KUALA LUMPUR: The government has agreed to dispose of part of the Federal Land Development Authority (Felda) settlers' loans worth RM8.3bil under a conditional loan adjustment initiative, says Prime Minister Tan Sri Muhyiddin Yassin.
Muhyiddin added that the government had identified the loans as being among the main issues facing settlers.
"The issue of the loans must be corrected first to facilitate the process of revitalising Felda," he added in his inaugural Felda Settler's Day speech which was aired live on Facebook on Wednesday (July 7).
With this initiative, Muhyiddin said the burden of loans paid by each settler will be reduced by an average of 80%.
"The average loan repayment is expected to be reduced between the range of RM800 and RM1,000 a month to between RM250 and RM300 for palm oil settlers.
For rubber smallholders, it will go as low as RM150 each, which is a reasonable and affordable rate for them," he said.
Under the conditional loan adjustment, there will be a partial adjustment for the balance of the replanting loan exercise worth RM8bil as of Dec 31, 2019, which will benefit a total of 92,441 settlers (or 82% of the 112,638 settlers).
There will also be a full adjustment for the loan balance of FGV Holdings Bhd shares of up to 7% worth RM78mil, as of July this year, which will involve a total of 38,043 settlers (34%).
It will also include a full adjustment of the original development cultivating loan balance amounting to RM56mil, as of Dec 31, 2019, which will benefit a total of 6,711 Felda settlers.
Muhyiddin said with the efforts taken by the government, it will become a starting point or a 'reset button' for settlers nationwide to be more focused in increasing their revenues and income.
"This will allow them to be more financially prudent," said Muhyiddin.
He hoped that with the signing of a new agreement with Felda under the conditional loan adjustment initiative, the Felda settlers will remain committed in fulfilling all the agreed terms so they will together carry the responsibility to boost productivity and ensure the sustainability of Felda.
Muhyiddin also praised the Felda Settler Development Programme (PPP), which was designed to encourage settlers to venture into entrepreneurship as well as a stepping stone to reform Felda.
"I'm confident that the programme will reduce the dependency on commodity price cycle and can diversify the source income for Felda settlers."
"This new approach will make Felda an exemplary blueprint for future rural development in line with the Shared Prosperity Vision 2030," he said.
The prime minister said that Felda's previous successes have been acknowledged and become a model for many countries abroad.
"These successes include efforts to eradicate poverty, improve the country's commodity output and improve the standard of living especially those in the rural areas," he said.
He said with an added advantage of having a landbank of 832,000ha or more than two million acres, Felda has the ability and the potential to rebound and become a world leading plantation company.
"I would like to see Felda's name ranked on the list of the most successful global companies including in the Fortune Global 500.
"I realise that it is not an easy task, but with the three-pronged strategy - restart, revitalise and reform - and with the commitment from the new management team as well as government support, it is not something that is impossible to achieve," said Muhyiddin.