Ministry open to alternative NCR joint venture devt models
THE Ministry of Modernisation of Agriculture and Rural Economy is open to alternative development models to benefit both landowners and investors based on a ‘win-win’ formula through maximum returns and a viable business arrangement.
Its minister Datuk Amar Douglas Uggah Embas said the first initiative to develop NCR land for plantations was NCR Joint Venture introduced in 1995, whereby NCR land was tied to venture projects for a period of 60 years.
“One of the major weaknesses of the joint venture concept is the dissatisfaction among the participating landowners over the uncertain, inconsistent and low financial returns received over the years,” he said.
Although landowners had benefited through the introduction of the new Incentive Payment Scheme in 2015, the ministry felt there was a genuine need to review the joint venture concept so that improvement or better alternatives could be adopted to further improve the returns for landowners.
As such, under the proposed Leasing Model, landowners would rent their land to investors at a fixed monthly rate per hectare over a lease period of 25 to 30 years, which would be based on the key principle that any alternative approach should be better off than existing models in terms of higher returns for participating landowners.
Uggah said the Leasing Model was actually not a new model; it was being practised by many in the private sector.
“Our analysis shows that on average, the yearly income per hectare received by the landowners under the private Leasing Model over the 25-year period ranges from RM720 to RM780.
“We are confident that this alternative model is more attractive to the landowners as it will provide regular and assured returns. We will continue to engage with potential investors and landowners to fine-tune the model,” he said in his ministerial winding-up speech yesterday.
Uggah who is also deputy chief minister, said NCR land development was one of the strategic thrusts under the state’s Socio-Economic Transformation Plan ( SETP) to transform vast tracts of idle and unproductive NCR land into viable economic units and income- generating activities.
It is estimated that there are about 1.5 million hectares of NCR land in the state. However, only 328,000ha have been developed and planted with oil palm by independent and organised smallholders through collaboration with various implementing agencies.