DAP has accused the federal government of sharply increasing sugar prices to boost the Federal Land Development Authority’s (Felda) profits.

In a statement today, DAP secretary-general Lim Guan Eng said the increase will directly boost Felda’s coffers through its ownership of MSM Malaysia Holdings Bhd, which is Felda Global Ventures Holdings Sdn Bhd's sugar-refining arm.

Lim argued that, since MSM had already posted a profit of RM232 million in 2010, Felda was capable of absorbing any subsidy cuts by the government.

azlan This was in view of the Domestic Trade, Cooperatives and Consumerism Ministry’s announcement that the 20-sen increase in sugar price per kilo would save the government RM116.6 million annually.

 

“What is RM 116.6 million compared to RM232 million in profits earned by MSM last year?" asked Lim.

“Instead of doing its corporate social responsibility to help Malaysians, especially the poor, Felda would benefit from the RM116.6 million extra to be paid by Malaysians."

Lim said that, rightfully, the federal government, if it needs to, can easily transfer the RM116.6 million to Felda, which it owns.

“Instead, in line with BN’s misguided and corporate-centric policy of helping the rich companies at the expense of poor ordinary Malaysians, BN has chosen to hit the pockets of 27 million Malaysians first, rather than the already huge profits of corporate giants such as Felda or MSM,” he said.

Federal gov’t controls sugar trade

MSM was originally controlled by Robert Kuok, dubbed Malaysia’s 'Sugar King', through PPB Group Bhd.

azlan But in 2009, PBB Group strangely sold its controlling stake of MSM, Grenfell Holdings Sdn Bhd, Kilang Gula Felda Perlis and a large plot of sugar plantation land in Perlis to Felda for RM1.5 billion.

The move has made the federal government the biggest sugar industry player in the country.

Since the acquisition of the Kuok Brothers' sugar holdings by Felda, sugar prices have risen from RM1.45 per kilo on Dec 31, 2009, to RM2.80 per kilo on May 9 this year.

The federal government said the “subsidy rationalisation” exercise was justified because its subsidy bill is burgeoning. It also said sugar prices in Malaysia are still the cheapest in the region.

As part of the same exercise, the administration has dramatically increased the price of fuel and flour as well through subsidy cuts.

IPPs first or people first?

Lim said the reduction of subsidies is unjustified because the federal government has yet to explain why gas subsidies of RM19 billion for independent power producers (IPPs) are yet to be reduced.

azlan Lim said the reduction in diesel and gas subsidies “of a few hundred million ringgit” will hurt ordinary Malaysians more than big companies.

“A more just and fair socio-economic policy should be to cut the subsidies of the rich first, instead of the poor.

 

“DAP calls on the BN government to withhold any action on cutting diesel or sugar subsidies that affect ordinary Malaysians until action is first taken to cut gas subsidies to IPPs.

“The failure by BN to do so clearly shows that BN is about Barang Naik instead of PR (price reductions),” Lim added.

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