Company explains issues over durian deal in Raub (updated)

  • Nation
  • Wednesday, 02 Sep 2020

KUANTAN: Royal Pahang Durian Resources PKPP Sdn Bhd (RPDR-PKPP) has given its side of the story over issues raised pertaining to its handling of the land legalisation scheme involving durian farms in Raub.

The company's management said to date, a total of about 300 farmers had registered with them, of which 133 had confirmed and partially paid earnest money of RM1,000 per 0.4ha and up to RM10,000 per applicant for those who exceeded 4ha of land.

"The balance of the earnest money (based on the final licensed surveyor's results) need only to be paid after signing the definitive agreement with RPDR-PKPP. The requirement for earnest money is mandated by the Pahang government," said the company in a statement.

RPDR-PKPP also said that the levy of RM20,000 per 0.4ha was not exorbitant, saying this was the ceiling amount the company would receive.

"This amount is paid by Royal Pahang Durian Export Sdn Bhd, the trading company. There is no penalty if farmers do not meet the tonnage targets.

"For example, if the farmers only produce 1,000kg or less per 0.4ha, RPDR-PKPP may potentially receive as low as RM10,000 per 0.4ha or less," said the company.

The company said this was for fixed annual operating costs including office administration, paying for its staff of over 150 people, site supervision for environment protection, satellite monitoring to curb further encroachment, the MyGAP application and its maintenance cost, lease payment, assessment and quit rent, to name a few.

On the RM6,000 per 0.4ha annual rental as claimed by the Save Musang King Alliance (Samka), RPDR-PKPP reiterated that this was a one-off lump sum payment for 2020 only.

"This is only applicable on matured durian fruiting trees calculated at 30 trees per 0.4ha. In return, the farmers are allowed to sell all their durians directly in the open market for the full year of 2020 and up until May 31,2021.

"The obligation to sell durians to Royal Pahang Durian Export Sdn Bhd will take effect only on June 1,2021, when the legalisation scheme starts.

“To further accommodate the farmers' financial relief request, RPDR-PKPP has agreed to split the payment into three equal instalments respectively payable in September 2020, December 2020 and March 2021," the company said.

RPDR-PKPP also said its proposed price of RM30 per kg for Grade A Musang King was fair.

It said a farmer with 4ha of land would have a minimum gross revenue (based on 2,000kg of Grade A durians per per 0.4ha) of RM600,000.

"Based on independent verification, the cost of production (of about RM8 per kg) will therefore assure the farmers an expected margin of more than 200%," said the company.

On claims that the company was financially weak, RPDR-PKPP said the numbers protestors highlighted were actually related to Royal Pahang Durian Produce Sdn Bhd (RPDP), the owner of a 404ha durian farm in Tras, Raub.

"The liabilities shown are the amount owing to shareholders who injected their own money into the farm through the company as a loan.

"The gestation period is six years hence there are no sales and income as yet. RPDP expects first fruiting in 2022 and the shareholders' investment reflects the financial strength of RPDP.

"Furthermore, RPDP has been granted 10-year tax exemption status from the Finance Ministry in 2019," said RPDR-PKPP.

The company said that it would remain open to discussions with farmers who had yet to register with the legalisation scheme and urged them to come forward.

Meanwhile, the Samka group, which comprises farmers without permits, said they had always wanted to work with the state government to resolve issues over unlicensed durian farms in Raub.

They said they had unsuccessfully been applying for farming licenses and titles for decades in good faith.

In a statement on Wednesday (Sept 2), Samka said the farmers were still ready to work with the state government and resolve the issue – on condition that a RPDR-PKPP's involvement is completely halted.

Samka said there were concerns over possible exploitation of farmers and profiteering over the scheme.

They said should a monopoly of the durian market arise, both farmers and the state government could end up in a “lose-lose situation".

Samka also said farmers were willing to pay for any uncollected land taxes from previous years and even share profits in the future for the benefit of the state.

"Besides that, the farmers also seek to work with the state government to formulate a long-term plan for managing durian farms and cost-sharing to preserve the environment and water catchment areas, ” they said, adding that both the environment and economy of Pahang state can benefit.

Samka said they were against RPDR-PKPP's rent-seeking model, and claimed it profited from farmers without contributing any real effort.

On Mentri Besar Datuk Seri Wan Rosdy Wan Ismail's remark that the government would not compromise on the issue of illegal farms, Samka said the government should not forget history where Raub farmers in the 1970s started cultivating land under the Green Book Programme.

"Farmers were encouraged to cultivate unused land in order to be self-sufficient. However, many applications made by the farmers to farm legally were rejected, and farmers ... could only continue farming on their so-called 'illegal land'," said Samka, and urged the state government not to “treat them like criminals”.

On Tuesday (Sept 1) Wan Rosdy said that the state government was firm on its stance and would act decisively against illegal durian farmers in Raub.

However, he acknowledged that enforcement action had been suspended following a recent decision by the High Court here.

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