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Analysis: Debt Adjustment A Step Closer Towards Restoring Settlers' Trust In FELDA

19/07/2021 02:49 PM

By Kurniawati Kamarudin

KUALA LUMPUR, July 19 -- The move by the Federal Land Development Authority (FELDA) to waive a portion of its settlers' debts, may be the turning point for better relations between FELDA and the settlers who have been having trust issues with the agency for quite some time.

This persistent problem had made it difficult for FELDA to move forward with a new model and to strengthen its position, especially when there are settlers who refuse to participate in the land schemes but are willing to send their produce to outsiders just to make fast money.

This situation has to some extent threatened the objective of the 65-year-old organisation which was established to manage large-scale estates to enhance socio-economic development.

Photograph for illustrative purposes. -- fotoBERNAMA (2021) COPYRIGHTS RESERVED

Like a double-edged sword, the initiative undertaken by the government and FELDA to waive an average of 80 per cent of the settlers' loan debts under a conditional loan adjustment will not only reduce debt burden but will also increase the income of 92,400 out of 112,638 settlers nationwide.

This is because, the amount to be deducted from the estate produce each month will be reduced to a reasonable and affordable rate at between RM250 and RM300 per month.

With the partial loan adjustment, settlers will be able to achieve an income surplus which can be used as savings or to ease their burden, especially with the current rising living costs.

FELDA director-general Datuk Amiruddin Abdul Satar in a recent media briefing said generally the settlers' outstanding debts were between RM80,000 to RM100,000 and some have reached up to RM200,000 which were considered to be quite a large amount and difficult to settle.

FELDA director-general Datuk Amiruddin Abdul Satar. --

He said with the partial loan disposal offer, it is hoped that the agency would be able to start anew in an effort to build a more sustainable development model with the cooperation of settlers and after winning over the  20 per cent of settlers who had left the FELDA scheme.

“Both parties have their weaknesses... FELDA too has its shortcomings which has caused the settlers to lose trust. So with this disposal, we are back to square one, trust will be restored and together we can move forward for the better,” he said.

The call for the settlers' debts to be waived had previously been a bone of contention that had been made a political issue by certain parties before the 14th general election (GE14) , but the matter was later quietened down.

Earlier settlers had raised the issue over the 'debt' in question as they claimed they were not aware of their debt status as no loan statements were issued by FELDA as with loans taken from financial institutions.

Photograph for illustrative purposes.-- fotoBERNAMA (2021) COPYRIGHTS RESERVED

However, all the confusion were resolved following the agreement to waive part of the settlers' debt as at Dec 31, 2019, and the offer was enclosed with the audited financial statement.

This offer is the greatest 'gift' the settlers, especially the FELDA early generation, had been waiting for, as their debts had been accumulating over the past 20 to 30 years.

Although certain parties have raised several new issues especially on estate ownership status, it is believed this will not stop 85 per cent of the settlers from accepting the loan adjustment offer, according to National Settlers deputy chief Karip Mohd Salleh.

National Settlers deputy chief Karip Mohd Salleh. -- --Photo courtesy of Karip Mohd Salleh.

There should be no issue over the loan disposal offer because FELDA had clearly stated in the agreement that it only wanted to manage the estates in an integrated manner, not take them over from settlers.

He said the concern might have arisen due to the conditions as contained in the agreement, which caused a few of the 20 per cent of settlers who have been managing the farms on their own, to disagree with the terms.

“Only a few have disagreed, we have no problem with the other 75 per cent, who have been with the FELDA management for a long time.

“The write-off is based on the condition that the settlers must sell their harvest to FELDA. We are not stopping anyone from managing their own farms as long as they are capable of doing so according to the conditions set by FELDA,” he told Bernama.

Describing the agreement as fair to both parties, he said the settlers should reciprocate the trust given by FELDA by selling their farm produce to the agency.

Photograph for illustrative purposes.--fotoBERNAMA (2021) COPYRIGHTS RESERVED

Since the conditional loan disposal was announced on July 7, as of Sunday, July 18, a total of 35,572 settlers have accepted and signed the agreement.

“I am confident that several more will accept the conditional offer by Aug 11, including among the 20 per cent who are managing their own farms.

This is because some of those who are not participating in the scheme have not been able to manage their farms well and as such the land had been abandoned due to poor harvest," he said.

Photograph for illustrative purposes.-- fotoBERNAMA (2021) COPYRIGHTS RESERVED

In addition, following this, there will be no issue of settlers not receiving the loan financial statement as this can be accessed online through e-Peneroka portal.

At the national-level Felda Settlers' Day celebration on July 7, Prime Minister Tan Sri Muhyiddin Yassin announced that the government had agreed to dispose of part of the FELDA settlers' loan amounting to RM8.3 billion to resolve the problem which had been plaguing the settlers’ next of kin for a long time.



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