Royal Pahang says Raub farmers can still profit despite RM30 per kg fixed price for Musang King durian | Malaysia

KUALA LUMPUR, Sept 1 ― Durian farmers in Raub, Pahang will still be able to make a profit even when selling the Musang King Grade A durians produced at the proposed fixed rate of RM30 per kg, a company linked to the Pahang state government said today.

Royal Pahang Durian Resources PKPP Sdn Bhd (RPDR-PKPP) said this when seeking to make the record straight on various claims made regarding its legalisation scheme of land said to be state-owned but allegedly illegally used by Musang King durian farmers.

As part of the legalisation scheme, the Pahang state government had leased the alleged illegally farmed land to RPDR-PKPP for 30 plus 30 years, with the RPDR-PKPP then subleasing the land to the existing durian farmers and with the farmers required to sell the durians produced at a predetermined price to Royal Pahang Durian Export Sdn Bhd.

Touching on a claim that durian farmers will have to pay RM6,000 per acre in rental annually, RPDR-PKPP clarified and reiterated that this is a “one-off lump sum payment” for the year 2020 only and only applicable to matured durian fruiting trees calculated at 30 trees per acre, noting that this payment is in exchange for letting durian farmers sell their durians freely to anyone they wanted.

“In return, the farmers are allowed to sell all their durians directly in the open market for the full year 2020 up till 31 May 2021,” the company said in a statement.

“To further accommodate the farmers’ financial relief request, RPDR-PKPP has agreed to split the payment into 3 equal instalments respectively payable in September 2020, December 2020 and March 2021.

As for the obligation to only sell durians to Royal Pahang Durian Export Sdn Bhd, RPDR-PKPP said this would only take effect on June 1, 2021 which is also when the legalisation scheme starts.

As for the proposed price of RM30 per kg that will be paid to durian farmers for Grade A Musang King durian in 2021 and 2022, the company asserted that durian farmers will still profit.

“Further, RPDR-PKPP stresses that its proposed price of RM30/kg for Musang King Grade A is fair. Assuming a farmer with 10 acre land, his minimum gross revenue based on 2000kg/acre Grade A MK is expected to hit RM600,000.

“Based on independent verification, cost of production of about RM8/kg will therefore assure the farmers an expected margin of more than 200%,” the company claimed.

In the same statement, RPDR-PKPP also addressed claims of an exorbitant levy of RM20,000 per acre being imposed, explaining however that it could be potentially paid less than this amount, depending on durian production levels.

Under the legalisation scheme, the durians sold by farmers to Royal Pahang Durian Export Sdn Bhd is subject to a levy, with Royal Pahang Durian Export Sdn Bhd tasked with paying legalisation levy ― of RM10 per kg for the first 2,000 kg of durians produced per acre ― to RPDR-PKPP to legalise the land.

“This RM20,000/acre (RM10/kg x 2,000kg) is the maximum ceiling amount which RPDR-PKPP (Legalisation Scheme Company) will receive. This amount is paid by Royal Pahang Durian Export Sdn Bhd (the Trading Company).

“There is no penalty at all if farmers do not meet the tonnage targets as per the term sheet. For example, if the farmers can only produce 1,000kg or less per-acre, RPDR-PKPP may potentially receive as low as RM10,000/acre or less,” the company said.

RPDR-PKPP today highlighted its duties and costs as the legalisation scheme company, including ensuring durian farmers do not further encroach into state land or allow further degradation of the environment, or defy compliance with Malaysian Good Agricultural Practices (MyGAP) requirements for certifications. The company previously said MyGAP certifications were required for the durians’ export to China.

“RPDR-PKPP has to incur fixed annual operating cost which includes office administration, staff costs of 150 or more persons, sites supervision over environment protection, satellite monitoring to curb further encroachment, MyGAP application and maintenance cost, lease payment, assessment and quit rent to name a few,” it said.

RPDR-PKPP also denied that no farmers supported the legalisation scheme, asserting that about 300 farmers have registered with the company, including 133 who have partially paid the Pahang government-required earnest money of RM1,000 per acre (or up to RM10,000 per applicant for those whose farm exceed 10 acres of land).

“The balance of the Earnest Money (based on final licensed surveyor’s results) need only to be paid after signing of Definitive Agreement with RPDR-PKPP,” it said.

The company also said it remains open to discussion with durian farmers who have yet to sign up for the legalisation scheme.

RPDR-PKPP is a joint venture between the Pahang royalty-linked Royal Pahang Durian Group (RPD) and the Pahang state government’s Perbadanan Kemajuan Pertanian Negeri Pahang (PKPP).

Durian farmers under the Save Musang King Alliance (Samka) group have objected to the contract terms offered by RPDR-PKPP, describing it as exploitative and allegedly akin to driving the farmers into “modern slavery”.

However, the RDP Group rejected Samka’s allegations on August 21, telling Malay Mail that it is instead protecting the local durian industry from foreign players. It added that the legalisation scheme would ultimately lead to a win-win situation for the durian farmers, the state and the  industry.

On August 21, 111 durian farmers in Raub filed for a judicial review against six respondents including the Pahang government, PKPP and RPDR-PKPP, seeking to challenge the Pahang government’s decision to lease 5,357 acres of land to RPDR-PKPP as well as the order to the farmers to vacate the land.

The High Court in Kuantan had on August 28 ordered the Pahang government to suspend enforcement and eviction measures against the durian farmers until the case is decided, with the High Court scheduled to hear the farmer’s application for judicial review on October 28.

For more about the land dispute, read here.