KUALA LUMPUR: The government has launched a strategic initiative to revitalise the rubber industry in the face of supply chain disruptions and prolonged low rubber prices at the farm level.
Malaysian Rubber Board development and construction division director Azuan Adinan said the focus was on encouraging smallholders to shift from cup lump to latex production, a move intended to enhance their income and address the shortage of latex for medical glove production.
Under the scheme, initiatives are introduced within a 50km radius of latex processing factories in areas such as Tapah, Sungai Petani and Sabah.
"The approach begins on a small scale to attract smallholders with the improved prices, and the expectation that this will create a ripple effect, prompting neighbouring areas to also transition to latex production," he said.
The recently launched initiative was a one-year project aimed at studying the impact of the transition, said Azuan.
Smallholders are given additional incentives, such as higher prices, due to the elimination of the middlemen.
The goal was to shift from the traditional cup lump tapping to a more intricate latex production process which involved tapping and waiting for the latex to cup before collection , he said.
Azuan said the strategy involved direct purchase agreements between smallholders and major companies like Lee Rubber Products, Lembaga Industri Getah Sabah and Malaysian Rubber Development Corp Bhd.
"By cutting out the middlemen, smallholders can potentially get higher prices for their latex," he said.
The government has added financial incentives, such as an extra RM2 per kg, to motivate the transition.
Malaysia, being a leading producer of medical gloves, faces the challenge of insufficient latex supply.
The government's initiative seeks to bridge this gap by encouraging local rubber production.
In a bid to further incentivise smallholders, the government is offering financial rewards based on productivity, such as a one-time payment of RM1,500 for achieving 1,500kg per hectare.
This concerted effort is concentrated within a 50km radius to maximise the participation of as many rubber smallholders as possible.
The government anticipates that the initiative will result in a sustained increase in rubber prices for smallholders beyond the project's conclusion.
This holistic approach aims to revive the rubber industry, ensuring its resilience and sustainability in the long run.
Meanwhile, it was time the paradigm shifted from a controlled, centralised model to one that empowered rubber tappers and growers, fostering creativity and self-sufficiency, said Prof Datin Paduka Dr Fatimah Mohamed Arshad, a senior fellow at Institute For Democracy and Economic Affairs.
She said encouraging rubber growers to take responsibility for their farms was important.
"While institutions like Rubber Industry Smallholders Development Authority (Risda) assist with replanting and marketing in the short term, the focus should be on empowering smallholders to stand on their own feet in the long term.
"Rather than government bailouts, they will benefit more from market challenges and exploring additional on-farm activities to offset low prices."
She said the shift to empowering creativity involved old policies that controlled decision-making of rubber smallholders.
"The previous approach, where the government provided everything from information to services and even appointed agents for various tasks, has hindered their creativity."This centralised control for five decades has created barriers to entry, stifling motivation and discouraging local input."The premise in the 1970s was apt then, but not now. It is killing smallholders' motivation, it creates high barriers to entry and worse still, it doesn't encourage the production locally."
Fatimah said decades ago, smallholders faced challenges such as poverty, limited access to information and insufficient infrastructure.They also lacked capital and relied on middlemen."Over the years, everything was done for them. Everything was decided for them. That is not good. They lost their creativity. They lost the impetus to improve or come up with innovation to be more productive," said Fatimah.
Fast forward to 2023, nearly half a century later, the landscape has evolved and information is no longer restricted.
"This newfound accessibility has transformed farmers into more informed and resourceful individuals. "We can no longer assume they lack information or knowledge. Their awareness has grown. The key now is to further empower them through knowledge enhancement, fostering creativity and innovation for improved livelihoods," said Fatimah at the National Direction Seminar for Rubber Industry Smallholders.
In the case of rubber cultivation, smallholders possess untapped potential for contributing services like labour-sharing and farm clearing.
"Providing them with opportunities to be dynamic and creative is crucial; otherwise, they remain stuck in a cycle of repetitive rubber production without room for growth," she added.
The seminar was facilitated by Risda and attended by 400 participants.
It is an initiative by the Rural and Regional Development Ministry to ensure the wellbeing and prosperity of more than 500,000 smallholders in the country.