SERDANG, July 7 — The government has approved an annual allocation of up to RM1 billion for 10 years starting this year to ensure the Federal Land Development Authority’s (Felda) survival.
Prime Minister Datuk Seri Anwar Ibrahim, who is also Finance Minister, said the delay in fund distribution for the Felda sukuk loan previously was due to the government having to meet its commitment in stimulus package financing.
“In order to continue the sukuk financing which was delayed, I, with the Cabinet’s backing, have approved funds of up to RM1 billion annually for 10 years to Felda.
“This is to ensure Felda’s survival as a large institution in the country,” he said in his speech during the Felda Settlers’ Day 2023 celebration here today.
On June 28, the government announced an agreement involving a government guarantee to restructure the agency’s loan via the issuance of sukuk and revolving credit as part of efforts to restore Felda’s financial position.
The major part of the restructuring of Felda’s loans is to reduce the principal of the debt to financial institutions by RM7.9 billion.
It would also enable Felda to cancel 80 per cent of the RM8.3 billion settlers’ debt.
Anwar said the Federal Government decided to abolish the settlers’ debt as it understands challenges faced the settlers and wants to restore Felda’s standing.
He said the government is also contemplating drastic measures to assist rubber industry smallholders to shift to other appropriate commodity crops, including oil palm and coconut, subject to the approval of their respective state governments.
“However, I’m requesting for a little bit of time for the Finance Ministry and the Plantation and Commodities Ministry to discuss the cost implications.
“This is because the decision covers the replanting process and has financial implications, with many parties involved, including Felcra Bhd and the Rubber Industry Smallholders Development Authority (Risda),” he added. — Bernama