (Salleh et al., 2023). By introducing mechanisms that safeguard against unforeseen losses, these initiatives can bolster the resilience of small farmers and contribute to sustainable economic growth.

Environmental Pressures

Environmental challenges significantly impact the agro-economy in Malaysia, especially for smallholders who often work under precarious conditions due to climate change. A study by Ghazi et al. (2023) examines the detrimental effects of pests and diseases on the production levels of smallholder pineapple farmers, highlighting the urgent need for integrated pest management strategies. Such environmental pressures require smallholders to adopt sustainable practices that not only mitigate risks but also ensure the long-term viability of their farming enterprises.

In addition, the pressures of climate change have been exacerbated by socio-economic challenges, compelling smallholder farmers to constantly adapt. The findings by Jugah et al. regarding the potential of oil palm smallholders to innovate and diversify reveal that a focus on sustainable practices is crucial for maintaining productivity amidst these challenges (Jugah et al., 2024). Therefore, enhancing environmental knowledge among smallholders can foster better management of natural resources and promote resilience against environmental stresses.

Economic Viability and Market Access

The economic viability of smallholder farms is heavily influenced by their access to market opportunities. Ratnasingam et al. provide insights into the limited participation of smallholders in commercial markets, often due to inadequate infrastructure and resources that hinder their competitiveness (Ratnasingam et al., 2021). For smallholders to fully realize their potential in Malaysia’s agro-economy, concerted efforts must be made to enhance their market access, supported by adequate infrastructure and local demand for their products.

Moreover, integrating smallholder farmers into formal supply chains can provide additional economic benefits. As discussed by Reiss-Woolever et al. (2025), considering the socio-economic backgrounds and attitudes of smallholder farmers in management programs is essential for facilitating their participation and ensuring sustainable agricultural practices. Therefore, creating market pathways that acknowledge the contributions of smallholders is pivotal for enhancing their economic prospects.

Smallholder Farmers and Food Security

The literature on food security in Malaysia underscores the significant role played by small farmers in contributing to national food security, particularly in the context of a rapidly evolving agricultural landscape influenced by socio-economic and environmental factors.

The current focus on food security in Malaysia goes beyond merely the agricultural production of staples like rice, reflecting a broader understanding that includes nutritional security and sustainable practices. A recent study by Sultan et al. (2024) emphasizes the crucial role of integrated farming systems, which foster collaboration between universities and smallholder farmers to enhance productivity and promote sustainable agricultural practices essential for food security. This integrated approach addresses productivity challenges while simultaneously encouraging rural development, demonstrating the multi-faceted benefits of engaging small farmers in cooperative educational initiatives.

The challenges faced by small-scale beef cattle farmers underline the complex landscape of agricultural production in Malaysia. Abdullah et al. delineate the barriers to adopting innovative practices aimed at improving food security and sustainability within the beef sector, emphasizing that interventions must be tailored to the unique challenges of small farmers while providing infrastructural support and access to innovative technologies (Abdullah et al., 2022). Their review reveals that enhancing the economic activity of small farmers can play a pivotal role in establishing a sustainable food system that contributes to national food security.

In addition to traditional farming methods, the need for diversification has emerged as a vital strategy for ensuring food security. The findings of Alam et al. (2015) suggest a historical emphasis on rice self-sufficiency in governmental policies; however, they advocate for a more holistic approach that encompasses a broader range of agricultural production, including crop diversification to enhance food access and availability. Smallholder farmers can leverage crop diversification to stabilize their incomes and enhance their resilience against fluctuating market conditions or adverse weather events, leading to improved food security on multiple fronts.

