KUALA LUMPUR, Dec 20 — The government is allocating a total of RM77 million to Felda settlers amid a critical cash flow shortage faced by the state plantation agency.

Finance Minister Lim Guan Eng said today that the special allocation for this year was ordered by Prime Minister Tun Dr Mahathir Mohamad.

"The Finance Ministry will channel the allocation of RM77,000,000 for 2018 to the Economic Affairs Ministry as the ministry regulating Felda,” Lim said in a statement.

Over 38,000 settlers and their heirs are expected to benefit from this allocation.

Felda, or its name in full, the Federal Land Authority, is the parent and single largest stakeholder in FGV Holdings Berhad, the world’s largest crude palm oil producer.

Lim said the bulk of the RM43 million will be used to pay Felda Technoplant Sdn Bhd for operational work to develop the smallholdings of the settlers.

Another sizeable portion amounting to RM32.8 million will be disbursed to 38,000 settlers to help with living costs and as down payment for harvest.

Lim also said another RM1.2 million will be divided among the heirs of 120 deceased settlers as part of their death benefits, known in Malay as bayaran khairat kematian.

Felda was bogged down with RM8.05 billion in debts as at June.

The agency has been hit with a series of scandals and allegations of financial mismanagement which saw a change to its chairman, top management officials and board members earlier this year.

The government subsequently appointed former banker Tan Sri Megat Zaharuddin Megat Mohd Nor as Felda chairman to turn around the agency within the next two years.

Felda started selling some of its assets to plug the RM8 billion hole in September.