Is it permissible to give Zakat al-Mal (obligatory charity on wealth) for preparing a sister for marriage, given that the father only owns a small plot of land and cannot prepare her except by selling it?

If it is the custom of the land that a girl does not marry until she is provided with a trousseau, and your sister is unable to provide for herself, then it is permissible to give her from zakat funds according to her need, without extravagance. She is more deserving of charity because she is a kinsperson. A father is not obligated to provide his daughter with a trousseau.