Urban farming represents another dimension of the food security discourse in Malaysia. Urban food security has emerged as a crucial policy area, particularly in the wake of the COVID-19 pandemic, which exposed vulnerabilities in food supply chains. Murdad et al. argue that urban farming offers a viable solution to mitigate crises stemming from food insecurity in urban contexts by enhancing local food production (Murdad et al., 2022). Small farmers in urban settings face unique challenges, yet they can make a significant contribution to reducing reliance on imported food products, thereby enhancing urban resilience against food shortages. In addition, Zulkarnain et al. (2025) emphasize the need for effective governmental policies that support urban agricultural initiatives through sustainable land-use practices, which are essential for ensuring that urban areas meet their food needs without compromising environmental sustainability. Small farmers can play a crucial role in urban food systems, not only by providing fresh produce but also by contributing to community resilience and food sovereignty. Food sovereignty has been positioned as a transformative framework within broader debates on food security. Food sovereignty encompasses three interrelated dimensions: the right to produce, the right to access food, and the right to define food systems (Moyo & Thow, 2020). In brevity, food sovereignty embodies a critical discourse that combines environmental sustainability, social justice, and the right to self-determination within food systems.

The historical context of food security in Malaysia has often involved state-led strategies centered around commodity crops; however, recent shifts indicate a growing emphasis on recognizing the contributions of smallholder farmers to local food systems. Wardani et al. illustrate how local food practices among smallholders reflect a complex relationship between cultural values and food security outcomes (Wardani et al., 2023). These farmers are not merely producers but also custodians of traditional agricultural practices that can enhance biodiversity and resilience in food systems.

Moreover, the vulnerabilities faced by smallholders, including climatic pressures and economic instability, necessitate supportive frameworks. Ibrahim finds a direct link between household livelihood security and food security, suggesting that enhancing educational, financial, and resource access for small farmers can yield significant improvements in food security outcomes for their communities (Ibrahim, 2024). This connection underscores the systemic nature of food security, wherein smallholder agriculture is interlinked with broader socioeconomic structures and policy environments.

Various studies emphasize that the contributions of smallholder farms to food and nutrition security must be understood in the context of territorial food systems. Territorial food systems encapsulate a comprehensive understanding of food as an integral part of community life, that food is not merely a commodified product but is deeply embedded in the social, environmental, and economic fabric of a community Rochefort et al. (2021). It involves various stakeholders, including farmers, consumers, and policymakers, who collaborate to enhance the sustainability and resilience of food systems in their territories. Small farmers not only engage in food production but also significantly impact local economies and the availability of diverse food options, directly affecting nutritional outcomes for consumers (Galli et al., 2020). This alignment of local food systems with smallholder production enhances both food diversity and security, highlighting the essential role of small farmers in achieving national food security goals.

The role of education and training in improving food security among smallholders cannot be underestimated. Training programs that incorporate innovations in agricultural practices are crucial in enhancing productivity and food security. The findings of Saili et al. reinforce this notion, indicating that challenges to implementing innovative farming technologies can be mitigated through targeted training initiatives that empower small-scale farmers in Malaysia (Saili et al., 2024). These programs can lead to sustainable practices that support the long-term viability of small farms.

Smallholder Farmers’ Challenges

Food security in Malaysia presents a multifaceted challenge, influenced by various structural factors, institutional support, environmental pressures, the capacity of smallholder farmers, and the need for dynamic feedback and policy learning. Each of these aspects plays a crucial role in determining how food security issues are addressed, particularly in relation to the significant contributions of small farmers, who comprise a substantial part of the agricultural sector.

Structural Factors: Includes land tenure, market access, infrastructure, and economic barriers.

Institutional Support: Government programs (e.g., MADA, RISDA), policy environments, subsidies, and technical assistance.

Environmental Pressures: Climate variability, pests, disease, and ecological degradation.

Smallholder Farmers’ Capacity: The central node representing their ability to adapt, innovate, and sustain livelihoods.

Outcomes: Encompasses resilience, improved food security, and sustainable rural livelihoods.

Feedback & Policy Learning: Suggests the need for a dynamic policy environment that learns from outcomes and readjusts institutional strategies.

