KUALA LUMPUR: The Ministry of Plantation Industries and Commodities has revised the terms of its Rubber Production Incentive (IPG) from Sept 1, to ensure 300,388 smallholders continue to benefit from the scheme.
In a statement, the ministry said the 2015 Budget had allocated RM100 million for the IPG, which is triggered when the SMR 20 FOB price is RM4.60 per kg or less. Eligible smallholders would receive 30 sen per kg cuplumps, up to 90 sen per kg latex and up to 60 sen per kg Unsmoked Sheet (USS) rubber depending on dried rubber content.
"Based on feedback from members of parliament, smallholders, and implementation agencies, the ministry has taken the initiative to suggest that the activation price for IPG be increased to RM5.10 per kg at plantation level and RM2 per kg and below according to territories.
"This proposal was approved by the government on Aug 26 2015. The IPG takes effect beginning Sept 1 2015," it added.
MPIC said approval was also given to revise the IPG rate from the fixed 30 sen per kg to a scaled rate from 10 sen to Rm1.45 per kg for cuplumps.
The IPG scheme will benefit 300,388 smallholders nationwide, most of them in the rural areas.
The ministry said the incentive scheme will ensure that smallholders' income does not fall below the poverty line when rubber prices are low. It will also encourage them to continue tapping rubber, which will help maintain annual production at 700,000 tonnes a year to meet downstream industry requirements.
This will reduce the need to import natural rubber, which amounted to 905,039 tonnes worth RM5.83 billion in 2014. One of the major users in the downstream sector is Malaysia's rubber glove industry.
The rubber industry contributed RM30.61 billion to Malaysia's Gross National Income last year, and accounted for RM23.6 billion worth of exports.