New Straits Times (30/09/2020) LETTERS: On the reforming and restructuring of Felda, apart from privatisation, it is suggested that other basic options or models for changing Felda as a statutory body and agency formed under the Land Development Ordinance (1956) should be as follows:
Be a government-linked company (GLC);
Act as government-linked investment company (GLIC);
Full blown corporate entity;
or A trust.
Only the trust model would enable the interests of all stakeholders — defined as the government (not only federal but state as well), smallholders, other players and the nation writ large — to be properly balanced and allow for the retention of the original vision and mission of Felda as the premier state-sponsored agri-business organisation for smallholders.
It would preserve what is rightfully a social contract in its own right between Felda and the smallholders, embodying and giving concrete expression to the socio-economic dimension of the wider social contract that is embedded in our Federal Constitution.
A point to remember — it is also the world's most successful resettlement and land development scheme as acknowledged by the World Bank. To be sure, this trust model would incorporate the best of all worlds.
Felda would become a semi-government trust entity acting as agent and mediator on behalf of both the government and smallholders.
The transformation into an autonomous and semi-independent trust, or Yayasan, should be based on a mixture of secular and Islamic principles, where relevant, including the principles of waqf as suggested by Professor Dr Ismail Omar, president of the Land Professionals Association of Malaysia (Pertama).
This trust model would infuse greater accountability, competency and transparency into Felda and combine the best of both public and private governance styles and practices.
Towards that end, technocrats, civil servants and corporate figures, both retired and serving, should be brought in to helm and manage Felda as a trust entity shorn of political pressure and influence. The chairman of Felda should no longer be a politician.
The new plantation model should maintain palm oil as a primary driver of income but integration of all the streams should be deepened.
The research and development and production of biofuel, for example, are an integral and inseparable component of the overall oil palm/palm oil industry which must continue to be the "centrepiece" of the Felda story.
All of this in the context of Felda Global Ventures, as the main arm of Felda, being de-listed and going private.
Its revenue would be recycled back within Felda itself into a semi-sovereign wealth fund where a fixed or variable allocation is reserved for Felda smallholders and their families.
It's Felda's revenue and income that's to be "privatised", in the final analysis. The government could be less reliant on Felda in terms of exports earnings, which can be channelled back to the settlers and more focused on the investments, including in green energy and renewables, made by the semi-sovereign wealth fund.
In short, to move forward, we need to go back to basics. Hopefully, the new deal that the Felda Task Force will be releasing in due course reflects this.
Read more at https://www.nst.com.my/opinion/letters/2020/09/628369/trust-model-suits-felda-best