Structural Factors

Land tenure systems, market access, infrastructure, and economic barriers are critical structural factors influencing food security among small farmers in Malaysia. Ratnasingam et al. discuss limited land availability, exacerbated by existing large plantations of rubber and palm oil, which restricts new entries into agricultural sectors and impacts smallholder farmers’ ability to establish themselves and contribute effectively to food security Ratnasingam et al. (2021). This notion reinforces the need for policies that facilitate equitable land access for small farmers, as secure land tenure is vital for farming sustainability and food production.

Market access remains another hurdle for smallholders. The commercialization of oil palm plantations, as articulated by Hou et al., has been particularly challenging due to insufficient resources for independent smallholders to adapt to both short-term and long-term market dynamics (Hou et al., 2024). Furthermore, many smallholders suffer from significant economic barriers, including a lack of knowledge about sustainable practices that would qualify them to enter more lucrative markets for certified palm oil products (Aziz et al., 2021). The identification and removal of these economic barriers are essential to enhancing market access and integrating small farmers into the broader agricultural economy.

Institutional Support

Institutional support, particularly from government initiatives, plays a fundamental role in bolstering food security through programs such as the Agricultural Development Authority (MADA) and the Federal Land Development Authority (FELDA). Aziz et al. emphasize that sound institutional backing should ensure smallholders are equipped with the knowledge and resources to adopt sustainable certifications, enhancing their market presence (Aziz et al., 2021). Moreover, such programs must encompass comprehensive strategies that include training, financial assistance, and reliable channels to share best practices, thus addressing barriers to sustainable farming.

The role of governmental policies is further emphasized by Alam et al., who highlight how historical frameworks centered on self-sufficiency primarily in the rice sector have inadequately addressed broader food security needs (Alam et al., 2015). A more inclusive policy environment that considers a diverse range of crops and engages smallholder farmers as equal partners in policy discussions can lead to more effective food security measures. Furthermore, the introduction of subsidies and support for agricultural innovation, as noted by Siti-Dina et al., could radically transform the prospects for smallholder farmers, ensuring they can meet the growing demand for food products sustainably (Siti-Dina et al., 2023). Despite government’s efforts, smallholders continue to face systemic challenges. A case study on rice farmers in Parit 6 (East), Selangor, identified factors such as strong engagement with government agencies, legal land ownership, and diversification of economic activities as critical for the persistence of smallholders (Kamarudin & Rashid, 2020). In Batu Kurau, Perak, smallholders of durian have shown potential in boosting rural incomes, yet they grapple with inadequate support from local authorities and marketing challenges (Kamal & Berawi, 2022).

Environmental Pressures

Environmental pressures significantly affect the capacity of small farmers to secure their livelihoods and contribute to national food security. Climate variability poses a direct threat to agricultural productivity, as shown in several studies. For instance, Mulyasari et al. underscore the struggles smallholders face due to climate impacts, which can disrupt production cycles and diminish crop yields (Mulyasari et al., 2023). The reliance on rainfed agriculture in many Malaysian regions exacerbates vulnerabilities to unpredictable weather patterns, indicating an urgent need for adaptive farming strategies. Climate change further exacerbates these issues. In regions like Sepang, Selangor, smallholders cultivating crops such as rockmelon face risks from pests, diseases, and weather variability, necessitating effective risk management strategies (Md. Sum & Abu Bakar, 2021).

In this context, Abdullah et al. highlight the importance of risk management literacy among smallholders concerning environmental pressures such as climate change and pest invasions (Abdullah et al., 2024). Without adequate knowledge and tools to anticipate and respond to these threats, smallholder farmers find themselves increasingly at risk. Moreover, understanding pest management and sustainable practices is vital as environmental degradation from unsustainable agricultural practices can significantly hinder productive capacity. Thus, it becomes crucial to combine environmental management with adaptive agricultural techniques as part of the broader food security strategy.

