The Institute for Democracy and Economic Affairs (IDEAS) lauded the government’s move to set up a task force on Felda as a follow up to the Felda white paper tabled in the Dewan Rakyat last year.

The task force is expected to table its findings, including measures to ensure Felda’s sustainability and propose a new Felda model.

“The government should confirm its future policy direction for Felda, including a commitment to a clear timeline and implementation plan,” IDEAS said in a statement.

According to a published government-linked companies (GLC) monitor co-authored by James Chin of the University of Tasmania and Zulaikha Azmi of IDEAS, the current Felda model is no longer applicable moving forward.

“The continued dependence on crude palm oil (CPO) exports is unlikely to be sustainable and product diversification is needed to improve resilience.

“Palm oil prices depend on the global price which has fallen because of the end of a commodity super cycle and global demand for palm oil is unpredictable at best.

“This affects Felda’s earnings and the income of settlers which remain vulnerable to palm oil price swings,” the report said.

IDEAS said the previous efforts to diversify Felda’s income through commercialisation have not been successful in improving productivity and socio-economic outcomes.

It said the proliferation of the Felda subsidiaries has resulted in unrelated business areas.

It noted that demographic shifts such as heavy reliance on foreign workers and the migration of younger generation of Felda settlers to urban areas have raised the relevance of Felda in meeting its socio-economic objectives.

“The model has not resulted in a sufficiently attractive prospect for younger generations to continue working on the plantations,” IDEAS said.