KUCHING: The federal government has agreed to raise the Rubber Production Incentive (IPG) to RM5.10 from RM4.60 per kg for the SMR 20 FOB rubber with effect from this month.
At the same time, the incentive for cuplumps (50 per cent dry rubber content or DCR) was also raised to RM2 per kg.
This was disclosed by Minister of Plantation Industries and Commodities Datuk Amar Douglas Uggah Embas, who said the revisions were endorsed by the Federal Cabinet on Aug 26.
The IPG, introduced in January this year, is a mechanism designed to assist smallholders during the decline in rubber price. Initially, the programme would be activated when the SMR20 FOB is at or below RM4.60 per kg or the average price of cuplumps reached RM1.75 per kg or below.
Once activated, the smallholders will be entitled to government assistance of 30 sen per kg for cuplumps, maximum 90 sen per kg for latex based on DRC and maximum 60 sen per kg for unsmoked sheet rubber based on DRC.
“With this incentive, we hope that smallholders will continue to tap rubber. Initially, we noticed that many plantation owners quit tapping and moved to other crops when price of rubber declined. This will affect the raw material required for industries.
“The country is producing about 700,000 tonnes annually while importing close to 900,000 tonnes of rubber for our downstream industry (worth RM5.83 billion) and we
want to reduce this,” he told a press conference after visiting the 122ha Stabut RBP (Rubber Block Planting) National Key
Economic Area (NKEA) project at Siburan, some 60 km from here yesterday.
Accompanying him were the Ministry of Plantation Industries and Commodities secretary general Datuk Himmat Singh, state Agriculture Department director Datu Lai Kui Fong and Ministry of Modernisation of Agriculture permanent secretary Datu Dr Ngenang Jangu.
For incentive claiming purposes, he reminded local smallholders to register with the state Agriculture Department to receive their Rubber Transaction Authority Permit (PAT-G) cards, and those in the Peninsula and Sabah would have to register with the Malaysian Rubber Board or Sabah Rubber Industry Board respectively.
In order to claim, the smallholders must provide an invoice for the rubber which had been sold and present their PAT-G cards. The amount of incentive is based on the amount of sales.
About 175,000 out of 300,000 smallholders nationwide have registered and in Sarawak, only 4,000 out 74,000 farmers have registered for the PAT-G card.
A total of 119 people are participating in the Stabut RBP project which cost about RM1.6 million for a five-and-a-half-year contract from Feb 2013 till August 2018.
Uggah said the rubber industry contributed RM30.61 billion to the country’s gross national income last year, while the export was worth RM23.6 billion.