Tuesday, September 28, 2010

Hands-on perspective

Imagine an oil palm estate sold, awaiting completion of sale. During the expected wait of a few months, seller would even apply fertilizers to the palm trees with a view of harvesting every 2 weeks. The attractive price of fresh fruit bunch meant close supervision during harvest because once the fruits have been cut, even motorcyclists are tempted to steal one bunch at a time which is valued at Rm20-30 each. It is therefore important that owner has someone to ensure the fruits are all transported to the harvester's store to be weighed and a receipt given.

Close to completion date, the purchaser of the estate questioned the seller's representative, 'Why after selling the land, you are not willing to give up on the fruits even for the last few days?'

Now, the question should be directed back to him as, 'Why, if it is not of value, are you particular about those fruits?' Further to that could be another good question, 'Why do you think we continue applying fertilizers after signing the S&P Agreement if not for the harvest?'

It is important to note that if the last harvest was done on the day which coincides with the completion date, then the new owner would have to wait for another fortnight before the fruits can be harvested.

It all has to do with the value involved and whether it is worth the trouble. An absentee owner would not have bothered with applying more fertilizers after signing off, and forget about getting back anything while waiting for completion.

The moral of this story is that by extension, we can imagine the responsibilities of those in charge of giant plantations like Sime Darby and Felda. There are so many avenues for leakages involving purchase and delivery of fertilizers and weed-killers, harvesting, road maintenance and so on. Then there are purchases or sales of land which even commissions (overtly or covertly) can be substantial. If the officers are corrupt, then deals can be arranged to be favourable to the outside party at the expense of the company!

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