Director General's Message
Smallholders Encouraged To Claim IPG
The price of natural rubber has been experiencing a downward trend starting January 2014 due to a slower economic growth in major importing countries, such as China and the European Union. The average price of Standard Malaysian Rubber (SMR) 20 in 2015 was at RM5.22 per kilogram (kg) compared to RM5.53 per kg in 2014 and RM7.74 per kg in 2013. The trend continued in 2016, with the average price from January to February 15 at RM4.60 per kg. The decline in prices has affected the income of rubber smallholders that contributed nearly 95% of the total production of natural rubber in the country.
In order to reduce the economic burden of rubber smallholders, and to make sure that their income is secure and above the poverty line, the Cabinet has agreed in October 2014 to implement the Rubber Production Incentive or Insentif Pengeluaran Getah (IPG) to assist the rubber smallholders starting January 2015 with the SMR 20 activation price at RM4.60 per/kg.
However, after taking into consideration on the feedback and review from the Ministry, improvements were then made in August 2015 with regards to the activation price. IPG will be implemented when the average FOB price of SMR 20 falls to RM5.10 or below or the farmgate price of cuplump is at RM2.00 or below according to region.
Prime Minister YAB Datuk Seri Najib Tun Razak and the government is very concerned on the downtrend in prices and the well-being of the smallholders. During the 2016 budget speech the government announced that the Activation Price of IPG has been raised to RM5.50 per/kilogramme for SMR 20 FOB or RM2.20 per/kilogramme for cuplumps from January 2016. The approved rate is between RM0.10 to RM1.45 for every kilogramme of cuplump with 50% dry rubber content (DRC) to a maximum of RM0.90 for every kilogramme of latex based on a percentage of DRC. This incentive will also involve unsmoked rubber sheets (USS).
The implementation of IPG will enable smallholders to achieve a minimum income of RM512 per hectare based on the cuplump average productivity of 1,500 kg/ha per year.
The IPG implementation mechanism will ensure:
- The income of smallholders will not fall below the poverty line when rubber prices are low;
- Smallholders will continue tapping rubber. From our observation, some of the smallholders have abandoned their holdings and move to other economic activities that will provide them with better income when rubber prices are low.
Therefore, I encourage smallholders to make their claims at the nearest MRB office with the following documents:
- Original sales receipts;
- IPG claim form (available at all MRB offices);
- PAT-G card
Datuk Dr Mohd Akbar Md Said
Malaysian Rubber Board