Thorny Controversy - Raub Durian Farmers To "Lose" Land

Thorny Controversy - Raub Durian Farmers To "Lose" Land

Ok firstly, yesterday this news became hot among some people, especially in Raub. I have received Whatsapps and emails over this news :

KUANTAN: state government’s proposed land legalisation scheme 
will provide legitimacy and a win-win solution to all illegal farmers in Raub
said Royal Pahang Durian Group (RPD) and its partner State Agricultural Development Corporation (PKPP).

scheme announced by Mentri Besar last Thursday
farmers involved will not be evicted  
allowed to continue to farm subject to terms and conditions

RPD and PKPP stressed farmers are illegal
They have until Aug 9 to accept proposal or face enforcement 

June 24, state govt awarded Royal Pahang Durian Resources, PKPP 
lease and land use rights for 5,357 acres in Raub for 30 plus 30 years

tract illegally farmed by local farmers who cultivate mainly durian trees

The proposed scheme essentially entails:

Farmers granted sub-leases 10 plus 10 plus 10 years 
subsequent extension of 30 years subject to state 

In return, farmers must sell all durians to RPD Export at pre-determined prices

2021-2022 RPD will purchase Grade A Musang King at RM30/kg for 1st 2,000kg/acre 
pay SPV fixed “levy” on behalf of farmers as consideration for their usage of the land

beyond 2,000kg/acre Grade A Musang King will be purchased at RM40/kg

If shortfall of Grade A, Grade B Musang King as substitute
at RM18/kg and any excess of Grade B Musang King at RM21/kg

After 2022, RPD will purchase Grade A at mutually agreed prices 
subject to yearly revisions within an agreed price range

For this year only, farmers can sell all durians to anyone 
but must pay fixed lump sum of RM6,000 per acre to SPV

With legitimate status, farmers with assistance of SPV can obtain MyGAP cert
ensuring strict compliance with quality - a prerequisite for export

To ensure orderliness and complete supply chain RPD will appoint PAR Sdn Bhd
to undertake durian collection, sorting, grading activities jointly with local collectors 

PAR allowed to enter 50:50 JV with 10 selected durian collectors 
to undertake the tasks subject to approval from RPD Export

RPD Export to allocate 30% of collected fruits to be sold to them

(OSTB : At what price ? Buy from them at fixed RM30 per kg. Then sell 30% back to them at what price?)

RPD Group owns, operates and manages a 1,000-acre (404ha) plantation in Raub

25,000 trees have been planted in the area
When fully mature, can yield 3,500 metric tonnes of fruits annually

My comments :  Quite predictably this news has caused substantial concern among the durian farmers and has been highlighted by the local DAP representative, as reported here:

KL, July 15 — possible crisis over Musang King durians 

following Pahang govt’s formation of private corporation JV 
threatens livelihood of fruit farmers, according to Tras assemblyman Chow Yu Hui.

• DAP lawmaker says decision to lease 5,357 acres to recently formed RPD PKPP
• under statutory body PKPNP  
• together with Royal Pahang Durian Group
• was an unequal contract that sidelined the local durian farmers 
• who have been working the land for decades 
• and had helped develop and promote the durian industry.

argued unequal contract compels farmers to hand over durian harvests 
to the company at prices lower than market rate
on top of requiring them to pay an exorbitant rent of RM6,000 per acre this year alone

“Why is PKPP not assisting local Pahang farmers, protecting their rights?” he asked 

why state form JV with private corporation and 3rd party to develop durian industry

suggest Pahang govt use its agencies to collaborate with the farmers

Chow feared large private corporations gain unfair advantage over  farmers
resulting in monopoly of Musang King durian market

Without self-regulation under free market, price of durian likely to skyrocket 
durian vendors, durian processing plants might shut down 
due to lack of competition, as well as increased difficulty in collecting durians

in order to collect the unreasonable amount of durian as stipulated in the unequal contract, farmers might eventually be forced to plant low-quality durian trees that could produce a larger amount of harvest,” he said.

He said if his concerns played out, Malaysia could lose its reputation as the top Musang King producer in the world.

It is understood the acres in Raub under the awarded contract cover Sang Lee, Sungai Chetang, Tras, Sungai Ruan and Sungai Klau, for a period of 30 plus 30 years.

Chow said the state government should have prioritised awarding contracts to the local farmers and made use of their collective years of experience in producing quality fruits and established logistics network for the export market.

He claimed many local farmers had been applying to the state government for land rights but were repeatedly rejected, which led to their current quandary of being regarded as using the land illegally

(OSTB : So they have been applying for land rights. They could have been given 30 year leases. Tolonglah sikit.)

“The scheme of renting the land to a huge private corporation precisely and clearly proved the fact that illegal farms can actually be legalised.

“However, it appears that the state government favoured a large private corporation over the farmers who have been giving immense contributions to the local economy and that of the country’s,” he said.

Chow urged the affected farmers to unite and reject the unequal contract offered despite the looming August 9 deadline given by Pahang Mentri Besar 

“DAP is ready to provide any forms of assistance to protect the farmers from exploitation,” he added.