Smallholder Farmers’ Capacity

The capacity of smallholder farmers to adapt and innovate directly influences their success and resilience in the face of challenges. As shown by Yap et al., smallholders play an essential role in enhancing food security through effective participation in agricultural practices, although they often face barriers in adopting new technologies and practices necessary for sustainability (Yap et al., 2023). Training and knowledge sharing, as emphasized by Teklu et al., enhance adaptation to climate changes and other stressors, improving livelihoods and outputs (Teklu et al., 2023).

Additionally, the traditional reliance on subsistence farming limits the potential of smallholders to engage in more profitable agricultural practices. The multifaceted roles of smallholder farmers need to be recognized and bolstered through programs that develop their capabilities in resource management, technology adoption, and access to essential markets. The findings from Ahmed et al. suggest that adequate education and capacity building can enhance not only farmers’ ability to produce but also their resilience against economic and environmental shocks (Abiddin et al., 2023). Technological adoption remains a hurdle. Research in Sarawak and Sabah indicates that high startup costs, lack of expertise, and limited connectivity hinder the adoption of innovative farming technologies among smallholders (Ahmad et al., 2024). Moreover, compliance with sustainability standards such as the Malaysian Sustainable Palm Oil (MSPO) certification presents challenges, particularly in terms of knowledge and financial constraints, as observed in FELDA Lakum, Pahang (Nadzri & Zulkefli, 2018).

Outcomes

The successful navigation of the aforementioned factors can lead to improved outcomes for food security and rural livelihoods in Malaysia. Smallholders contribute significantly to local food systems, and their enhanced resilience can provide the foundation for stronger community ties and healthier populations. The work by Gugissa et al. suggests that building adaptive capacities in smallholder farming strengthens community resilience, which is vital for sustaining food security amidst rapid environmental changes (Gugissa et al., 2022).

By improving food security, these outcomes promote socio-economic stability and reduce rural poverty. It is essential for local policies to incorporate the voices and experiences of smallholder farmers to ensure comprehensive strategies are developed that foster sustainable practices. With increasing acknowledgment of their contributions, small farmers can play a pivotal role in achieving national food security goals while enhancing their livelihoods and overall well-being (Jugah et al., 2024).

Feedback & Policy Learning

Continuous feedback mechanisms and policy learning are fundamental to addressing the complexities of food security in Malaysia. The need for dynamic policies that evolve based on outcomes is endorsed by several scholars who argue for adaptive governance frameworks that can respond proactively to evaluations of food security initiatives (Mekonnen & Kassa, 2019). For instance, the study by Alam et al. points out that system-wide continuous assessment and policy adjustment can significantly enhance food systems resilience in Malaysia through participatory governance (Alam et al., 2017).

Feedback loops that incorporate farmers’ experiences and outcomes are crucial for refining agricultural policies, thereby fostering better support systems for smallholders. The lessons learned from past governmental strategies should inform future policies, ensuring they are not only reactive but also proactive in their aim to address the underlying causes of food insecurity and enhance the livelihoods of smallholder farmers (Abazue et al., 2019). This participatory approach supports the development of a robust agricultural sector that aligns with sustainability goals, ultimately leading to greater food security across Malaysia.

Figure 1: Conceptual Framework of the Integrated Understanding of Smallholder Farmers Challenges in Malaysia

METHODOLOGY

This study adopts a secondary research approach, utilizing existing literature to explore the dynamics affecting smallholder farmers in Malaysia. In light of growing concerns around food security, sustainability, and the economic resilience of the agricultural sector, the research systematically reviews prior studies to uncover enduring challenges and identify emerging trends. Through content analysis, the study distills core themes from the literature, with particular attention to structural and operational barriers such as limited access to capital, inadequate digital competencies, and infrastructural shortcomings. At the same time, it examines the transformative potential of digital technologies in improving farm productivity, enhancing customer interactions, and strengthening market competitiveness.

