Clustering a key strategy for rubber

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After highlighting her SWOT analysis of the Malaysian rubber industry yesterday, in this Part 2 article, Datuk Dr Salmiah Ahmad, Director General of the Malaysian Rubber Board (MRB) shares some of the initiatives that have been kicked off by her team and some upcoming ones, designed to address the issues she raised yesterday.

Dr Salmiah Ahmad

The Standard Malaysian Rubber (SMR) is the most common product produced from rubber cup-lumps. However the reality is that our neighbouring countries like Vietnam and Indonesia can produced similar qualities at a cheaper cost. On the other hand Malaysia is a leader in the production and export of latex-based products. Yet less latex are produced by the smallholders due to its poor pricing structure.

To address this issue Salmiah shares what some of the tactics are:

  1. 1.      Transforming the landscape of rubber smallholding through Clustering

A significant transformation must take place in the smallholding sector by the way of land and management consolidation into a cooperative or corporation.

Currently, the agencies directly responsible for the physical aspects of smallholder development such as RISDA, FELDA, FELCRA and to some extent state authorities have adopted development systems best suited to their schemes but their fundamental objectives remain the same which is to maximize returns from available land, to adopt efficient and cost effective management and to encourage the development of large-scale holdings to benefit from economies of large scale production. This clustering to achieve economies of scale will be further enhanced.

  1. 2.      Automation and Mechanization

Automatic rubber tapping system (ARTS), automatic machine to sow rubber seeds (SoFil), automatic machine to plant planting materials (P-Mac) and latex collection vehicle (LCV) are some of the technologies introduced/to be introduced to reduce the labour requirement in the fields. Since automation and mechanization will surely increase capital requirement, working in clusters will reduce the capital required by a smallholder.

  1. 3.      Quality Clones

Quality planting materials of the right clones need to be delivered to the smallholders doing replanting or new planting. RITeS is a system to be introduced to tag all planting material delivered to smallholders. Through the RITeS poor quality clones can be returned and replaced with better quality planting material and of the right clones.

  1. 4.      Good Agricultural Practices (GAP)

The smallholders need to be trained to ensure GAP are adhered to ensure good growth and yield.

  1. 5.      Reducing Supply Chain and Online Trading

MRB will also encourage the smallholders to work in cluster and selling their rubber to processors through long term contracts. This will reduce the supply chain and allows the possibility for smallholders to have some benefits from the downstream activities and the processors having some benefits in vertical integration. To encourage more transparent pricing, online trading will also be introduced.

One of the best things to have happened to the sector is the renewed focus on the rubber industry brought on by the Economic Transformation Program. Here Salmiah updates Business Circle with two of the four Entry Point Projects (EPPs) which have been identified to further strengthen the Malaysian rubber industry.

EPP-1: Increasing Average National Rubber Productivity to 2,000 kg/ha/year by 2020

In order to increase the rubber productivity, this EPP aims at ensuring only high yielding and quality-planting materials are supplied to the smallholders. Numerous measures have been identified and implemented:-

Seeds Production Areas (SPA)

Rubber seeds are required to produce rootstocks which are then budded to produce planting materials of identified clones. SPAs were established by MRB to supply additional rubber seeds for the preparation of the rootstocks by nurseries, should it be necessary.

Malaysian Rubber Budwood Center (MRBC)

MRBC was established to supply sufficient quantity of high quality bud-eyes to nurseries to produce planting materials of the recommended clones. To date, there are two MRBCs under the development phase and are expected to be completed by the end of December 2012. These MRBCs are located in Bukit Kuantan, Pahang and Penampang, Sabah with an area of 30 hectares and 15 hectares respectively. In 2011, two MRBC have successfully been developed in Kota Tinggi, Johor and Similajau, Sarawak with an area of 30 hectares each.

i-KLON and RITeS

i-Klon has been introduced with the aim to add value to the current process of clone screening carried out manually as well as to accelerate the certification process for nurseries. For the same purpose, a subjective mechanism, known as Rubber Information and Traceability System (RITeS), was developed to monitor and track the sources of planting materials.

ARTS and Other Systems to Support Mechanization

Automated Rubber Tapping System (ARTS) is undergoing pre-commercial trials at the MRB’s field and Sime Darby’s plantation. Several technologies to mechanize the field operations were also launched in 2012 and these include Soil Filling Machine (SoFiL), Planting Machine (PMac) and Latex Collection Vehicle (LCV).

Good Agricultural Practices (GAP)

RISDA and LIGS were active in conducting training relating to GAP to smallholders to ensure the young rubber trees are given the right inputs. As at 31 October 2012, a total of 111,727 smallholders in the Peninsula Malaysia have been trained by RISDA while LIGS has provided training to 512 smallholders in Sabah.

EPP-2: Ensuring Sustainability of the Upstream Rubber Industry

Due to the decline in rubber area and realizing the importance of sufficient supplies from the upstream sector to the downstream sector, this EPP aims at maintaining rubber area at 1.2 million hectares by 2020 through replanting and new planting programmes.

The government through implementing agencies such as RISDA, LIGS, JPS, FELDA and FELCRA are committed to ensure on-going replanting and new planting activities among the smallholders throughout Peninsular, Sabah and Sarawak. The total planting of rubber to-date (Jan-Oct 2012) was recorded at 21,396.45 hectares, which is approximately 61.0% of the targeted hectarage of 35,000 hectares for 2012.

Another 19,000 hectares of land are still at the work in progress stage. The replanting and new planting programmes has received an overwhelming response from the smallholders which the applications received by the implementing agencies far exceeded the targets (hectarage) by 373%.

On the other hand, there are also several challenges that have resulted in the progress on planting such as inadequate of planting materials, weather conditions, administrative processes and etc. Nevertheless, every effort has been taken to crystalize the objective of this EPP.

 

Photo credit: Flickr user peterstuckings

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