Marginal land has big potential
KUALA LUMPUR: The Federal Land Development Authority (Felda) is seeking investors in durian farming, cash crop banana planting and bird’s nest harvesting to maximise the potential of its marginal land.
“We are in talks with investors who have shown an interest to plant durians in parcels that receive less rainfall,” said Felda director-general Datuk Dr Othman Omar.
“There are people who have approached us to jointly plant bananas and sorghum as cash crops on marginal land. There are also bird’s nest entrepreneurs who are keen to lease settlers’ land.
“Oil palm and rubber have been trading at low prices for some time. In these tough times, we want to help settlers to be involved in cash cropping to maximise the potential of a marginal land,” he said in an interview with the New Straits Times Press recently.
Established in 1956, the Felda scheme assisted poor Malays 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 locally, 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 run by FGV Holdings Bhd under a land lease, which was established in 2012, for 99 years.
Another 475,000ha is appropriated to Felda settlers, while Felda’s own managers operate the remaining 40,000ha.
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 fluctuates 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, and FGV as lessee. This led to the lease being considered a liability in FGV’s books, but an asset in Felda’s.
Up to December 2016, FGV’s long-term land lease liabilities stood at RM4.13 billion, the largest component of its longterm debt.