FELDA Co-Op Must Embrace True Cooperative Principles To Benefit Settlers – Expert

To this end, there is a growing need for Felda to come up with new strategies to adapt to the changes in the economic landscape, one of which, as suggested by an expert, is establishing a cooperative that operates on the principles of a “true cooperative”.

Academic Datin Paduka Prof Dr Fatimah Mohamed Arshad, who specialises in agricultural marketing and policy analyses, said to ensure sustainability, equity and growth, it is necessary for Felda settlers to be part of a cooperative that is “run like a true cooperative”.

“FELDA settlers should work within a framework of true cooperative principles, that is, a cooperative which is set up by settlers for settlers, and uphold these values. A true cooperative adheres to the principles of user-owner, user-control and user-benefits.

“Those who own and fund the cooperative are also the ones who use it. They control the cooperative, and its sole purpose is to benefit its users based on their participation,” she told Bernama.

Fatimah, a fellow consultant and holder of Food Security Chair at the Laboratory of Agricultural and Food Policy Studies, Institute of Tropical Agriculture and Food Security, Universiti Putra Malaysia, said while Felda already has a cooperative, Koperasi Permodalan Felda Malaysia Bhd (KPF), it falls short of operating under “true cooperative principles”.

“KPF is beneficial but settlers do not control the cooperative as it is administered by Felda (officers), leading to a lack of entrepreneurial skills among settlers,” she added.

 

Felda was established in 1956 as part of a broader initiative by the federal government to address rural poverty and unemployment. Since then, the agency has opened and developed 870,000 hectares of land and placed 112,635 settlers in 317 schemes.

While the Felda model appeared to be a successful example of a rural development programme, with the agency playing a crucial role in improving the livelihoods of settlers through their participation in agricultural programmes, many of them have remained stuck in the B40 or low-income group.

According to Fatimah, a cooperative initiative like KPF should be driven by the settlers themselves as it would ensure their needs and interests are addressed directly.

“Such an approach empowers settlers to participate in the management and direction of their cooperative, fostering ownership and responsibility,” she added.

Fatimah advocates a “forward and backward integrated cooperative model, run by and for settlers, and free from political pressure and the administrative control of Felda officers”.

“This model allows settlers to manage and make decisions for their cooperative, covering both production and the supply chain. This autonomy promotes ownership and responsibility, prioritising their needs,” she explained.

She believes by adopting these strategies, Felda can create a sustainable, independent and progressive community of settlers, and ensure their long-term economic success and competitiveness as well as reduce their dependency on government grants and assistance.

If a settler-driven cooperative is established, the Felda management’s role will transition from direct oversight to a supportive and facilitative capacity, concentrating on delivering training, resources and infrastructure to aid the cooperative, she added.

 

Fatimah noted that Felda and its settlers can emulate the successful cooperative models of Fonterra in New Zealand, Amul in India and Mondragon in Spain.

(Fonterra Co-operative Group Ltd, a cooperative with farmers as its shareholders, is a manufacturer and marketer of dairy products. The Gujarat Cooperative Milk Marketing Federation Ltd, popularly known as Amul, is the apex organisation of dairy cooperatives in the Indian state of Gujarat. The Mondragon Corporation is a corporation and federation of worker cooperatives based in the Basque region of Spain.)

Pointing to Mondragon as an example, Fatimah said: “Mondragon is a federation of worker cooperatives known for its democratic governance, social responsibility and sustainable development, with 70,000 employees and a turnover of €10.61 billion.

“This model's success highlights the potential for cooperatives to thrive without government-linked companies, demonstrating the benefits of cooperative efforts.”

The expert added another inspiring example of a cooperative is Malaysia’s own Koperasi Pasar Chow Kit Road Bhd in Kuala Lumpur – its success proves that social integration among retailers (in the Chow Kit wet market) of various races and from different socioeconomic profiles can be achieved even in a highly competitive business environment. 

“By fostering a cooperative spirit, it helps reduce conflicts arising from competition. The (Pasar Chow Kit) cooperative unites diverse small business owners, and promotes mutual support and community development,” she said, adding the Koperasi Pasar Chow Kit Road model demonstrates how Felda settlers can work together, transcending cultural differences and achieving shared economic benefits through cooperative efforts.

Universiti Teknologi Mara senior economics lecturer Nor’ Azurah Md Kamdari, meanwhile, feels allowing Felda settlers to operate their own cooperative may not solve their livelihood problems.

She said traditionally, Felda has been using a cooperative concept, divided into three phases, to run the land development programme for its settlers.

“During the first phase, Felda settlers learn farming (planting commodity crops). In the second phase, each settler is given a specific plot of land and in the third phase, they are granted ownership of their land.

“In my opinion, if Felda settlers were to manage their affairs independently, inefficiency in governance would inevitably arise. In managing an organisation, there must be transparency and accountability to ensure effective management,” she said.

Nor’ Azurah said the solutions to the many issues that have arisen within Felda “do not lie in allowing the settlers to make decisions independently regarding the agency’s administration”.

“The challenge of managing Felda lies in the expertise and experience of its management which must have the ability to make wise decisions, address issues effectively and demonstrate creativity in managing Felda’s affairs,” she added.