In the last few short years, the Plantations Ministry has been led by three ministers. Though coming from different backgrounds, the modus operandi was not much different between the three.
The reshuffling of people in senior positions in the Malaysian Rubber Board (MRB) and the Malaysian Rubber Council (MRC) affected the rubber institutions.
It was inevitable that the directions of MRB and MRC kept shifting, creating confusion not only among employees but more so among the industries they served. The line of command and control was also unclear. There was visibly much interference in the running of the MRB, which used to be autonomous in the days when rubber was the country's economic darling and treasure.
It was unfortunate that such confusion occurred at a time when the rubber industry was up against many challenges, better described as volatile, uncertain, complex and ambiguous (VUCA). The world rubber price stayed persistently low, thus derailing the livelihoods of many smallholders.
Despite the almost one million hectares of rubber cultivation in the country, only about half were harvested. The total rubber production kept declining, placing Malaysia at No. 7 or 8 in the world output ranking. This was a far cry from our position not long ago as the world leader not only in production but also in productivity.
Nowadays, our rubber productivity is among the lowest in the world as the adoption of the latest technology continues to decline. The transfer of technology process has come under much criticism. The call for change has fallen on deaf ears.
The only sparkle during that VUCA era was the rubber gloves sector, thanks to the Covid pandemic, which ravaged the world but created splendid market opportunities for our glove makers. The dichotomy became more obvious, with thriving manufacturers of rubber products on the one hand, and the sliding fortunes of the upstream rubber producers on the other. Though there was some sparkle in the glove business, it was not all rosy. Much of the latex concentrate required was imported from Thailand and Vietnam.
As the plantation companies exited the industry, our latex concentrate production has shrunk significantly. Smallholders do not collect rubber in its latex form. Only cup lumps are collected. Even the dry rubber processing business has been largely reduced. In fact, a large portion of the raw coffee lumps is imported from as far away as Africa.
The quality of such imported materials is also inferior, creating further problems for the processed rubber. Tyre makers are not happy. Tyre manufacturers are also under increasing pressure to comply with the global push for sustainability. Such market demand is again pushed down to rubber growers, who must conform. As a result, we see groups emerging to tap into the growing business opportunity in sustainability certification.
The industry has no choice but to prepare to deal with this new consumer reality. The industry will have to follow the practice in palm oil by creating its own scheme for Sustainable Natural Rubber. I believe this is already taking shape.
But the more important thing is that we must be there at the international meetings on sustainability to fight for our case. It is unfortunate that in the last few years, the industry's participation at the international forum has been much curtailed. We need to revive this if we are to have a fair chance of sharing our concerns and influencing the direction of international agreements.
With the appointment of a new minister, Datuk Seri Fadillah Yusof, there is a chance for reform in the ailing rubber industry. His experience in the Science, Technology and Innovation Ministry and the construction industry would come in handy in resolving the many issues troubling the rubber sector.
Some plausible incentives have been proposed to entice plantation companies to return.
It is critical to deploy digitalisation technologies both upstream and downstream.
MRB and MRC should operate as a combined entity to advance the technology agenda, including the poorly managed transfer of technology. Pragmatism should return to the sector. I believe the new minister has what it takes.
The writer is a professor at the Tan Sri Omar Centre for STI Policy, UCSI University