PARLIAMENT | Putrajaya is looking at various means to reduce the debt holding of Felda settlers, according to a parliamentary written reply by the Economic Affairs Ministry.
This was in response to a question by Umno Kota Tinggi MP Halimah Mohamed Sadique, who asked about Pakatan Harapan's 100-day manifesto pledge to do away with "unnecessary debt" held by Felda settlers.
The ministry said the bulk of settlers debt was for operational costs, as well as living costs during the replanting of oil palm trees.
Debt incurred by settlers during the replanting period could run up to RM129,600 over eight years, and the revenue generated during this period can only partially cover the loan, still leaving them around RM63,200 in debt.
The ministry said it is looking at revising the interest rate on this debt, which amounts to 6.25 percent per annum on the reducing sum.
"While the Felda management is of the view that the interest is reasonable, the ministry is revising the rate to ensure that it is fair to settlers," it said.
The Economic Affairs Ministry said other forms of debt held by Felda settlers include loans for fertiliser, and other expenses like home expansion, university fees, entrepreneurial projects, computers, and Felda Global Ventures shares.
It said these loans were mostly interest-free.
However, the ministry said it is working to help boost the revenue of settlers, including improving Felda's efficiency, so that a higher margin of profit can help pay off their loans.