Smallholders in the state of Sabah in Malaysia are reaping the benefits of the increase in raw rubber prices, with some even seeing an increase of as much as RM7,000 in their monthly income.
The shortage in global supply brought on by the recent floods that have hit Thailand pushed the prices of the raw material up.
Malaysian State Minister of Agriculture and Food Industry Datuk Seri Yahya Hussinsaid the international price of Standard Malaysian Rubber 20 (SMR 20) had doubled from its low of RM4.70 per kg in early last year to current prices of RM9.68.
Meanwhile, the smallholder rubber prices in Sabah had increased from a low of RM1.50 per kg for cuplumps at 50% dry rubber content to a high of RM3.75 per kg.The increase, Yahya said, has resulted in rubber smallholders earning between RM2,500 per month to RM7,000 per month.
He said the government’s concern for the welfare of the rubber smallholders was the reason a social safety net policy called the Rubber Production Incentive (IPG) was in place.
The IPG is paid when the farm gate price falls below RM2.20 per kg for cuplumps (50% dry rubber content) or when the international SMR20 price is below RM5.50 per kg.If the actual price of cuplumps is RM1.50 per kg, the government will top up the difference of 0.70 cents per kg.
Yahya said the federal government had paid more than RM22million to smallholders in Sabah from September 2015 to October 2016 through the Sabah Rubber Industry Board under this programme.
He also thanked Prime Minister Datuk Seri Seri Mohd Najib Tun Abdul Razak for helping the state’s more than 13,000 smallholders during the difficult times they had faced over the past few years.
Yahya said the Prime Minister had also provided funds to rubber smallholders for replanting and new planting of rubber through the Sabah Rubber Industry Board totalling more than RM321million between 2012 and last year involving 26,518 hectares.
A total of 8,540 smallholders were assisted under the National Key Economic Area programme.
For 2017, the federal government has allocated more than RM65million to further replant and plant 3,856 hectares, and maintain planted areas through the board. Some 1,285 additional smallholders will be assisted in 2017.