This literature-driven methodology is especially suited for examining the complex interplay of economic, social, and technological factors influencing smallholder agriculture. It enables a more layered understanding of how Malaysian smallholders operate within the broader national business environment. Additionally, the review considers the impact of external forces—such as governmental policies, climatic changes, and shifting market conditions—on the sector’s development. By synthesizing insights across a diverse range of academic and policy-oriented sources, this study offers a more holistic framework for understanding the multifaceted challenges and opportunities faced by smallholder farmers in Malaysia’s agricultural landscape.

DISCUSSION

Smallholder farmers are integral to Malaysia’s agricultural landscape, making a significant contribution to national food security and rural livelihoods. In 2023, smallholders accounted for approximately 26.4% of the country’s oil palm cultivation area, underscoring their pivotal role in the sector (Pahri, 2024). Beyond oil palm, smallholders are actively engaged in cultivating rice, fruits, and vegetables, often under challenging conditions that include limited access to resources, market volatility, and environmental risks. Notwithstanding, government initiatives have been instrumental in supporting smallholders. The Rubber Industry Smallholders Development Authority (RISDA), established in 1973, aims to enhance the economic well-being of rubber smallholders through various development programs (RISDA, n.d.). Similarly, the Muda Agricultural Development Authority (MADA) has been pivotal in improving the socio-economic status of paddy farmers in regions like Pendang, Kedah, by providing subsidized inputs and infrastructural support (Hussin & Mat, 2013).  However, the economic sustainability of Malaysian smallholders is heavily impaired by exploitative practices from middlemen that distort market prices as found in the case of rubber wood processing (Ratnasingam et al., 2021). This is compounded by a lack of comprehensive supply chain networks, limiting smallholders’ access to lucrative markets. Compared to neighboring Vietnam, where such networks are robust, Malaysian smallholders often face disadvantages due to inadequate infrastructure and support (Ratnasingam et al., 2021). Government intervention to establish equitable market structures and remove the adverse influence of intermediaries is vital for enhancing the economic landscape for smallholder farmers.

Hence, intervention is necessary to uplift the role of smallholder farmers in the economy. In the context of smallholder farming, a Theory of Change (ToC) helps stakeholders identify not only what interventions are needed (e.g., training, finance, infrastructure) but also why and how these interventions are expected to lead to broader goals such as food security, resilience, and sustainability. It prompts critical reflection on risks, enabling conditions, and institutional bottlenecks that may influence outcomes (Vogel, 2012).

ToC is a comprehensive methodology used to map out the logical sequence of events that connect program inputs and activities to desired long-term outcomes and impacts. It is widely used in program planning, monitoring, and evaluation to enhance strategic clarity and accountability. The origins of ToC can be traced back to Carol Weiss (1995), who introduced it as a way to articulate and evaluate the assumptions underpinning social and policy programs. Weiss emphasized that programs often fail not because of poor implementation, but due to unclear or untested assumptions about how change is expected to occur. She advocated for making these assumptions explicit through a visual and narrative model that shows how activities lead to outcomes and under what conditions. Since then, ToC has evolved into a widely accepted approach for theory-driven evaluation (Connell & Kubisch, 1998), especially in complex, multi-stakeholder development contexts like agriculture, health, and education. It is particularly valued for its ability to integrate contextual factors, stakeholder perspectives, and dynamic feedback loops, making it suitable for adaptive management and learning.

Hence, ToC illustrates a strategic pathway for empowering smallholder farmers in Malaysia by linking institutional inputs, programmatic activities, and developmental outcomes. The proposed ToC offers a structured, context-sensitive framework that links interventions to expected changes across the agricultural value chain for smallholder farmers in Malaysia. It is designed to guide strategic planning, implementation, and policy alignment while recognizing the complex, interdependent factors that influence smallholder success.

Inputs include targeted public funding, extension services, credit access, infrastructure investment, and enabling policies (MADA, 2022).

Activities involve training programs, cooperative establishment, market access facilitation, promotion of climate-smart practices, and policy reform (Ahmad et al., 2024).

