UNLIKE palm oil, the sustainability of which many consuming nations have doubts, the natural rubber (NR) industry in Malaysia is poised for a second frontier of sustainability.
It's a fact that Malaysia's 130-year-old NR industry has been, to a certain extent, sustainably developed. This is well reflected by the industry's huge contribution to the socio-development of smallholders, significant trade earnings for the country as well as no serious detrimental effects on the environment having been detected so far.
According to rubber experts, the second frontier of sustainability of NR will need to focus on optimising the resources, getting inputs on the environmental impact, more R&D development and other institutional changes in the entire NR upstream, midstream and downstream sectors.
Furthermore, over 400,000 smallholders in Malaysia, accounting for some 93% of the country's total NR production, will need to be roped in to ensure the continued sustainable development of the sector.
What is more challenging is that the second frontier of sustainability of the NR sector has to be carried out amid the declining total planted area, lower rubber yields, higher world demand for “green” rubber products as well as the Government's vision to create high-income society among rubber smallholders.
Having said that, the strong rubber prices over the past three to four years NR prices have traditionally been low have provided the much-needed impetus to set the mode for major transformation to take place within the sector.
In the smallholding sector, the transformation came via land and management consolidation into cooperative or cooperation through Felda, Risda and Felcra. The central management and large-scale holdings will benefit from the economies of scale.
Risda, for example, is targeting for smallholders with an average farm size of 2.5ha and productivity level of 2,000kg per hectare a year to have a monthly income of RM4,700 by 2020, from RM2,443 in 2010. In the early 1990s to 2004, smallholders' income tended to fluctuate in line with the downtrend in rubber prices, ranging from RM200 to RM559 a month.
At the same time, strategies to increase production are now well in place. They include increasing the replanting area by 40,000ha a year, expanding new planting by 20,000ha per year, introducing high-yielding clones, promoting mechanisation and automation as well as adopting the latest technology in latex harvesting.
All these efforts will help Malaysia's NR production stay above one million tonnes a year and meet the increasing raw materials requirements of the lucrative downstream industries such as rubber gloves, rubber thread and tyres and tubes.
By 2020, it is envisaged that the concept of sustainable development of the local NR industry, i.e. improvement in productivity, efficiency and quality while trying to attain sustainable remunerative rubber prices and balanced growth in the entire industry, will result in a win-win situation for all parties involved.