The government does not propose to raise the activation pricing level (PHP) of the rubber production incentive (IPG) for the time being following the increase already made in Budget 2023.
Deputy Plantation and Commodities Minister Siti Aminah Aching said the government has always been concerned about the welfare of rubber smallholders whose income are affected when the price of rubber declines.
She said that like other commodities, natural rubber is export-oriented and its pricing is reliant on the agreement between buyers and sellers which is beyond government control.
“The government is aware of the burden on smallholders when the price of rubber is low in the market. The government has, therefore, agreed to raise the activation pricing level of the rubber production incentive by 20 sen, from RM2.50 to RM2.70 per kilogramme (kg).
“The allocation provided was as much as RM350 million as announced in Budget 2023,” she said in the Dewan Rakyat today.
Siti Aminah was answering a question from Hassan Saad (PN-Baling) who wanted to know if the government plans to increase the floor price of scrap rubber to RM3 per kg to absorb the impact of the current drop in the income of rubber tappers.
She explained that if the activation pricing level of the rubber production incentive were to be raised to RM3 per kg compared to the current RM2.70 per kg, the government would need a projected estimate of RM457 million in 2023.
This amount is based on a projected total production of 400,000 tonnes with the average price of Standard Malaysian Rubber 20 at RM6.10 per kg, she added.
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