Putrajaya eyes crop, livestock shift to supplement Felda bailout plan

RM1 billion from the National Treasury would be pumped into Felda to finance the PPP’s introduction. — Reuters pic
RM1 billion from the National Treasury would be pumped into Felda to finance the PPP’s introduction. — Reuters pic

KUALA LUMPUR, July 7 — The government will introduce Federal Land Development Authority (Felda) settlers to fast-yielding crops and livestock to mitigate palm oil woes that forced Putrajaya into a multi-billion bailout of the agency, according to sources.

The Straits Times reported today that the Settlers Development Programme (PPP) initiative was part of a new strategy from the Felda White Paper (FWP) tabled in Parliament to help Felda and its settlers weather volatility in the palm oil sector.

Palm oil is the main crop among the 800,000 hectares of land controlled by Felda, but the commodity is currently being battered in global markets due to oversupply and a European Union campaign to discourage consumption purportedly over sustainability concerns.

The report said Prime Minister Tun Dr Mahathir Mohamad will introduce the initiative to the 112,635 Felda families at the annual Settler’s Day celebrations tomorrow.

The PPP is part of the RM6.23 billion bailout of Felda that became necessary after it went from cash-rich to RM14.4 billion in debt under the Barisan Nasional government and during the stewardship of Tan Sri Isa Samad.

The bailout includes cash injections, loans, grants and debt write-offs, aimed at improving the lives of mostly poor Malay families who ended up in debt to the government after they were given advances in land and cash to cultivate their crops.

Settlers who were given the advance payments to replace their crops and build their homes now find themselves unable to repay Felda, which is now owed some RM5.5 billion by the settlers.

The ST report quoted sources who detailed how the new PPP initiative would utilise the technique of “under-cropping” which is done by planting under-maturing palm trees with bananas and pineapple trees, and introducing the breeding of rabbits for meat.

One source said that, over time, the maturing palm trees would form thick foliage that could serve as shelter, creating a conducive environment for cattle rearing that can then be introduced.

It was also revealed that RM1 billion from the National Treasury would be pumped into Felda to finance the PPP’s introduction, the funds coming as part of the FWP bailout.

“It will nearly double the effective income of settlers, who are struggling to make ends meet because palm oil prices have fallen,” said the source.

The introduction of these new techniques is said to be the first phase of the PPP, with more programmes such as a land-lease model, said to guarantee the settlers’ income regardless of their yield and current market prices, to be introduced later this year.

In the FWP that Economics Affairs Minister Datuk Seri Azmin Ali tabled in Parliament, it was revealed that Felda debt rose from RM1.2 billion to RM14.4 billion in just over the decade that ended in 2017.

Under Isa’s leadership, the authority was accused of making poor business decisions and deals, among them a 2012 public listing, instead of focusing on capital expenditures to finance replanting of crops.

According to the ST report, Felda spent most of its revenues on operational costs, handouts to settlers and states controlled by Umno such as Pahang and Sabah ahead of the 2013 general elections.

The BN government had considered Felda settlers to be a crucial vote bank.

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