Malaysia: Increase Subsidies to Promote Rubber Output

The general director of Malaysian Rubber Board Datuk Dr Zairossani Mohd Nor said the current price of scrap rubber was RM1.80/kg, and only 15% to 20% of smallholders had benefited from this production category since its introduction in 2015. The RPI program would increase the income of smallholders.

“We hope that as many small farmers as possible can apply for RPI. The more rubber they (the smallholder) produce, the more income they generate.” Datuk Dr Zairossani Mohd Nor said.

Zairossani said that Malaysia has more than 1 million hectares of rubber plantations, producing more than 1 million mt of NR annually, 90% of which is produced by smallholders.

Currently, RPI is activated when the monthly average price of SMR 20 drops belwo RM 5.50/kg or RM 2.20 ringgit/kg of cup lump. Since 2015, the smallholders have been provided a subsidy of 102 million RM. From 2019, RPI program will help smallholders face low NR prices. However, Zairossan said that rubber production is still insufficient to meet domestic demand, which has led to Malaysia becoming a net NR importer.

“Malaysia is the third largest exporter of crude rubber, but we still lack enough rubber for the domestic downstream industries.”

“We expect that the value of rubber products exported in 2018 to increase to more than 18 billion RM. Therefore, if we want to reduce the dependence on rubber imports, we must increase rubber production.”

Zairossani said that the monsoon season, which is expected to end in January, will reduce local rubber tapping activities and rubber production.