'Felda forcing lower prices on settlers as income falls'

PKR is crying foul over Felda's move to impose a forced discount on the buying price of fresh oil palm fruit, which will badly hit Felda settlers who grow and sell the crop.

"Felda is blatantly ignoring prevailing market prices and will merely pay the settler approximately 10 percent less than market price," Lembah Pantai MP Nurul Izzah Anwar told a press conference at the Parliament lobby this morning. 

This, she said, was based on a memo sent under the letterhead of Felda Palm Industries Sdn Bhd.

The memo informs sellers that effective Oct 1, the revised buying price of fresh fruit bunches (FFB) will be based on the current market price of Crude Palm Oil (CPO) minus RM200 per tonne.

"This pricing is used due to the unstable market situation and low demand," read the letter, that Nurul Izzah distributed to the media.

"Since last month, settlers are already feeling the pain, seeing their earnings drop dramatically by 50 percent (due to global prices). 

“This latest move by Felda is the proverbial double whammy as the Malay saying goes: 'sudah jatuh, ditimpa tangga' (adding insult to injury)," she said.

Nurul Izzah, who is also PKR vice-president, explained that most of the settlers had no choice but to only sell to Felda due to the proximity of the latter's factory while others are contracted to sell to Felda to service their debt.

"This is in fact monopolistic, leaving settlers at the mercy of Felda," she said, adding that PKR lawyers will be studying if this has breached the Competition Act.

'Overriding majority interest'

Nurul Izzah added that the unilateral buying price cut also raises a legal issue as the letter was signed by Ismail Hasan, the chief executive officer of Felda Global Ventures Plantation (Malaysia) Sdn Bhd (FGVPM), a subsidiary of Felda Global Ventures Holdings (FGVH).

"We wish to point out that Felda Holdings is in fact 51 percent owned by the settlers and only 49 percent by FGVH... Why is the minority shareholder (FGV) overriding the majority settlers' interest and dictating the discount at the expense of the settlers?

"If prices of CPO drops, shouldn't everyone equally share the burden? Why should settlers be made to take on more than its share of the burden? This is pure and simple, a case of corporate greed bullying settlers," she said.

Nurul Izzah called on the government to issue a warning against Felda and FGVH to reverse the notice.

Also present at the press conference was PKR investment and trade bureau chief Wong Chen (left), who welcomed the government's announcement that it will be abolishing the CPO export quota -dubbed as CPO Approved Permits by PKR - after the party raised the issue.

However, he stressed that the abolition should be implemented immediately.

He also reiterated the need for the government to reveal the present list of export quota recipients, alleging that cronies were among the beneficiaries.