FELDA has dismissed complaints of massive debts that settlers say are the result of a lopsided replanting agreement, with chairman Shahrir Samad saying the amounts they owed can be paid off in 20 years starting from the signing of said agreement. 

He said most of the settlers owed less than RM60,000 and only 141 owed more than RM160,000.

The debts are the result of an agreement that the settlers signed with Felda allowing the government agency to replant their smallholdings.

The replanting agreement has been a bone of contention for the 100,000 settlers are the traditional support base for the ruling Barisan Nasional coalition.

“Yes, the debts will end (in 20 years),” Shahrir told The Malaysian Insight.

Second and third generation settlers have complained that the replanting scheme had led to large debts, with some claiming that they owed Felda RM100,000 or more.

Shahrir said the replanting agreement was essentially a loan Felda gave to settlers  to cover the cost of replanting their land. The settlers would have never received such a loan from financial institutions, he said.

“Felda’s settlement scheme is under the GSA Act (Group Settlement Act) which does not allow the settlers’ land to t be leased to a financial institution.

“This is why Felda served as a bank that provided loans to the settlers,” said Shahrir.

He said a RM60 million replanting grant would reduce the amount that a settler needed to borrow from Felda to replant his four-hectare plot of land. 

“In July 2017, PM announced a RM300 million fund within Felda to restructure extreme replanting costs incurred by Felda settlers. The fund is over five years and each year RM60 million will be used to readjust the extreme debts.”

Shahrir said a few factors had contributed to some settlers owing larger amounts than others, and this included the condition of their land.

“Felda land is premium land. Some are good while some are bad, or have hills on them.

“This will cause the replanting process to take a longer time and will incur extra cost.”

The average cost to replant each settler’s four-hectare smallholding was RM48,000.

There are three components to the debt which are replanting costs, livelihood advances, and advances on future harvests.

He said many settlers, especially their children, mistook the livelihood advance for an allowance.

“Why would Felda give them an allowance? It is not an allowance because they are not Felda employees.”

Shahrir said 2,500 settlers among more than 112,000 did not have debts with Felda, and the biggest debt owed by a settler for replanting was  more than RM160,000.

He gave a break down of the number of settlers and their debts, which are in the graphic below. – November 25, 2017.