Taking Felda forward the smart way

Business model includes long-term rental plan and cash crops for higher income

PETALING JAYA: Felda will formulate a new business model whereby the government manages the settlers’ land through a long-term rental arrangement. And cash crops would be planted, all aimed at generating higher incomes for the settlers.

By doing this, the government will address the issue of ageing settlers and the shortage of new ones besides ensuring that their land is managed efficiently and on a bigger scale.

This is so that the economies of scale can reduce operating costs.

The success of the new Felda model hinges on the optimum consolidation of land – and the new model is designed to ensure profit for all parties, particularly the settlers.

Settlers will have to be made to understand the benefits of the new model for its ability to generate higher and consistent incomes.

Settlers who are able and want to toil their land will be given the opportunity, subject to the criteria that have been put forward.

Felda will also pay attention to the core activity of plantations and will be the largest manager of farming land in the country.

Felda will also be raising initiatives to generate more income by diversifying into cash crops. By doing so, these will raise the production of food, increase exports and reduce the country’s dependence on imported food.

The agency will also ensure that the replacement planting and livestock programme will generate a harvest within a short period of time. And these are able to deliver on cash flow fast and consistently.

Among the replacement plantings are fruits, vegetables and kenaf, products that will help reduce dependency on oil palm and rubber. The efforts will be executed with the cooperation between government agencies and the private sector.

Moving into cash crops is a given, considering that the price of oil palm is dependent on world prices that are uncertain and subject to risks such as low demand from importing countries, trade restrictions from Europe and volatile CPO prices.

The replanting programme will also alleviate the pressure on settlers as a result of fall in commodity prices.

The pioneer programme to diversify crops has been done by Felda Bukit Rokan and will be expanded to other lands in the Felda scheme.

These will be conducted with the cooperation of stakeholders and the private sector through integrated planting and urban industries.

Through the new model, settlers who choose the long-term rental arrangement will receive a lease payment and dividends from the profits of the cooperation. This will enable them a steady income.

The settler’s cooperative in each Felda scheme, including Koperasi Permodalan Felda Bhd, will be strengthened with the involvement of the original and new generations of settlers in the management, investments and businesses that are operated by Felda.

Through this system, Felda will also produce more professional farmers who can contribute to their community’s progress.

The new business model is also expected to address demographic issues of settlers.

The majority, aged 60 years and above, can no longer manage their estates and have been burdened with debt.

Accordingly, the management of the settlers’ farms by the cooperative would enable the older farms to be run professionally.

Besides these, existing plant management systems will be reviewed and improved constantly.

This review will also pay attention to the issue of overlapping – of farm management functions – to optimise resources.

The use of mechanisation and automation technology will be expanded to improve productivity and reduce production leakage.

In addition, an effective crop monitoring system will also be created to monitor the harvests. Smart farming is the new way.