Outputs comprise improved farmer knowledge, enhanced tool access, and more inclusive institutional mechanisms (Nadzri & Zulkefli, 2018).

Outcomes include increased farm productivity, improved resilience to external shocks, and more equitable participation in value chains (Kamal & Berawi, 2022).

Impact refers to the long-term realization of sustainable rural development, food sovereignty, and economic empowerment of smallholder communities (World Bank, 2021).

Assumptions & External Factors include sustained political commitment, effective inter-agency coordination, favorable market dynamics, and climate stability.

Figure 2: Theory of Change: The Empowerment of Smallholder Farmers in Malaysia.

CONCLUSION

In summary, smallholder farmers in Malaysia are integral to the nation’s agro-economy, contributing to food security, sustainability, and economic growth. However, to leverage their full potential, there is an urgent need for targeted interventions addressing social barriers, technological gaps, government initiatives, and environmental pressures. By fostering an inclusive and supportive ecosystem, Malaysia can enable smallholder farmers to thrive and ensure that their contributions are recognized and valued.

The review of the literature confirms that small farmers in Malaysia play a crucial role in achieving food security amid evolving agricultural and economic contexts. They not only provide essential food resources but also enhance community resilience and sustainability through diverse farming practices and local engagement. As Malaysia continues to adapt its food security policies, there must be a concerted effort to integrate smallholder perspectives and capabilities into national strategies, fostering an inclusive approach that recognizes their vital contributions. Aspects such as education, innovation adoption, and policy support will be paramount in enhancing the sustainability of small farms and ensuring their crucial role in food security is upheld in future developments. This review of literature also serves as a first step to addressing poverty and food insecurity among smallholder farmers in Malaysia. Addressing these structural challenges requires integrated and inclusive policy interventions that recognize the complex, interdependent nature of the agricultural system.

The findings of this review offers an integrated conceptual framework that can guide policymakers, researchers, and practitioners in designing targeted, evidence-based interventions for smallholder farmers. It fills a crucial theoretical void by proposing a context-specific Theory of Change that aligns with Malaysia’s rural development and food security goals (MARDI, 2023; World Bank, 2021).

FUTURE DIRECTIONS AND RECOMMENDATIONS

Moving forward, a focus on dynamic policy learning and feedback mechanisms is vital for adapting agricultural strategies in response to the evolving challenges faced by smallholder farmers. The current literature emphasizes the need to create inclusive policies that consider the perspectives of smallholders, thereby ensuring that their voices are heard in decision-making processes. Furthermore, enhancing capacity-building initiatives and collaborative networks among smallholders can significantly impact their productivity and resilience. Targeted interventions aimed at enhancing farmers’ knowledge of sustainable practices, promoting technology adoption, and improving market access will be crucial for elevating the role of smallholders in Malaysia’s agro-economy.

Given the challenges and opportunities outlined, there is an urgent need for stakeholder engagement to bolster smallholder contributions to Malaysia’s agro-economy. Firstly, implementing adaptive policies that encourage the participation of smallholders within larger agricultural networks is critical. This can be fostered by promoting inclusive policies that provide financial support and educational resources tailored to the needs of smallholders. Secondly, enhancing market access through cooperative models and fair-trade initiatives can empower small farmers economically while ensuring that their contributions are recognized within local and national economies. Establishing direct links between smallholders and consumers can help mitigate the impacts of exploitative supply chains. Ultimately, fostering greater collaboration among governmental bodies, non-governmental organizations, and agricultural institutions is crucial to promoting agricultural innovation that directly addresses the needs of smallholders, thereby ensuring their economic contributions contribute to sustainable agricultural growth.

ACKNOWLEDGEMENT

The authors would like to thank Arshad Ayub Graduate Business School for the financial support provided through the AAGBS Internal Grant No. 600-TNCPI 5/3/DDJ (AAGBS) (011/2023) in producing this paper.

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