SIXTY-THREE years ago, second prime minister Tun Abdul Razak Hussein set up Felda to eradicate poverty among Malay settlers by giving them govt land to work on. Once a multibillion-ringgit company, Felda is now burdened with a debt of RM10.2 billion accumulated over the last 10 years. Its new director-general, Datuk Dr Othman Omar, has a mammoth task.
He speaks to tells HANA NAZ HARUN about plans to turn Felda around.
Question: Tell us about the RM6.23 billion injection of financial aid from the government. How is this money being used to revamp Felda?
Answer: The largest portion of it goes towards restructuring our loans, totalling RM2.5 billion, in the form of government guarantee. We have got loans with the Employees Provident Fund, CIMB Bank and Malayan Banking. We’re talking to them to defer parts of the payment. With that, we can be more healthy in terms of cash flow.
Another RM2 billion will be used to ease debts owed to Felda by settlers, and RM1 billion to branch out to cash crops and upskill settlers under our Settlers Development Programme (PPP). About RM480 million will be paid to help with living costs and future income.
Felda will receive this financial injection in stages over seven years.
Q: You’ve mentioned that PPP is to upskill Felda settlers, for them to be more financially independent. What are your plans to empower them?
A: Settlers should not depend too much on us or on oil palm. Therefore, we have allocated RM1 billion for PPP, a programme to make them more independent. We are trying to get them to borrow less, and increase their earnings.
We want settlers to lessen their dependency on crude palm oil (CPO) prices because they fluctuate. This is unlike 10 years ago, when they were always on the rise. We want to create multiple sources of income for them, such as dividends from cooperatives and income from alternative crops.
Q: Have you identified alternative crops?
A: We recently had a meeting with the agriculture and agro-based and economic affairs ministers. We wanted to find a way to collaborate with agencies, such as the Malaysian Agricultural Research and Development Institute, Federal Agriculture Marketing Board and Department of Agriculture under these ministries so that they can help us identify suitable crops and ensure the success of the programme.
We have test plots for intercropping in the plantations. When we do replanting, the oil palm trees are still small, so you can still plant in between the rows. The crops can be maize, banana, pineapple, sorghum, and even hemp. They have various yields that are much higher than CPO.
Pineapple, for example, is five times higher in terms of yield and ringgit per hectare. You can plant hemp to make fibre that is stronger than steel, which can last up to 1,000 years. There are technologies to help with that.
Q: Apart from intercropping, are you looking to go into livestock?
A: There are activities that we feel need scaling up. For example, the Kami Anak Felda (KAF) cooperative is venturing into cuniculture, or rabbit farming. Settlers can go for a two-day course and will be taught how to breed and raise rabbits. After three months, they can resell the new rabbits to KAF. Each module will give them an average of RM400 a month, depending on how well and how fast they manage it. It’s very simple.
The offtakers for this is the cooperative itself and Sate Kajang Hj Samuri, which makes rabbit satay. We have found that there is a lot of demand for rabbit meat from overseas, so this is something we can look into, to help settlers make an extra income.
Q: How are you going to finance these settlers for PPP?
A: We are studying whether to give a full grant or half grant-half loan, to make sure that it benefits as many people as possible. Our target is low-income earners. These are people whose plantations have low yields or have big families. We don’t want to end up giving subsidies to those who are earning RM5,000 or RM6,000 a month.
Whatever method that was used before might not be sustainable, so we need to change that. An option is for settlers to sign a long-term lease with us. Felda will pay them rental plus profit-sharing, so that they don’t have to take up loans. About 60 per cent of our settlers are 55 and above, and soon, they won’t be able to toil on their land any more. It would be better if we give them this long-term lease option.
We think this is a good business model, but a formula needs to be worked out first.
Q: By now, there are two to three generations of Felda settlers, but many of them have moved to cities and urban areas. Is there anything being done to attract more of them to stay?
A: A total of RM250 million has been allocated for the completion of the “Perumahan Generasi Baru Felda”, which are homes that have been constructed for the second generation and above.
It is true that most of them have gone to the city because there are no housing facilities in their areas.
The project is 70 per cent complete, involving 4,794 units. By doing this, hopefully, they will stick around and add value to the community.
Q: The tabling of the White Paper in Parliament on April 10 found years of mismanagement and abuse of power. What are some of the actions being taken against those involved?
A: Based on the White Paper, we have lodged reports over two of the cases. The Malaysian Anti-Corruption Commission has picked up other cases based on the information available. Police are taking statements from people mentioned in the White Paper.
Felda has taken action against most of them. They have either been transferred to less critical locations, have resigned, have taken long-term leave, or have been seconded to different companies or subsidia-ries.
We have to be mindful about this, and have referred to an industrial relations lawyer to advise us. We have to be fair and allow the investigation to take its course, and to identify who are the culprits and victims.
Q: With all these news about debts, leakages and Felda having bad cash flow, how are you trying to manage public perception?
A: We need to focus on the positive. There’s nothing much we can do about what’s been said and done. We have taken legal action, but that’s not our No. 1 focus. We have to focus on moving forward.
We have done things like restructuring our loans, our talent and the management. We are getting new blood into the company to look into critical areas, like finance, public relations and human resources.
People need to know that we have done a lot, and there is a lot in store for us in the future. We have many agencies and non-governmental organisations which are helping us and giving us positive input.
Q: So there needs to be a big change in the direction and mindset of Felda staff?
A: My focus internally, among other things, is the people. The technical things can be resolved. Over the years, you had a default working culture, and you just continue with whatever’s been done before. If all this while, people take long tea breaks at 11am, rush to go back by 5pm, nobody wants to do overtime, then it’s the same problem all over again.
We need to change that, and many staff, especially the younger ones are willing. We haven’t been spending on training because we don’t have the money, but we have to drive people to understand our shared values and get them into the right mindset.
If you are trying to help get 2.6 million people out of poverty, but you’re just sitting there shaking your legs, you can’t do much.
You have to “berjihad” (strive). We need to change the attitude of the workers so that we can solve problems, make decisions within 24 hours and have the speed to do business. In many countries, the top talent work for the government because they think that’s where they can maximise their talents for society.
Here, if they work for the government, they say it’s their right not to work so hard. This is not right. You cannot say because you don’t get the right pay, you don’t need to work that hard.
If you work for the government for money, that’s wrong. When I joined Felda, it was not about the pay. It’s a national service.
Q: Will there be any managerial change?
A: We are always looking at areas of weakness. If I don’t fix them, (these weaknesses) are going to be very expensive. I always tell the staff that in Islam, “amanah” is not just about not lying. You need to also carry out your job and do it well.
I have a job to do and I cannot try to please everyone. The worse thing that they can do is terminate my contract, but that’s okay as long as I know that I have done my best.
I cannot keep following orders and trying to keep people happy just because I am scared of termination. This is the only way I believe I can create changes and make a difference.
Q: With all these plans in place, how long do you think the agency needs to turn around?
A: Well, my contract is for two years. So I need to do whatever it takes within these two years, and the rest needs to be carried out by the staff.
But for Felda, I think we need five years to turn it around. The quick wins need to be done. Even rebranding, if it doesn’t happen within a year, then we have failed. People need to have a feel-good feeling.