Over the last seven years, a declining trend in the OER has been observed and it has caused great concern to the oil palm industry. The decline of 1.24% in the national yearly average OER was recorded between the years 1988 to 1994. For Peninsular Malaysia, the total drop during the period was 1.36%. However, the situation was stable in Sabah and Sarawak until 1993 when the OER began to decline. This problem is not only affecting private millers but also the plantation agencies. The possible factors that contributed to the downward trend can be categorized into two (2), i.e., uncontrollable and controllable factors.