Economists have suggested that the Federal Land Development Authority (Felda) delve into the agro-food sector to help Felda settlers and the country with its trade deficit.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid highlighted Malaysia's widening trade deficit in foodstuff, which reached RM32.3 billion last year from RM1.1 billion in 1990.
He said agro-food products like chilli and round cabbage had a low Self-Sufficiency Ratio (SSR) of 29.7 per cent and 45.6 per cent in 2022, respectively.
Livestock products have even lower SSRs at 14.7 per cent and 8.7 per cent in 2022.
Malaysia's Imports Dependency Ratio (IDR) for all onions is 100 per cent.
"Malaysia is relying on food imports. It is imperative for Felda to look at agro-food production to address the food gap in our country and diversify the crops portfolio," he told the Business Times.
Malaysia University of Science and Technology economist Dr Geoffrey Williams proposed a strategy of responsible privatisation to drive social and development goals.
Felda was established to help the government achieve some targets for social, environmental and governance issues in plantations, but Williams said there were more effective ways to achieve them without direct government involvement.
"Responsible privatisation, as I suggested in a report for IDEAS in 2019, is a better way of achieving social and development aims by incorporating environmental, social, and governance issues into the privatisation of subsidiary companies."
He proposed that subsidiaries, especially those in Felda settler companies, be privatised to help them become entrepreneurs rather than depend on the government as pseudo-employees.
To facilitate this transition, he said a panel of independent experts should be set up by the Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi to provide fresh ideas and perspectives on issues facing Felda and its settlers.
"There must be low-tax, low-regulation reforms to make plantation communities attractive places to invest with an agile, competitive, creative and innovative business ecosystem."
Earlier, Zahid told Bernama in a special interview in conjunction with the Bumiputera Economic Congress 2024 that the government would announce several new approaches to benefit Felda settlers next week.
He said he was determined to implement immediate changes to Felda, especially regarding the net income of Felda settlers, so that they could get out of the hardcore poverty group.
Regarding Felda's declining performance as reported in the 2022 Auditor-General's (AG) Report, Zahid, who is also rural and regional development minister, said the responsibility of restoring the agency would be seen in the aspect of settlers and companies under Felda.
"The responsibility to restore Felda is not seen in terms of its production, (but) the focus must be on the settlers.
"Secondly, we should look at companies under Felda, such as FGV Holdings (FGV Holdings Bhd) and MSM Malaysia Holdings Bhd."
The AG's Report on the financial statements of federal agencies for 2022, tabled in Parliament on March 6, showed that Felda suffered an after-tax loss of RM1.005 billion.
Regarding the circular economy in Felda, he said that the
concept was a new aspect which needed to be promoted, and Felda chairman Datuk Seri Ahmad Shabery Cheek presented it at the 2024 Bumiputera Economic Congress.
Meanwhile, Zahid said the government needed to encourage industry in Felda so new-generation settlers did not migrate and contribute to urbanisation.
"This can be done by providing incentives to domestic or foreign investors... for the industry to be brought to the Felda area."
He said digital transformation also needed attention in the Felda settlements because it was the main need for the second- and third- generation settlers.
"Digitalisation has to be fair, especially in villages and Felda settlements."
On the issue of land ownership related to the heirs of Felda settlers, he said: "The Felda Act itself, we have received a proposal to amend it, including in the matter of second-generation ownership... Things like that should be looked at in more detail."