Barisan Nasional and FELDA: A Depleted “Fixed Deposit”

Author’s Note: The author would like to extend a word of thanks to Rebecca Neo for her extensive help in the cartography used in this commentary.

The fortune of Barisan Nasional (BN) is intricately tied to palm oil cultivators, with this segment wielding a disproportionate influence on the Malaysian political scene. Despite close to three-quarters of Malaysians residing in urban areas, malapportionment and gerrymandering institutionalised under BN’s six decades of rule ensure that rural regions have an excessive weightage on the electoral “daching” (scale) .

The Federal Land Development Authority (FELDA) was instrumental in the 1970s as a government-funded tool to reduce rural poverty among Malay peasants. This was done through land grants in newly deforested land to cultivate palm oil in addition to loans and technical assistance. In the few decades up to the 1990s, the United Malays National Organisation (UMNO) credibly fulfilled its raison d’être as the rural Malay (and non-Malay) population experienced consistent and strong income growth. The World Bank praised FELDA as “one of the most successful land settlement organisations in the world”. With patronage controlled by local UMNO grassroots coupled with widespread gratitude among residents, FELDA was a “fixed deposit” for UMNO (and by extension, BN). BN won 46 of the 56 parliament seats with FELDA settlement in the 2013 General Election, despite losing the popular vote share to the opposition at the national level. 

Negeri Sembilan is an illustrative case as FELDA settlements are found in 11 out of the 36 state seats, referred to as FELDA seats. The BN-PH unity pact was, in theory, supposed to combine the firepower of both coalitions and ensure electoral victory. In contrast to the three-cornered fights in last November’s parliamentary election, the BN-PH alliance hoped that voters who had supported either BN or PH in past elections would throw their weight behind the chosen BN or PH candidate (depending on seats) in a straight contest against Perikatan Nasional, the opposition coalition.

With very limited job opportunities in their FELDA communities, youths are compelled to seek job opportunities in large cities away from home. The large debt incurred from the FGV public listing further fuelled the negative perception towards BN.

Table 1: State seats contested by PH and BN in Negeri Sembilan

Coalition	Total seats (36)	FELDA (11)	Malay majority including FELDA (22)
PH	19	2	10
BN	17	9	12

In the recently concluded Negeri Sembilan state election, BN contested 17 state seats while PH contested in the remaining 19. All but two of the 11 FELDA seats were contested by BN. However, the tide turned against BN despite forming the alliance with PH, its former archnemesis. The BN-PH vote transfer theory — that supporters of PH and BN would transfer their votes to their former rivals in the coalition — proved illusionary in Malay majority seats (Malays more than 50 per cent of the electorate), with election results indicating that vote transferability was low.

In other words, a sizeable portion of Malay voters who supported BN in 2022 switched to PN instead of PH in the recent state election. In the eleven FELDA seats, the votes received for BN or PH were between 25 to 40 per cent lower than the combined votes for PH and BN in 2022. An almost identical pattern could be observed in the remaining twelve Malay-majority seats in Negeri Sembilan that are not FELDA seats. This indicates that the FELDA “premium” has all but evaporated.  

Map 1:PH-BN loses Traction in FELDA Seats

Decline in total vote … to 2023

Out of the five seats that Perikatan Nasional (PN) wrestled from BN and PH in Negeri Sembilan, three are FELDA seats. Of equal concern is that four FELDA seats BN won had only a razor-thin majority of less than 700 votes. Should the current trend continue to the next election, BN is at risk of losing large swathes of FELDA seats to PN.

Map 2: PN Makes Gains at PH-BN’s Expense

Winning Margins for PH-BN

Even back in the 2018 General Election there were palpable signs of discontent as FELDA smallholders were saddled with large debts since the public listing of FELDA in 2012. The transformation of FELDA into FELDA Global Ventures (FGV) was a brainchild of then Prime Minister and UMNO President Najib Razak, despite widespread opposition from senior FELDA officials. Instead of the promised stable financial returns, FGV has been plagued by corruption scandals and chronic mismanagement with losses running into billions of dollars.

The swing towards PN in FELDA seats is spearheaded by Malay youths. Unlike their parents who benefited from FELDA land grants in the 1970 to 1980s, the second generation of FELDA settlers are economically marginalised with FELDA having long discontinued the practise of land grants. Since smallholders do not have a large piece of land, much of the palm oil harvesting is done by family members with excess labour carried out by foreign workers who are cheaper to hire.

With very limited job opportunities in their FELDA communities, youths are compelled to seek job opportunities in large cities away from home. The large debt incurred from the FGV public listing further fuelled the negative perception towards BN. This was uncovered in the author’s conversations with locals during a field trip to FELDA in Negeri Sembilan. A middle-aged Malay man in a palm oil settlement expressed his frustration that, based on his first-hand experience as a contractor in Kuala Lumpur, it is “impossible even for Bumiputra contractors” to receive government contracts unless one engages in “corrupt practices” of kickbacks

Such sentiment against BN has seen the mood shift towards PN instead. PN chairman Muhyiddin Yassin campaigned on the billions of dollars worth of debt relief for FELDA settlers when he served as Prime Minister, a move which was widely popular to the extent that current Prime Minister Anwar Ibrahim has issued counter-claims. Historically, FELDA residents exerted significant pressure on their children to support BN, but there was anecdotal evidence of changing tides from the recent field trip during the campaign period. Older generation FELDA residents mentioned that their children have successfully convinced them to support PN instead of BN, with noticeable dissatisfaction towards BN even in coffee shop discussions.  

The present BN-PH unity government should provide a clear economic roadmap to revitalise the economic fortunes of FELDA residents, especially the youths. One avenue is to ensure FELDA smallholdings meet stipulated European Union Deforestation Regulations or other “sustainable” palm oil certification standards accepted by Western governments which set out labour and/or environmental standards. These products typically command a higher price on the global market compared to conventional palm oil, increasing smallholders’ income.

At present foreign migrant labourers in Malaysian palm oil plantations are at times subjected to forced labour. Eliminating forced labour and complying with international labour norms would increase the overall working conditions in the industry and provide greater incentives for younger Malaysians to join. In the end, improving the economic fortunes of FELDA residents might go some way to restore PH-BN’s electoral performance in the medium term.

2023/214