November 14, 2022

 

Malaysia's stalled beef production project still viable, court heard

 

 

The Malaysian government's ambitious project to produce beef for the domestic and export markets is still viable, despite it being stalled for 10 years now, the High Court heard on November 10.

 

National Feedlot Corporation (NFC) chairman Salleh Ismail said food and agriculture are very important components for any country. "Food security is also national security," he said when re-examined by his counsel, K Kirubakaran.

 

However, he added that the project could not take off as the government did not honour its promise to build a high-quality export abattoir that could slaughter 700 cattle a day at the National Feedlot Centre in Gemas.

 

"The project is still (viable); only that the abattoir was not built," he said.

 

The government had allocated RM73.4 million (US$16 million) to the agriculture and agro-based industries ministry under the Ninth Malaysia Plan for various works, including for clearing of land, planting of grass and construction of a dam to supply water for the cattle.

 

As integrator of the project, NFC was given a government loan to bring cattle in from Darwin, Australia, to be distributed to 130 farm operators for fattening. The cattle would then be purchased from the farmers before being slaughtered.

 

Salleh said NFC could not service the loan due to the non-existence of the abattoir.

 

However, NFC had already built a mini-abattoir pending the construction of a high-quality export abattoir by the government.

 

However, NFC's mini-slaughterhouse could only slaughter 30 cattle a day.

 

Trial judge Anand Ponnudurai asked Salleh why NFC did not build the abattoir itself since it was an important aspect of the project.

 

"We did not have money. Anyway, government (officials) had promised to build it during our discussions," he added.

 

Salleh said the government terminated the project in 2009 but NFC was never officially notified.

 

He said NFC ceased its operations only in 2012 when Putrajaya froze the company's accounts and seized its assets after the auditor-general issued his report in 2012.

 

In 2019, the government filed a suit against NFC. It previously approved a loan to NFC to turn the local cattle industry into a large-scale business with the aim of helping Malaysia become self-sufficient in beef production.

 

Under the loan agreement, NFC was supposed to repay RM17 million (US$3.7 million) annually from 2012 to 2028.

 

The government has taken the position that the loan was a standalone agreement and that NFC had misappropriated the money.

 

The defendants said the loan disbursed was tied to the project's implementation and certain lease agreements which the company had entered into.

 

NFC has also filed a counterclaim against Putrajaya for losses suffered after the project was suspended.

 

- FMT

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