Felda concept took root in 1953


With 48 years of history, the Federal Land Development Authority (Felda) has touched the lives of some 500,000 Malaysians. As the single largest plantation in the world, the agency has become the prime mover of the country’s economy. However, lately, the entire project has come under criticism and seems to be bogged down with various problems. A three-part series, starting today, will explore how the lives of settlers and the agency have changed over the years. In the first part, the articles will look at the inception of Felda and the country’s first land scheme. DEVID RAJAH, HAH FOONG LIAN, HANIM ADNAN and FLORENCE A. SAMY report 

THE development of the Federal Land Development Authority (Felda) can be traced back to before the country’s Independence. 

ENCOURAGEMENT: Former Prime Minister the late Tun Abdul Razak (with a walk ing stick) visiting the country's first settlement in Felda Bilut Valley in the late 60s.  

According to Dr Halim Salleh in his doctorate thesis entitled Changing Forms of Labour Mobilisation in Malaysian Agriculture, a fact-finding mission headed by Sir Francis Mudie – formerly the head of the British Economic Mission to Yugoslavia – was set up in 1953 to re-examine the rubber industry in the then Malaya. 

Among the recommendations of the mission were the creation of separate replanting funds for estates and peasant smallholdings so that the latter could be better organised and controlled to produce higher quality rubber through proper horticultural practices and the use of high yielding material. 

It also proposed that better facilities be provided for peasants to intensify replanting and the government should expand peasant production through an organised land settlement scheme. 

Dr Halim wrote that the proposal apparently won the support of the World Bank Mission and it suggested that together with a provision to prohibit sub-division of land, a land scheme along the lines of the Gezira scheme in Sudan be set up.  

The Gezira scheme, which was started in 1910, initially covered an irrigated area of 2.03 million hectares of cotton and food crops. The Sudan authority acquired the land, ploughed it and provided fertilisers while the peasants provided labour power as tenants where they planted, maintained and harvested the crop. 

In August 1955, the then Government of Malaya set up a working party to assess the extent to which the proposed land scheme should be carried out. 

It was proposed that Felda carry out the task and be allowed to seek capital and raise it independently from other commercial sources. 

PIONEERS: The first batch of settlers in Felda Bilut Valley clearing the land before planting rubber trees and building their houses.

In other words, Felda was expected to operate as a commercial enterprise, wrote Dr Halim. 

The proposal of the working party was accepted and the Felda Bill was passed in May 1956. 

To test the proposal, Felda decided to carry out three pilot projects located in Kelantan, Kedah and Malacca. 

The first pilot project was started in June 1956 at Ayer Lanas in Kelantan. 

A local land development board called the Tanah Merah Land Development Board was set up to manage the project on a loan of $800,000 at 7% interest per annum from Felda. 

The scheme consisted of a 1,619ha block of jungle land and it was designed to contain 400 settler families. 

They were each given 2.4ha of land to plant rubber, 0.8ha for food crop and 0.4ha for fruit and vegetable growing. 

They were, however, expected to grow most of their food needs, particularly dry rice. 

Despite some shortcomings, the Ayer Lanas scheme was considered to be a model for a new form of peasant production. In 1960, the Group Settlement Act (GSA) was enacted to allow government agencies to secure blocks of state land to settle groups of peasants for agricultural development. 

Felda land scheme, which began when the late Tun Abdul Razak was Prime Minister, showed remarkable development. 

While reports showed that in 1969, settlers were earning about $80 instead of the projected $350 a month, Felda recorded success when it collected RM2mil in loan repayment from settlers since the first scheme came into production in 1963. 

Recent records also showed that Felda had successfully repaid all of its loans totalling RM9bil in 2000 and pre-paid all of its outstanding loans which were only due in 2020. 

For long serving staff and settlers, the financial success is just a macro picture and does not reflect the human aspect of the scheme. 

According to Felda’s assistant administration officer Inderaputera Ismail, the life of a settler was like a roller-coaster ride as they went through the good and bad times. 

“The good times are when prices of palm oil go up like in 1984, where the average income per month for a settler was RM1,800,” said Inderaputera who has been a staff since 1968 and is now the Felda Employees Union president. 

“It is during the good times that we in the scheme develop an inferiority complex when we see the settlers driving their new cars,” he added. 

He said that in the late 1980s, the price of palm oil dropped and income decreased to between RM500 and RM600 a month. 

Dr Halim wrote that the National Economic Policy marked a watershed in the position of Felda in the national economy as the agency was entrusted with the task of eradicating poverty among the poor Malays. 

The agency also set up the Felda Foundation in 1998 to fund and promote activities such as social welfare, education, cultural programmes and economic activities for the underprivileged in the country. 

From its initial role as a land development agency, Felda is also involved in commercial activities through its 24 companies and 20 joint ventures. 

Now under the purview of Deputy Prime Minister Datuk Seri Najib Tun Razak, settlers are harbouring hopes that they will benefit from the policies.  

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