IMAGINE this. You agree to a take out a loan from a bank. But it doesn’t tell you how much you’ve taken out, or give updates on how much you owe and how long is the repayment period.

You are just told to pay up between RM300 and RM400 every month, which is deducted from your paycheque. After paying the bank for about five years, you are then told that you owe it RM100,000. And this is only after you constantly harass the financial institution for details.

The seemingly hopeless situation is compounded by the fact that it refuses to tell you how much all those monthly instalments have gone towards paying off that debt.

This is what it feels to be a Felda settler these days, who said life has worsened ever since the 61-year-old scheme became tied to Felda Global Ventures Holdings Berhad (FGV) four years ago.

They believe that their newfound problems are linked to FGV’s troubles as the brainchild of Prime Minister Najib Razak hobbles from one controversy to another, and its share price plunge.

It is even being dubbed the country’s second largest scandal-hit firm after 1Malaysia Development Berhad (1MDB).

According to first- and second-generation settlers in Pahang The Malaysian Insight met, the debts they are burdened with are not the worst of their problems.

Up until last September, settlers could count on being paid twice a month each time they turned in their semi-monthly harvests, said Mohd Tarmizi Mohd Salleh of Felda Jengka 10.

Depending on how much Felda pays for a tonne of oil palm – which averages between RM400 and RM500 per tonne these days – this could mean a combined income of between RM3,000 and RM4,000 per month.

Now said Tarmizi, a second-generation planter, they are only paid once a month. So, their income has been effectively cut in half to between RM1,800 and RM2,000.

“They tell us that the second payment, which used to be given in the same month, is going to be brought forward to the next month. Then next month they do the same thing with that month’s harvests.”

This new system, said another second-generation settler Sharizal Mohd, is “beyond frustrating”.

“The first payment at the start of the month, we use to pay our car or motorcycle loan and utilities,” said Sharizal of Felda Gelingi Satu.

“The second one, we use for food and daily necessities. So now, we have to stretch the first payment for everything. It’s like you do the company’s job but they pay you late.”

The Malaysian Insight has contacted FGV and is awaiting its response to these settlers’ complaints.

Plunging value

Established by second prime minister and Najib’s father Abdul Razak Hussein, the Federal Land Development Authority (Felda) was lauded worldwide for reducing poverty among Malaysia’s landless.

In 2012, the Najib administration allowed FGV to take over 335,000ha of Felda’s plantations.

FGV, however, has been met with much criticism ever since it was listed on Bursa Malaysia in June 2012.

In 2015, it abandoned a plan to buy a 37% stake in Indonesian palm oil company PT Eagle High Plantations at a higher market value following protests from shareholders.

In all that time, its share price of RM4.55 when it was first listed, has plunged to RM1.66 today.

FGV’s latest controversy involves a leadership tussle between its president and chief executive officer, Zakaria Arshad, and chairman and former Umno boss, Isa Samad.

Both accuse the other of financial impropriety and have asked the Malaysian Anti-Corruption Commission to investigate.

Second-generation settlers like Ahmad Tarmizi and Sharizal can only watch helplessly as FGV is consumed by these management shenanigans.‎

But political activist Wan Mohd Shahrir Abdul Jalil said problems at the top are hitting settlers down below in the form of debts they have to repay and the deferred harvest payments.

“When Felda was managed by (former group chairman) Raja Muhammad Alias (Raja Muhammad Ali), it had RM9 billion in assets, RM4.5 billion of which was in cash. After FGV came on board, it now only has RM200 million in assets and cash.

“They also chalked up RM13.4 billion in losses in four years. Now how did this happen?” said Wan Shahrir, who heads the Felda task force for opposition party Bersatu.

Felda’s accounts and statements show that FGV does not make enough to run the settlements and plantations, said Wan Shahrir.

“The suspicion is that they have no cash to run the plantations like they used to. So that is why they stopped paying settlers twice a month.”

Debt and servitude

The loan that the settlers talked about is the cost that FGV accumulated for replanting all their holdings with new trees starting in 2000.

During the three-year replanting period, settlers were given a RM1,500 living allowance while waiting for the trees to bear fruit.

After the trees started producing again, settlers could opt to let FGV handle the harvesting while they earned a monthly allowance. Or they could take back their land and harvest it themselves.

Of the 360 settlers in Felda Gelingi, 300 took back their land to self-manage as they could earn more, said Wan Shahrir.

Settlers such as Nazrul Fauzan accept that they have to repay Felda for the replanting service but they question the actual amount of that debt.

“There have been people paying for the past three, five or even seven years. But they were never informed about the total amount of debt or the status of their instalments in those years,” said Nazrul of Felda Gelingi Satu.

“It was only in December last year that we got a statement on the amount we owe. But there was no explanation on how much our monthly instalments reduced our debt,” said Nazrul, adding that when the statement came, his mother owed Felda more than RM111,000.

Another settler, Mijan Mohamad, said his father replanted his small holding on his own, using the family’s own money but even he was slapped with a RM100,000 loan. 

“So,, if Felda says the debt is for replanting services then why is my family getting charged as well?”

 The lack of transparency from Felda on these debts is fuelling suspicion that the firm is collecting more than what settlers really owe, said Wan Shahrir.

Added to the fact that Felda now holds off payments for their second monthly harvest, settlers believe that the company that once helped their parents out of poverty is now shackling them in debt and hardship.

“Even when FGV was launched, the government said this was going to make us richer. But it’s made things worse,” said Tarmizi. – June 14, 2017.