The government has agreed in principle to dispose of part of the Federal Land Development Authority (Felda) settlers’ loans amounting to RM8.3 billion as an initiative to revive the 65-year-old organisation.
Prime Minister Muhyiddin Yassin said the disposal of the loans which would be implemented through a conditional loan adjustment initiative would reduce the loan burden of each settler by an average of 80%.
“The average loan repayment is expected to be reduced from around RM800 to RM1,000 to only RM250 to RM300 a month for oil palm settlers and as low as RM150 for rubber settlers, which is a very reasonable and affordable rate for them,” he said in a pre-recorded speech in conjunction with the Settlers’ Day celebration today.
Muhyiddin said the initiative was one of the three-pronged strategies – restart, revitalise and reform – to restore the glory of Felda as the world’s leading plantation company and eventually to be listed as among successful global companies, such as in the Fortune Global 500.
He said the conditional loan disposal includes a partial adjustment of the replanting loan balance as of Dec 31, 2019, amounting to RM8 billion, which would benefit 92,441 settlers or 82% of the total 112,638 settlers.
He also said the partial adjustment of the balance of fertiliser loan arrears up to the same period amounting to RM168 million would involve 52,180 settlers while the full adjustment of the balance of the original development loan also for the same period amounting to RM56 million would involve 6,711 settlers.
It also involves a full adjustment of the loan balance of FGV Holdings Bhd shares up to July 7 worth RM78 million involving 38,043 settlers, he said.
According to Muhyiddin, this initiative was taken as the issue of the loans, which had been plaguing the settlers’ next of kin for a long time, had been identified as one of the issues that could hamper Felda’s efforts to get back on par with the world’s leading plantation companies.
“The issues of these loans should be settled first to ease the process to restart Felda,” he said.
Muhyiddin also expressed hope that the government’s efforts would be a starting point or a reset button for the settlers to be more enthusiastic and focused on doubling their production and income, thus enabling more prudent financial management.
“I really hope that with the new agreement signed by the settlers with Felda under this conditional adjustment initiative, the settlers will be more committed to fulfilling all the agreed terms so that they can jointly bear the responsibility of increasing productivity and ensuring the sustainability of Felda,” he said.
He added that it was high time for the new generation of settlers to come forward, face the challenges and shoulder the responsibility of navigating change in the community.
“After 65 years of its establishment, I believe the Felda community has matured. After receiving various assistance and support, you must all be ready to give back and contribute to the community as a whole,” he said.
He added that the initiatives lined up by the government should be welcomed and fully utilised by the Felda community so that efforts to improve their socio-economic status could be empowered to ensure a brighter future for the next generations.