Federal Land Development Authority (FELDA)
Malaysian Government Agencies in Palm Oil Industry
• Federal Land Development Authority (Felda)
• Malaysian Palm Oil Board (MPOB)
• Department of Environment (DOE) Malaysia
• Natural Resources Environment Board (NREB)
• Environment Conservation Department (ECD)
Felda in the palm oil supply chain
Through companies under Felda Holdings Sdn Bhd, Felda is involved in most aspect of the palm oil supply chain, from the production of planting materials to trading of its edible oil products and oleochemicals. Felda Plantations Sdn Bhd develops and manages plantations on a commercial basis
The total land area developed for various crops by Felda at the end of 2000 was 811,140 hectares, of which 80.8% was planted with oil palm and 18.4% with rubber. Of the total planted area, 55.1% or 447,223 hectares have been emplaced with settlers in 275 schemes while 354,547 hectares without settlers are managed as commercial plantations by Felda Plantations Sdn Bhd.
Emplacement of settlers has been one of the primary functions of Felda. Each settler is allocated an agricultural area of four hectares and a house lot of 0.10 hectare. The first batch of settlers was emplaced in Felda Bilut Valley in Pahang in 1958. In 2000, a total of 103,001 settlers have been emplaced in 275 schemes, of which 67% have been planted with oil palms.
Felda spends about RM 50,000 to emplace a settler and his family in the scheme; this includes the cost of infrastructure, agricultural development and the cost of land allocated. Each settler has to repay 58% of the total costs over a period of 15 years after the agricultural area has commenced production. At the end of 2000, 67.2% of the settlers (65,296) have repaid their dues and have been given the title for the ownership of the land by the respective state governments where the scheme is located
Felda consists of the Smallholder Division, which is referred to as Felda and the corporate arm, under Felda Holdings Sdn Bhd which has a paid up capital of RM 200 million, 51% of which is held by Felda Investment Co-operative (KPF) and 49% by Felda. KPF is an investment fund belonging to settlers and staff of Felda.
Felda is responsible for the management of the settlers’ agricultural schemes from land clearing to replanting after the full crop cycle. These operations are conducted through 10 regional offices.
Felda Holdings Sdn Bhd is the holding company for 36 wholly owned and associate companies which are divided into the Plantations Group, Palm Industries Group and Enterprises Group. In the Plantations Group, Felda Plantations Sdn Bhd. Manages 258 plantations covering a total area of more than 354,000 hectares while Felda Agricultural Services Sdn Bhd is involved in agricultural research and production of planting materials and provision of agronomic services and agricultural supplies.
The development budget is provided by the Federal Government; in 2000, this amounted to RM 1.26 million. The total amount spent on land development and settlements until 2000 was RM 8.998 billion, 89% of which was provided by the Government while the balance was from agencies such as the World Bank (6.0%) and from replanting grants. Of the total amount withdrawn, 54.7% was from loans while the balance was in the form of grants.
Federal Land Development Authority (Felda)
Among the public sector agencies, Felda (Profile GOV.1, page 110) has played the most significant role in the development of oil palm in Malaysia. In fact, it is the largest player in the industry in Malaysia, accounting for 17.7%2 of the total planted area (Table 11) and about 20.6% of the palm oil produced in Malaysia in 2001. Felda was the main land development agency that was established in 1956 with the socio-economic mandate of developing forest land for the resettlement. From its formation until the mid-eighties, Felda’s primary activity was the development of agriculture-based settlements, planted with plantation crops, initially with rubber and subsequently with other crops, particularly oil palm from primary forests and logged over forest land. The first planting of oil palm was on 8,100 hectares in the Taib Andak Complex in Pahang, Peninsular Malaysia in 1961. It spread its activities to Sabah in the early 1980s and had developed complexes at Umas and Kalabakan near Tawau and the Sahabat complex in the Dent Peninsular, east of Lahad Datu (Tunku Shamsul & Lee,1980).
Following a change in the organisation’s strategy in the 1980s, Felda changed its focus to commercial development management of plantations on a commercial basis. The 1980s saw rapid expansion in the area developed of oil but there had been no significant new land developments by Felda in the last decade and the major activity has been replanting of the older schemes in Peninsular Malaysia. The total area replanted until 2000 was 117,676 hectares (Felda 2000 Annual Report).
Under the current organisational structure, the Felda Group consists of Felda which is responsible for the management of the schemes emplaced settlers and Felda Holdings Sdn Bhd which is the corporate arm for the group. As at 2000, Felda has emplaced 103,001 settlers in 275 schemes, of which 67% have been planted with oil palm. Felda is also responsible for settler activities, which include settler community development, new economic activities to enhance settler income and education.
Felda Holdings Sdn Bhd is the holding company for 36 wholly owned and associate companies which are divided into the Plantations Group, Palm Industries Group and Enterprises Group. In the Plantations Group, Through these companies, Felda is involved in most aspects of the supply chain of palm oil. It manages 258 plantations covering a total area of more than 354,000 hectares, the produce of which are process in 72 palm oil mills, 6 kernel crushing plants, 7 palm oil refineries to produce cooking oil and 2 margarine plants. It also has refinery operations in Egypt and China. Felda is involved the production of palmbased oleochemicals through a joint venture with Proctor & Gamble. Various subsidiary companies provide support service to the core businesses. The group produces its own planting materials, fertilisers and other agricultural inputs, it has its own research and agricultural, engineering and construction services, transportation and bulking installations. At the end of the chain, Felda has companies for trading and marketing of its products. With the vertical integration of its activities, Felda is essentially an upstream and downstream producer.
Although Felda was established with loans and grants from the Federal Government and international agencies such as the World Bank, it has been self-financing for many years since managing its agricultural operations on a commercial basis. Profits generated from companies under Felda Holdings Sdn Bhd has been ploughed abck to the settlers and Felda through their investment in the Felda Investment Co-operative (KPF) which owns 51% Felda Holdings Sdn Bhd.
Federal Land Development Authority (Felda)
The Federal Land Development Agency (Felda) was established in July, 1956 under Land Development Ordinance (1956) under the Ministry of Land and Co-operative Development. It is the largest producer of palm oil in Malaysia, accounting for 18.7% of the planted area and 20.6% of the total crude palm oil production in year 2001 in Malaysia.
Vision / Mission of Felda include social-economic mandate of developing forest land for the resettlement the rural and landless poor.
Role and Function Felda’s original function was to channel financial assistance to State governments for land development programmes but this was changed in 1961 when it was given the responsibility for new land development and settlements for the whole country. Since the mid-eighties, Felda has focused on development of plantations on a commercial basis.
The objectives of Felda, as given in the 2000 Annual Report are:
• “To successfully manage established and developed agriculture areas through effective field management practices to increase settlers’ incomes by maximizing yields and minimizing production costs. • To contribute towards improving the settlers’ well-being by ensuring that they achieve a higher standard of living in a well organized and conducive manner. • To establish a dedicated and efficient management team capable of implementing all the activities as planned.”
Organization of Felda is administered by the Board which is responsible to the Minister of Land and Co-operative Development. Among the Board members is the Director-General of the Malaysian Palm Oil Board.
| INDEX : New Oil Palm | August 06, 2011 10:34:27 AM