LETTERS: That our natural rubber industry is in a mess is no understatement, evident during a recent engagement among industry stakeholders.
The entire value chain faces challenges. Even the rubber glove business is in desperate need of policy support.
This was also the business that enjoyed a massive jump in fortunes during the pandemic.
That same sector is now bleeding profusely from competition, especially from China.
Due to the shift in raw material usage from natural latex to synthetic nitrile rubber, China can ramp up production to a level that overwhelms Malaysia's earlier dominance.
Other rubber product businesses are not spared the turmoil of competition. They seek support through government procurement, which has been promised but compromised.
The biggest complaint is coming from smallholder farmers: the National Association of Smallholders (Nash).
Depressingly low prices, high costs, labour shortage and poor returns. It's no surprise that large tracts of cultivated rubber, 400,000 hectares to be exact, are left untapped.
Under the 12th Malaysia Plan and the many blueprints that follow, the plan is for the nation to keep at least one million hectares under rubber, despite the crop losing its lustre to oil palm.
The idea is to provide enough raw material for midstream and downstream businesses. But with almost half of the rubber unharvested, that is no longer tenable.
In fact, the glove business imports most of its latex concentrate. Nowadays, we produce only a trickle of the amount needed.
Smallholders have moved away from collecting latex. Collecting cup lumps has been the norm for years now.
Even the amount produced is short of the tonnages needed to feed the midstream rubber processing business. The way out for such business is to import raw cup lumps from as far away as Africa.
Our import demand has inadvertently fuelled the expansion of the rubber business in countries like Ivory Coast.
Statistics show that production from the Ivory Coast has jumped up the output ladder. Some say it is now at No. 3 behind Thailand and Vietnam.
Malaysia has fallen to eighth spot, a far cry when we were leading in the 1980s.
The call by smallholders to stop importing raw rubber does not make sense anymore. It would kill the rubber processing business in the country.
My question is whether the 400,000 smallholders, as claimed by Nash, are truly rubber farmers.
Going by the fact that they mostly depend on external labour to do the farming, they are better described as rubber landlords or plantation owners rather than farmers.
This presents a different picture from the situation in Thailand, for example, where smallholders still undertake their own farming chores.
A recent visit to Thailand showed how the rubber industry there manages the downturn in the business.
There, rubber smallholders have formed and operated cooperatives. They do not just grow rubber, but also invest in processing and even downstream products.
Our cooperatives do not function as well as those in Thailand.
What became clear from the engagement session is that our rubber industry is facing a decline in fortunes.
Policy measures are not working. The government must rethink policy strategies if we are to arrest the decline.
PROFESSOR DATUK DR AHMAD IBRAHIM
Tan Sri Omar Centre for STI Policy
UCSI University
The views expressed in this article are the author's own and do not necessarily reflect those of the New Straits Times