PETALING JAYA: An activist claims that rubber smallholders are not enjoying the increase in profit that manufacturers are reaping following a rise in demand for rubber products, such as gloves, during the Covid-19 pandemic.
Nur Fitri Amir Muhammad, a researcher into local smallholders’ welfare, said the government should launch a holistic intervention initiative to balance the share of the economic pie in the industry, of whom the majority were affected by the open market.
“The government must act to repair the rubber industry’s ecosystem, which is imbalanced in terms of the welfare of smallholders, tappers and farm workers,” he told FMT.
“This is because Malaysia’s rubber industry is actually dependent on foreign countries, especially Thailand and Vietnam.”
He admitted that it was logical that profits garnered by the smallholders and product manufacturers would differ, adding that the gap became particularly evident during the pandemic.
“Both (profits) should increase at the same rate at this time. During the pandemic, the price of rubber fell to RM1.80 from around RM2.50,” he said.
Fitri said Malaysia’s annual production of 673,513 tonnes was insufficient and caused the nation to import 930,333 tonnes annually, making it the third largest importer of natural rubber in the world, after China and the US.
This is despite Malaysia being the fourth largest rubber product exporter in the world with 1.017 million tonnes of exports a year.
“It is because a majority of natural rubber produced in the country is frozen, which will then be processed as rubber blocks, known as Standard Malaysian Rubber,” he said.
“It’s not balanced with the production of latex rubber, which is more expensive in the market.”
The production of latex has decreased to 40,000 tonnes annually despite demand for the commodity increasing every year, forcing Malaysia to import 300,000 tonnes of latex a year, 99.8% of which is imported from Thailand.
Meanwhile, Malaysia is the biggest producer of medical gloves, nitrile butadiene rubber and condoms.
Recently, Putrajaya announced several initiatives to stimulate rubber-based economic activity, including subsidies amounting to RM20 million for automation and green technology and RM36 million to encourage rubber companies to employ Malaysians.
“However, there’s nothing for smallholders and tappers. At least give scholarships to their children,” said Fitri.
He said as part of efforts to reduce Malaysia’s dependence on foreign countries, farmers and tappers should also be given training for more efficient management of latex.
The relevant infrastructure and tools should also be made available to encourage the production of local latex.
Fitri said Putrajaya should make it mandatory for companies receiving incentives to acquire natural rubber from local farmers and control the use of imported rubber.