The Malaysian Insight

INSTEAD of praises for Pakatan Harapan’s Felda rescue plan, Azmin, a civil servant, got an earful from his Felda relatives during Hari Raya Aidilfitri.

Many of the settlers in the scheme where his family hails said they were still experiencing late payments for their twice-monthly harvests.

This is even after the government unveiled a RM6.23 billion rescue plan, which, among others, aimed to ensure settlers and contractors who work these estates that they would receive their payments on time. 

“Some settlers were still getting their payments for their harvests one week late,” said Azmin. 

Settlers typically harvest their oil palm holdings twice a month, with the fruits bought by Felda. 

“Its like getting your salary late. Its very difficult because then you can’t pay your bills and loans on time,” said Azmin, who only wanted to be known by his first name.

Settlers’ welfare groups had said that while such problems still existed, the agency’s new management has tackled about half of such cases at all 317 settlements nationwide.

There are about one million individuals in 112,635 settler families across the country.

According to Zulkefli Nordin, who heads welfare group SGK2F, many second-generation settlers become contractors in these schemes, supplying manpower, equipment and logistics to work estates.

Sulong Jamil Mohd Sharif, who represents settlers in meetings with Felda, told The Malaysian Insight that the agency was working hard to deal with its acute cash-flow problem – something the new management inherited from the Barisan Nasional administration.

“Many of these late payment issues have been solved after RM6.2 billion was given by the government. For instance, monthly living aid loans are no longer late but other payments may still be,” said Sulong Jamil.  

Also, settlers who take out loans to replant their aging holdings usually borrow from a living aid allowance from Felda, which is paid to them each month.

“I admit, some settlers will still face problems with late payments for harvests in certain settlements because of Felda’s financial constraints,” said Sulong Jamil.

“It will take one to two years before all these problems are solved.” 

Better than before

According to the government’s white paper on Felda, the agency’s cash-flow problems have impaired its ability to meet operation costs, replanting costs, loans and outstanding payments to settlers.

About RM1.98 of the RM6.23 billion rescue package is to be used to restructure loans Felda owes to various financial institutions.

Another RM2 billion is to be used to pay off interest from living aid loans taken by settlers.

Sulong Jamil said Felda had to borrow money from financial institutions to ensure it could give out living aid loans to settlers.

“Although the government promised RM6.2 billion, the money comes in stages. The interest from these external loans has to paid first, so that’s where a big chunk of the money it receives from the government goes.”

Because of this, the agency is unable to pay all of its settlers on time, but Sulong Jamil said the problem is not “as bad as before”.

Zulkefli, who represents second-generation settlers, said Felda’s new management has resolved about half of these late-payment problems.

“Like my parents in Felda Soeharto (Selangor) told me recently, all settlers got their money on time, but there were cases in other settlements where they were overdue,” said Zulkefli.

Despite these problems, he praised the agency’s new management team for the commitment it has shown towards resolving these issues.

“The new leadership is different from the old one. The old one worked behind closed doors. But the new one is very open. Whenever we highlight late payments and problems, they look into it and take action.

“For example, if we ask for RM100, they will give RM50 if they can’t give all. If I bring four late payment cases up to them, they will settle the most critical one first.

“There is at least some progress compared with before, when the management just shut the door in our faces.”

Zulkefli also echoed what Sulong Jamil said in that it would likely take a few more years before all of the settlers’ problems were resolved.

“The money is there, the plan is there, we are now in the execution stage and this will take time. So, we have to be patient.” – July 1, 2019.