| Established: | July 6, 1956 |
| Activated: | July, 1958 |
| Chairman: | Tan Sri Dr Mohd Yusof Noor |
| Previous Chairman: | Tan Sri Muhammad Alias bin Raja Muhammad Ali |
| Budget: | RM1.5 billion (2005) |
| Employees: | 615 (2006) |
The Federal Land Development Authority (more commonly referred to as FELDA) is a Malaysian government agency handling the resettlement of rural poor into newly developed areas. It focuses on opening smallholder farms growing cash crops. FELDA's schemes are generally open only to ethnic Malays, who form a majority of the Malaysian population.
FELDA is the world's largest plantation operator, with 811,140 hectares (2,004,400 acres) of oil palms, mainly across Peninsular Malaysia while making less presence in Sabah and Sarawak.[1] It also operates plantations and oil mills in Indonesia. Although FELDA is mainly pre-occupied with alleviating rural poverty through resettlement, it reportedly holds a minority stake in some major Malaysian banks.
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FELDA was formed on July 1, 1956 when the Land Development Act came into force.[2] Its initial capital was M$10 million, and the first FELDA settlement, comprising 2946.88ha of land and focused on rubber, was opened at [[Lurat Bilut[3][4]]] the following year. In 1958, five similar schemes were opened. [5]
In the 1960s and 1970s, government policy began to emphasise crop diversification, in an effort to avoid being affected if the world price of rubber were to drop precipitously. In 1961, FELDA's first oil palm settlement opened, with 3.75 square kilometres (1.45 sq mi) of land. As of 2000, 6,855.2 square kilometres (2,646.8 sq mi) (approximately 76%) of the land under FELDA's programs are devoted to oil palms.[5]
FELDA focuses mainly on West Malaysia (Peninsular Malaysia); other government agencies are responsible for land development in the states of Sabah and Sarawak, which form East Malaysia.[6]
Settlers are drawn from rural Malay poor.[7] They should be aged between 21 and 50 years, married, and physically fit. Priority was given to those who did not own any land to farm.[5]
New settlers are assigned to a particular settlement, and are given 10 acres (4.0 ha), 12 acres (4.9 ha) or 14 acres (5.7 ha)[8] of land to cultivate usually either rubber or oil palms.[9] All settlers must reside at the settlement itself, and are allotted .25 acres (0.10 ha) in a planned village, where their home — already built by FELDA — is located. Although basic infrastructure, such as piped water and electricity, used to be lacking,[10] nowadays such facilities are readily provided. Schools, medical centres, and places of worship are also provided.[11]
Originally, FELDA schemes were designed as co-operatives, where instead of each settler owning a defined piece of land, each settler held an equal share in the ownership of the particular scheme. However, the settlers did not prefer this scheme, as workers who did not tend to the land properly still benefited (a sort of free rider problem). The government then set up a 3-phase plan, where in the first phase, the co-operative remained as a mechanism for the settlers to learn how to farm. In the second phase, each settler was given a specific plot of land to work, and in the third phase, he was given the land title to that plot.[5] However, the settler was forbidden from selling the land without permission from FELDA or the federal government.[12]
The costs of acquiring, developing and allocating the land are borne by loans made to FELDA settlers. These loans are repaid in monthly installments deducted from the settlers' income over a 15-year period.[10]
Although settlers are supposed to focus on agricultural activities, it has been reported that a substantial number are also engaged in other activities, such as shopkeeping. Some are even employed in jobs outside the settlement.[10]
In recent years, the growth of urban areas has led to a substantial increase in the land value of some settlements. With permission, many settlers have sold their farms, becoming instant millionaires.[5]
FELDA has diversified from its original business of land development, to other economic ventures — some of them entirely unrelated to land resettlement. Although FELDA has subsidiaries involved in businesses such as marketing, transportation, milling, etc.[5], it also reportedly has a stake in some major Malaysian banks, such as Maybank.[13]
FELDA does not really make a significant presence in Sarawak. There is only one FELDA in Sarawak, which is located at Kampung Sampadi, Lundu District. However, the status of this FELDA land is still disputed between being a settlement or plantation-only scheme. Local villagers who are hired to work here was not being given any of the lands provided, unlike their counterparts in West Malaysia.
SALCRA (Sarawak Land Consolidation and Rehabilitation Authority), a state government agency is more prominent in developing agricultural lands for palm oil plantation use in Sarawak compared to FELDA.