IN the 1950s, there was poverty in Malaya, much of it in the rural areas.
Cash crop cultivation to eradicate poverty was a brilliant idea thought up by the late Tun Abdul Razak Hussein, our second prime minister, when he was the deputy prime minister and minister of rural development.
Thus was born the Federal Land Development Authority (Felda) in 1956. It was a master stroke by a compassionate heart.
It would have remained so if only those who had been trusted with helping the rural poor stayed on the straight path.
Like in some fiction that is thick in plot, the Felda narrative soon turned into a gripping whodunit.
Today, the noble dream of Air Lanas in Kelantan — the first Felda settlement — has been turned into a nightmare by the machinations of men.
Now in 2019, it is starting over time again at Felda, more repair than rejuvenation.
Thanks to some very twisted plot. Pun intended.
Things began to go very wrong when FGV Holdings Bhd (formerly Felda Global Ventures Holdings Bhd) was listed in 2012 on the Main Market of Bursa Malaysia in a RM9.93 billion initial public offering, the second largest in the world after Facebook Inc.
The scale itself raises some questions, but that is perhaps a subject for another Leader.
FGV turned out to be the third largest oil palm producer in the world too. The Middle-Eastern habit of doing things big arrived early in Malaysia, we have to say.
Was the listing of FGV a bad idea?
People familiar with the plantation business think not, though there have been media reports saying that the floatation was a mistake.
The fault was more in the assets that FGV acquired, overvalued many times and bought at great premiums when there was no single reason to.
The nature of the businesses acquired, too, was suspect.
But coercing the non-market savvy settlers into buying the FGV shares must certainly rank as a terrible mistake, though most subscribed less than a lot. Some 800 units of shares to be exact.
That, too, was a lot, given their low income.
In 2017, this was calculated to be RM219 million. The IPO reference price of FGV was RM4.55 per share in 2012, and, as the Leader went to press, it was trading at RM1.19.
A whammy by any measure.
Notwithstanding the share purchase, a big chunk of the settler’s debt is the loan taken to cover the cost of replanting, maintenance of smallholdings and cost of living loan at RM1,500 per month for three years.
In 2017, the debt was calculated to average RM54,000 per settler. Low crude palm oil prices made the settlers’ lives even more challenging.
In July of that year, CPO prices hit a low of 22 per cent. A double whammy, to continue the metaphor.
Like it or not, the government has to do what it got to do: put Felda and its settlers back on their feet again. Because not helping Felda means leaving behind more than 2.6 million people in the bottom 40 per cent of the population (112,638 settlers and their dependants).
This is a huge number of people to leave behind.