Felda settler woes give Malaysian opposition way in

A worker carrying oil palm fruits at a Felda plantation in Klang, Malaysia. Felda settlers are disgruntled at how the agency is being run, and the opposition sees a golden opportunity to breach these "safe deposit" voter banks and secure votes for Ma
A worker carrying oil palm fruits at a Felda plantation in Klang, Malaysia. Felda settlers are disgruntled at how the agency is being run, and the opposition sees a golden opportunity to breach these "safe deposit" voter banks and secure votes for Malaysia's next election due by August next year.PHOTO: REUTERS

Malaysia's next general election has been touted as the big fight for the hearts and minds of the country's Malay majority. While the ruling administration led by Umno continues to roll out pro-Malay socio-economic measures and champion Malay rights, the opposition coalition, emboldened by former Umno strongmen, is tapping into the community's discontent over rising costs and financial scandals. In the second of a two-part series, The Straits Times examines the issues affecting the rural Malay heartland of Felda plantation settlers.

A poorly lit makeshift stage in a sleepy hollow fringed by oil palm estates seems an unlikely setting for a political battleground.

But last Friday, this spot in the small town of Jerantut in Pahang state was the latest stop of Malaysia's opposition leaders on a nationwide roadshow to convince 1.2 million voters to ditch the ruling party they have owed decades of their livelihood to.

Just five years ago, the opposition would not have been able to set up a rostrum here, let alone draw an audience of 500.

Settlers in these parts, and in dozens of similar land schemes all over the country, have the Federal Land Development Authority (Felda) to thank for their homes, plantations and income, earned mainly from farming cash crops. And for the past 60 years, they have shown their gratitude by returning the ruling coalition Barisan Nasional to power in almost all of the 54 parliamentary wards - nearly a quarter of the entire legislature - where Felda is present.

But these Felda settlers - ethnic Malays who are beneficiaries of the country's affirmative action policy - are now disgruntled at how the agency is being run. And the opposition, led by former prime minister Mahathir Mohamad no less, sees a golden opportunity to breach these "safe deposit" voter banks and secure votes for Malaysia's next election due by August next year. Even the Chinese-dominated Democratic Action Party has formed a bureau to assist Felda settlers.

"I'm unhappy with what's happening in Felda," said Mr Zawawi Ishak, 57, who complains that Felda has not paid him on time since 2015.


Settlers are given 4ha of land and financial aid for fertiliser purchases, home ownership, infrastructure and even general household expenditure, as well as productivity bonuses. The settlers sell their crops - mainly oil palm fruits - to Felda and receive payment after deducting repayment on their loans.


  • • Established in 1956 based on a proposal mooted by former prime minister Tun Abdul Razak, father of Malaysia's current leader, Datuk Seri Najib Razak.

    • Scheme was developed to assist poor Malays by resettling them in oil palm and rubber plantations, in the hope of eradicating poverty through economic empowerment.

    • There are over 112,000 settler families nationwide, amounting to 1.2 million voters or 9 per cent of Malaysia's 13 million registered voters.

    • Felda schemes are scattered across 54 parliamentary constituencies, or nearly a quarter of the 222 seats in the federal Parliament. To run the government, a simple majority of 112 seats is needed.

    • Ruling coalition Barisan Nasional won 47 of these 54 constituencies in the 2013 general election.

    • With over 900,000ha of land in Malaysia and abroad, Felda is one of the world's largest palm oil producers.

    • Settlers own 480,000ha of the land, with the remaining land operated commercially by Felda's listed subsidiary, Felda Global Ventures.

    • Plantations are located in rural or semi-rural areas, and are mostly isolated. Basic amenities are available, including shops, schools, mosques and clinics.

    • Felda provides land and loans for house repairs, fertiliser and expenses during planting season. In return, settlers can sell their oil-palm fruit only to Felda at a price dictated by the company.

    • Politics is closely intertwined with these plantations. Many heads of Felda schemes hold positions within local Umno branches. The political party also collaborates with Felda-based associations to host community events for settlers.

But in recent years, a combination of lower palm oil prices, poor plantation management and financial mismanagement at Felda has meant that these settlers now find it hard to make ends meet, leaving many of them with crippling debts.

First, what used to be daily payments for crops sold to Felda were converted into monthly payments.

These payments, in turn, have shrunk because of lower palm oil prices. One settler reported taking home only RM317 (S$100) a month late last year, the equivalent of less than a tonne of fresh oil palm fruit. Felda estimates that up to 15 tonnes can be harvested each month from the 4ha plots.

"The replanting is not done well, resulting in low yields. Then the fertiliser is not good, the land is overgrown with lalang (weeds) and yet, after four to five years, before the trees are fruiting, the settlers are handed a debt of RM150,000," opposition lawmaker Rafizi Ramli told The Straits Times.

In 2012, Felda injected its palm oil business into its subsidiary, Felda Global Ventures Holdings (FGVH), which was then listed on the Malaysian stock exchange. This made FGVH the largest crude palm oil producer in the world, milling fruits from 425,000ha of land it directly controls and another 480,000ha owned by 112,635 Felda settlers.

The listing, which raised RM10.5 billion, handed settlers a windfall payment of RM15,000 a family and the chance to take up an interest- free loan to buy 800 FGVH shares worth RM4.55 each.

But Felda's fortunes, as well as those of the settlers who depend on it, went south soon after.

FGVH shares have lost two-thirds their value since listing. Those paying RM50 a month to fund their share purchase have only a few hundred ringgit in equity to show for it after four years.

Many complained that they were forced to buy the shares.

"We were promised a return on investment, but the shares are so low now, there's nothing to reap and we can't afford to sell them off," said Mr Mohamed Ibrahim Aderani, 68.

According to its last audited records in 2014, Felda is now RM6 billion in debt with annual negative cash flow in the billions. The government admitted in Parliament last year that settlers owe RM5 billion largely because of replanting costs, and also because of home loans and fertiliser purchases.

A government audit last year found that the agency invested in dubious projects under the leadership of former chairman Mohd Isa Samad, who was appointed in 2011. These included forays into data management, broadband Internet and sturgeon farming, which collectively lost more than RM100 million.

The government replaced Tan Sri Isa with veteran lawmaker Shahrir Samad on Jan 6, and the former Cabinet minister immediately got to work by sacking the entire board of Felda's investment arm.

"Any problems that appear will be seen as an opportunity for the opposition," Tan Sri Shahrir told The Straits Times, adding that he has been given a year to fix the company's troubles.

If he fails, the government's 2013 majority win of 133 of 222 seats in Parliament could be under threat. All it would take is for 22 Felda enclave seats to go to the opposition and the Umno-led ruling coalition would fail to maintain a simple majority in Parliament.

Still, it will be an uphill battle for the opposition. Just 400m away from their no-frills gathering last Friday, Umno put on a free concert for Felda residents. There were brightly lit tents, free food and lucky draws offering prizes such as Samsung smartphones, tickets to football matches, Muslim pilgrimage packages and motorbikes.

Watching a singer croon on stage, some settlers said they remain grateful to the agency and loyal to Umno. "Things weren't great under the previous chairman. But I'm still thankful to Felda for the help we got," said Mr Ramli Ahmad, 67.

A version of this article appeared in the print edition of The Straits Times on February 08, 2017, with the headline 'Felda settler woes give Malaysian opposition way in '. Print Edition | Subscribe