KUALA LUMPUR: The government has no plan to raise the activation pricing level (APL) of the Rubber Production Incentive (IPG) to RM3 per kilogramme (kg) compared to the current RM2.70.

According to the Ministry of Plantation and Commodities (KPK), if the APL of the IPG is increased, the government’s estimated financial needs in 2023 are projected to be as much as RM457 million based on the projected total production of 400,000 tonnes of rubber with an annual average price of SMR 20 at RM6.10/kg.

“The government is aware of the burden on smallholders when the price of rubber in the market is low and therefore, the government has agreed to increase the APL of the IPG by 20 sen, from RM2.50 to RM 2.70/kg,“ it said in a written reply published on the Parliament website today.

Hence the total allocation provided is as much as RM350 million as announced in Budget 2023, it said in reply to a question from Riduan Rubin (independent-Tenom) who wants to know if the ministry plans to consider the application of rubber tappers to increase the floor price of scrap rubber from RM2.70 as announced in Budget 2023 to a new rate of at least RM3/kg.

The ministry said the government is always concerned with the welfare of small rubber planters whose income will be affected when the price of rubber declines.

It said the KPK is committed to continue boosting the commodity sector in facing the economic challenges of 2023 and is prepared through various strategies, programmes and directions in the National Agricommodity Policy 2021-2030 (DAKN2030) to help the development and growth of the country’s agricommodity sector.

“For the rubber sector, the aspiration through DAKN2030 is to create synergy in the transformation of the value chain of the rubber industry through several strategies to reorganise the upstream level, modernise the middle level (processing) and support the growth of the downstream level,” it said.

It added that all the strategies that will be implemented take into account aspects of sustainability, productivity, value generation, market development and inclusion. - Bernama