Felda's defining choice: Commercial viability or endless obligations

The Federal Land Development Authority (Felda) faces a crucial decision that will determine its long-term success: whether to focus on commercial viability or continue bearing endless obligations. This challenge stems from the agency's mandate, which has evolved over the years to encompass a wide range of responsibilities beyond its original social and economic purpose.

With the release of its 2019 White Paper and the delisting of FGV Holdings Bhd from Bursa Malaysia, the government is working on a new strategic direction for Felda. The key issue is how to achieve financial sustainability while meeting the needs of settlers and future generations. One proposed solution is a long-term leasing model, which would allow settlers to retain ownership of their land while Felda manages the plantation operations.

However, the success of this model depends on resolving the fragmented land ownership that has resulted from decades of individual titles and inheritances. Replanting old trees can cost up to RM36,000 per hectare, and Felda must continue supporting settlers during this period, creating a significant financial and social burden. To redefine Felda's mandate effectively, the government must review the legal framework governing the agency and its land-management structure.

This includes amending the Group Settlement Areas Act 1960, the Federal Land Consolidation and Rehabilitation Authority Act 1966, and the National Land Code 1965. The amendments should clarify Felda's commercial responsibilities and delineate the roles of the government or other public agencies in funding social or developmental functions.

By separating ownership, management, and income distribution, Felda can focus on running and improving its plantation operations while protecting the economic interests of settlers.