In a statement posted on Facebook today, the Pekan MP said the sale of Felda’s key assets to improve cash flow was not advisable if what it was getting from these properties that had been earmarked for sale was higher than the amount needed to be paid to service the debts.

“From what I can recall, the interest rate for Felda’s debts is not at a high level as it was seen as a soft loan.

“It looks like Pakatan Harapan’s solution to all problems is to just sell off its assets,” he said.

Recently, the government announced that it would slash Felda’s debts by 15% to RM6.8 billion by the end of this year by restructuring loans and “offloading non-strategic assets” to improve its cash flow.

Najib said the debt issue must be understood in depth by the PH government.

He said RM6 billion of the RM8 billion debt was mostly loaned to settlers as funds to replant oil palm trees and for housing.

Najib said the loans for replanting were to help revive the oil palm industry and boost yields after government funding ceased in 1996 to focus more on industrialisation and car production.

He said yields had dropped to historic lows, affecting the livelihood of settlers. He said the government under his watch then offered funds to replant oil palm trees.

“If we did not carry out this replanting on a large scale at that time, we would have suffered from lower yields from these oil palm trees due to ageing trees and Felda would have ceased to exist in 10 to 20 years’ time.”

Najib said the investments on hotels in London, Sabah and Sarawak were not wasteful.

He said these hotels are still there and the money used to buy them had not gone “missing”, as alluded by the PH government.

Low prices for palm oil

Najib said Felda’s key issue was the low price of crude palm oil and low demand.

He said Intertek’s research had reported that Malaysian crude palm oil exports in the first half of October this year had dropped as much as 32.8% compared with last month.

Najib said exports of crude palm oil for this period were only 505,000 tonnes, lower than the 690,000 tonnes during the same period last year.

He said coupled with a low price of RM2,200 for a tonne of palm oil compared with RM2,700 per tonne last year, Felda settlers were jittery over their future.

“PH’s promise to get rid of settlers’ debts were not met, bonuses offered to them have dropped and the BR1M (1Malaysia People’s Aid) payouts might be shelved.

“On top of that, palm oil prices have gone lower and the current government is late in paying the monthly cost of living aid to these settlers,” he said.

Felda has 112,365 settlers nationwide.

Bio-diesel can boost demand

Najib said there were three ways to resolve the situation without selling any assets and the government could earn a lot from tax revenue from palm oil if the plans worked out.

• The government could inject some funds into Felda as it was a government agency after all.
• Malaysia should mend its ties with China by stopping claims that it has cheated Malaysia in the proposed rail projects and end political polemics against the country. “If China does not buy palm oil from us, they can go to our neighbours or switch to other oils, such as soy oil and corn oil,” Najib said.
• Increase the palm oil content in biodiesel from 7% to 10%, as planned two years ago. Najib said the plan to switch to the B10 biodiesel did not work out two years ago as diesel became too cheap.

He said today, with diesel at RM2.18 per litre, it would be perfect to introduce the B10 biodiesel.

“The situation has changed now, with diesel prices high and palm oil low. There’s no reason we should not switch to B10 now.”