STATE-BACKED consortium Royal Durian Pahang said today that durian farmers stand to make a handsome profit from its proposal to pay them RM30 per kg for the musang king grade A variety of the fruit at  

In a statement to counter the farmers’ claims they are shortchanged in the deal, the firm said a grower with four hectares of land producing 2,000 tonnes of the fruit, for example, could expect to make RM600,000.

“Based on an independent survey,  with the cost of production at about RM8 per kg, the farmers are assured of a profit margin of more than 200%,” the statement said.

The farmers have said that the proposed price of RM30 per kg is too low.

Royal Durian Pahang is a joint venture between Royal Pahang Durian Group (RPD) and Perbadanan Kemajuan Pertanian Negri Pahang (PKPP). It has been given the lease and land use rights for 2,168ha of farmland in Raub for 60 years.

The firm was set up to purportedly curb encroachment on state land for the cultivation of durians. The state also contends that the durian farmers have been planting without a permit, and that a contract with RPD is a way to legalise their operations.

RPD today also refuted claims the durian farmers are against  the legalisation scheme.

“To date about 300 farmers have registered with RPD-PKPP, 133 of which have confirmed and partially paid earnest money of RM1,000 per acre,” the company said, adding that there will be no penalty fee for farmers who do not meet the tonnage targets.

Save Musang King Alliance (Samka) last week protested against the contract with the firm that members said they were forced to sign.

Samka said under the terms of the contract, the farmers must pay an annual levy of RM6,000 per 0.4ha of land and sell their prime crops solely to the consortium at a fixed rate of RM30 per kg for the next two years.
 
The price is significantly lower than the average market price of RM45 per kg, while the levy means a farmer with four hectares will have to pay Royal Durian Pahang RM60,000 each year to “rent” the land, said Samka. 

Royal Durian Pahang today clarified that the levy was a one-off payment for the year 2020 and not annual rent fee as claimed by Samka.

“In order to assist farmers financially, RPDR-PKPP has agreed to split the payment into three equal instalments. They are payable in September 2020, December 2020 and March 2021.”

Meanwhile, it said the firm’s high liability as highlighted by protesters was due to capital forwarded by shareholders in the form of loans and nothing to be alarmed about.

“We own a 1,000-acre (400-ha) durian farm in Tras, Raub, Pahang and expect the farm’s first fruiting in 2022. Once that happens, the company will generate income which will pare down its liabilities.”

It said it is confident of a strong financial outlook given the shareholders’ investment and the 10-year tax exemption status it was granted by the Finance Ministry in 2019. – September 2, 2020.