KUALA LUMPUR: The government has no special fund to raise rubber prices but is concerned about the impact of falling prices on the incomes of smallholders, said Plantation Industries and Commodities Minister Datuk Seri Mah Siew Keong.
In reply to a question from Datuk Seri Abdul Hadi Awang (PAS-Marang) at the Dewan Rakyat today, Mah said the government has already implemented the Rubber Production Incentive (IPG) scheme since 2015 to reduce the burden on smallholders affected by falling rubber prices and ensure sufficient supply of raw materials to the downstream rubber industry.
“Beginning in 2016, the IPG will be activated when the price of SMR20 Free on Board (FOB) is at RM5.50 a kilogramme or the price of cup lumps hits RM2.20 a kilogramme.
“The incentive provided is the difference between market prices and the Price level Activation (PHP).
“This measure will enable smallholders with cup lump productivity of 3,000 kilogrammes/hectare/year and two hectares of land to enjoy a monthly income of RM1,100,” he explained.
Mah said as of September this year, 349,248 smallholders nationwide have made claims under the incentive involving a payment of RM50.98 million.
“To fund the IPG, the government has allocated RM200 million,” he said.
Since November 2014, the government has also implemented a price fixing mechanism at farm-gate level through a fixed business margin i.e. the price between SMR 20 FOB and the price received by the smallholders, he said.
“This mechanism involves the participation of 64 cooperatives in rubber transactions, and the objective is reduce the role of middlemen,” he said.
To this end, the government has allocated RM6.4 million as revolving capital for cooperatives, he said, adding 18 cooperatives are now involved in rubber transactions, offering an average of 10 to 20 sen higher prices per kilogramme compared to licensed rubber buyers. --Bernama