Felda’s dilemma

  • Business
  • Saturday, 12 May 2018

Zakaria: I don’t have all the answers but I think the network of Felda descendants or younger generation is valuable and Felda should leverage on that.

New voting trend prompts CEO to look into second generation issues

DATUK Zakaria Arshad remembers how tough it was growing up as a young teenager in a Federal Land Development Authority (Felda) settlement over 40 years ago.

The “anak peneroka”, who now helms Felda Global Ventures Holdings Bhd (FGV) as its group president and chief executive officer, recalls that not only was his family poor and struggling to make ends meet then, the lack of opportunities also meant that his future prospects and that of his siblings would likely remain bleak unless they ventured out and took risks to improve the situation.

“I remember even in those days when I lived in Felda Palong 1, Gemas, Negri Sembilan, it was tough for me as a young teenager. “I lived with my siblings of nine in a one-room house, together with my parents, and there was not much opportunity to engage us. More importantly, I saw the burden my parents had to clothe and feed all of us,” Zakaria tells StarBizWeek.

He says the lack of access to basic amenities such as roads, electricity, water, phone lines and schools, due to distance, only exacerbated his family’s poor living conditions in the Felda settlement then.

What eventually changed Zakaria’s destiny was a brave decision to venture out of the Felda settlement in search of a better life for himself and the family.

“I always believed that idle minds lead to idle thoughts, so I left the settlement at a young age (17) to fend for myself, with my brother, in the city,” he says.

And the rest, as they say, is history.

While living conditions have improved at Felda settlements nationwide over the years, with the organisation taking the initiative to enhance access to basic amenities for its settlers, life remained relatively challenging for many, especially the younger generation, in the settlements.

“While Felda helped by preparing those amenities eventually, I can still emphatise with the problems of the younger generation in the settlements now,” Zakaria says.

Reforms needed

Felda has 317 settlements nationwide, with nearly half, or 115, located in Pahang.

There are an estimated 1.2 million Felda voters, comprising about 119,000 settlers, their wives, children and grandchildren as well as employees of Felda and its various companies, who decide the fortunes of 54 parliamentary seats in the country.

These seats have long been considered Barisan Nasional’s stronghold or “fixed deposit”.

But the recently concluded 14th general election (GE14) saw Barisan’s so-called fortress being rattled, with 19 of those seats falling to Pakatan Harapan and three seats to PAS.

It’s an unprecedented trend that shows that the younger generation of Felda settlers are now craving for change for a better future.

When asked how to address the need of the younger generation of Felda settlers, Zakaria reckons that Felda already has many programmes in place to engage the younger generation.

However, he concedes, the organisation has limited resources to meet all of their needs.

“It is not sustainable for Felda to maintain the generous payments for all of Felda’s descendants. What is more important is that Felda should focus on how to engage the needs of the younger generation of Felda diaspora living outside of the settlements now,” Zakaria says.

“I don’t have all the answers but I think the network of Felda descendants or younger generation is valuable, and Felda should leverage on that,” he explains.

Zakaria notes, under FGV, there is a recently-launched programme aimed at building entreprenuers of settlers living in the Felda area.

“But we have to groom them to learn how to compete outside of the Felda and FGV areas,” he says.

“The key thing is to bring innovative ideas, international exposure, motivational talks, technologies and so on to trigger the mindset of young Felda settlers in the hope of bringing the best of some of them and identify these talents, so that FGV can nuture and develop more entrepreneurs from within,” he adds.

The outcome of the GE14 shows more and more Felda settlers have lost faith in Barisan in addressing their needs. Instead, increasingly more settlers have chosen to trust Pakatan, led by newly installed (and former) Prime Minister Tun Dr Mahathir Mohamad, to make life and the future better for them.

To Persatuan Anak Peneroka Kebangsaan (Anak) president Mazlan Aliman, wresting so many Felda seats from Barisan was a great achievement, even though it fell short of the target of wresting 20 Felda seats for Pakatan.

“This is a new chapter, proving that Felda voters dare to make change,” Mazlan says in a text message.

What made Felda constituencies a “fixed deposit” for Barisan in the past was the simple-but-strong relationship between the settlers and Felda: Settlers are dependent on Felda for financial assistance – from replanting old palms to getting cheap fertiliser and small loans. Felda, in return, wants certainty that the settlers only sell their harvest to the entity.

Another important point, especially for the first-generation Felda settlers, is the ability to perform the haj. This was something that the then Barisan-led Government managed by allocating higher quotas for Felda settlers.

In recent years, however, settlers have been facing a myriad of challenges. These include the rising cost of living, particularly after the implementation of the goods and services tax, and the volatility of crude palm oil (CPO) price. Rising debts have also forced many settlers to sell their fresh fruit bunches (FFB) to third parties.

There are some 3,238 settlers that owe Felda more than RM180,000.

In the run-up to GE14, Felda rolled out several initiatives for Felda settlers. These include a RM1.6bil package in July last year. There were six main thrusts to the package – ranging from replanting subsidies to loans for them to build or repair their existing homes.

Felda also announced a one-time RM5,000 incentive for those who have been selling their harvest to Felda or plantations that are managed by the organisation. This involved almost 95,000 settlers.

In addition, Felda also absorbed 50% of the liabilities of those who had taken loans to subscribe for shares in FGV. When FGV was listed in 2012, settlers were given 800 shares worth RM3,640. Felda absorbed RM1,820 of the loan.

After taking into account the dividends declared by FGV over the years, settlers still holding FGV shares would have gotten the shares for free.

This is not the first time that the settlers received a bounty in the run-up to the GE.

In 2012, a year before GE13, each of the settlers received RM15,000. It was a one-off payoff from the listing of FGV in June 2015.

While the first-generation of Felda settlers are largely a contented lot, and more affiliated to BN, particularly due to the many benefits they have reaped in the past, the second-generation of settlers are a different lot, who are now driving change in the political landscape of the constituencies.

The second-generation Felda settlers have no affinity for any political party. They tend to support personalities that they think would be able to make a difference in their income and standard of living.

And with this group of history-changing settlers growing in numbers, surely their needs cannot be ignored. But more importantly, Felda has to have a sustainable business model to not only address the changing needs of its settlers, but also to ensure its financial wellbeing.

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