Well the Pahang State government is now under PAS. 
Bear that in mind.

Ok lets do some arithmetic first.

5,357 acres of Musang King x 2000/kg of durians per acre = 10.7 MILLION kg of durians per season.

If the company is going to pay RM30 per kg of durian, the company will need 10.7 million kg x RM30 = RM321 MILLION CASH to pay for all the durians EVERY SEASON.

RM321 MILLION !! That is a lot of CASH. 

What is the Paid Up Capital of this company?

Do they have enough cash to pay out RM321 MILLION every season?

Will they use their own money? (This is a State JV).

Will they borrow money? Who will lend them money?

Or will they take the durians first and THEN PAY THE FARMERS LATER?

Take the farmers durians, sell it, collect the cash and then pay the farmers later?

Is that fair? How long will the farmers have to wait before they get paid?

One day? One week? One month? Two months? 

Somehow this scheme reminds me a little bit of Low Yatt 2. 
Do you all still recall Low Yatt 2 ?

What happened to Low Yatt 2 ?

But I have a question.

The land is State land. 
The farmers have been farming the 5,357 acres most productively.
Raub durians are not only famous in Malaysia and Singapore but now in Hong Kong and China. These are among the best durians in the world. 

So what is the consideration paid by these new parties to suddenly acquire 5,357 acres of the best durian producing acreage in the country, if not the world?

Consideration means what do they pay in return for getting these 5,357 acres of fully productive durian land? 

This is not empty land or jungle land. 

The farmers have been spending time, energy and money for the past 30 to 50 years growing these durian trees. Shouldnt they be paid some compensation? 

The farmers may have a case to demand compensation. 
Perhaps through the Courts.

• The other question is if the State can give this JV company a 30 year plus 30 year lease what has the company done to deserve this lease? 
• Especially when compared to the farmers who have sweated blood, sweat and tears to develop the Musang King durian industry in Raub?

Since the State is already prepared to grant these 30 yrs plus 30 yrs lease why not give the 30 year lease directly to the farmers? 

Di mana hati perut Tuan-Tuan dalam kerajaan negeri pimpinan parti PAS? 

The farmers have already been sweating their blood, sweat and tears on their durian trees for 30, 40 or 50 years. It is their hard work. 

Since you have already decided to give 30 yr plus 30 yr leases, why not give it to the farmers?  It is only 5,357 acres. 

Pahang is the largest State on the Peninsula. 
Pahang has a size of 35,970 km² (13,890 sq miles).
Google says there are 640 acres per square mile.
This means Raub's 5,357 acres of durian is only 8.4 square miles.

Takkan tak boleh cari tanah 5,357 ekar yang lain dan buka lah dusun durian sendiri? 

Kenapa lah nak mengambil usaha orang lain?

Surely there must be some religion, some philosophy, some teaching that says that you should not take advantage of other peoples' blood, sweat and tears? There must be.

Try this for example, Surah 11:84 - 87  from the Quran :

11:84   To the people of Midian, We sent their brother Shuayb. He said, My people, serve Allah. You have no deity other than Him. Do not give short measure and short weight. I see you are prospering. I fear for you the punishment of a fateful Day.

11:85   O my people, [always] give full measure and weight, in all fairness and do not deny people by making short delivery, and do not spread corruption in the land.

11:86   What Allah leaves with you is the best for you, if you are believers. I have not been appointed as your keeper.

11:87   They said, Shuayb, does your SALAT tell you that we should abandon what our forefathers worshipped and that we should stop doing with our wealth as we please? You are indeed the only wise and rightly-guided man ?

In the Quran the prophet Shuayb's message is consistent :  "O my people, [always] give full measure and weight, in all fairness and do not deny people by making short delivery.."

In other words - just be fair lah.

Here is more arithmetic. In places like Raub, neighbouring farmers may have dealings with each other. Sometimes farmers cooperate to share labour, share machinery, lorries, resources, etc. They settle their debts by sharing the harvest.

Say there are two durian farmers who produce 1,800 kg per acre. Since they are below the 2000 kg / acre threshold they will be paid RM30 per kg. 

They each get paid 1800 kg x RM30 = RM54,000 per acre. 
Or a grand total of RM108,000 for their combined 3,600 tons.

Now lets say Ah Chong owes Ah Wong some debt. 
So Ah Chong lets Ah Wong take 500kg of durians per acre to settle his debt.  
So Ah Wong now has 1,800 + 500 = 2,300 kg of durians per acre.
Ah Chong has 1300 kg.

They both still sell a total 3,600 kg to the new JV company but the arithmetic has now changed :

Ah Chong 1,300kg x RM30 = RM39,000
Ah Wong   2000 kg x RM30 = RM60,000
Ah Wong     300 kg x RM40 = RM12,000
Total                                         RM 111,000

So now the company has to pay RM3,000 extra for the same 3,600 tons.

All these thoughts ran through my head when I read about this win-win scheme.
I am not too convinced that this is a win-win scheme.
I dont think it is going to work.

There are other things I know about how durians are sold and also exported.
Even without being in the durian business I can figure out these things.

Taken from OutSyed The Box