ABSTRACT This paper discusses the influence of neoliberal agricultural policy on the changes in agricultural practices amongst the indigenous farmers in Kota Belud, Sabah, Malaysia. As the main rice-producing area in Sabah, the agriculture sector in Kota Belud is significantly changing. However, why such changes have occurred and what do these changes mean to the practices of indigenous farmers are largely unknown. Based on semi-structured and in-depth interviews with farmers and local leaders in Kampung Piasau, Kota Belud, this paper demonstrates the main factors identified as having the greatest impact on the agricultural sector in Kota Belud. The influence of privatisation and free-market economy has brought about modernisation in the farming sector, leading to the erosion of collective values and social capital that farmers have long practised. This influence also has promoted the notion of neoliberal policies that 'modern' society and agriculture are more rational than indigenous agricultural practices, a rationale that is built around 'western' logic rather than tradition. However, research findings do not fully support this notion as some informants expressed strong confidence towards the need to revitalise traditional farming practices in paddy cultivation activities, although many of them are no longer practised. Overall, the influence of neoliberal agricultural policy has brought significant changes to the farming community in Kota Belud. Some are desired, and some are less desired changes, but all affect the process and purpose of agrarian change.