KUALA LUMPUR: Federal Land Development Authority (Felda) is seeking committed investors to maximise potentials at its marginal land.
“We are in talks with investors who have shown interests to plant up durians at slopes and marginal land that receive less rainfall and therefore not suitable for oil palms,” said Felda director general Datuk Dr Othman Omar.
“Also, there are people who have approached us to jointly plant up cash crops on marginal land. There are also swiftlet rearing entrepreneurs who are keen to lease settlers’ land to harvest birds’ nest.
“We want to help settlers to make use of marginal land and earn some extra income. We can explore hi-tech precision farming, organic farming and fertigation in high yield cash cropping of durians, coconuts, pineapples and bananas,” he added.
“Oil palm and rubber have been trading at low prices for some time. So, in current tough times, we want to encourage settlers to be involved in cash cropping to maximise potentials at marginal land,” he told reporters in a recent interview with the New Straits Times Press.
He explained Felda currently operates cattle / sheep farming and napier cultivation in Chuping Perlis, fertigation under the Sentuhan Kasih projects. He highlighted some Felda settlers are involved in the Agropolitan projects under East Coast Economic Region (ECER).
Apart from agriculture, Othman spelled out prospects for investors to set up mini-solar farms at Felda land that are strategically near the national power grid.
“We invite investors to mine for gold and manganese in the Gua Musang and Aring,” he added.
Established in 1956, the Felda scheme assisted poor Malaysians by resettling them in oil palm and rubber plantations, in the hope of eradicating poverty through economic empowerment.
With more than 900,000ha of land in Malaysia, Felda is one of the world's largest palm oil producers.
There are 112,635 settler families nationwide. Together with their second-and third-generation family members, they make up a community of about 1.2 million people.
About 335,000ha from Felda’s total landbank of more than 900,000ha are currently run by FGV under a land lease which was established in 2012, for 99 years.
Out of Felda’s total landbank and excluding the 335,000ha held by FGV Holdings Bhd under the land lease, another 475,000ha is appropriated to Felda settlers, while Felda’s own managers operate the remaining 40,000ha of the plantation landbank.
Under the land lease, FGV pays Felda about RM248 million per year plus 15 per cent share of the group profits.
The 15 per cent profit sharing fluctuate according to implied discounted cash flow, prices of fresh fruit bunches and crude palm oil, replanting of old trees and the lease term.
In 2017, new accounting standards on land lease FRS 117 had recategorised Felda as the landowner and lessor while FGV, as lessee. This lead to the lease being considered a liability in FGV’s books but an asset in Felda’s.
As at December 2016, FGV’s long-term land lease liabilities stood at RM4.13 billion, the largest component of its long-term debt.
“I sit on both Felda and FGV boards. The management is looking at ways to collaborate synergistically. We would like to explore on the land lease arrangement that would bring about mutual benefits to both Felda and FGV,” said Othman.