SUSTAINABILITY OF RUBBER INDUSTRY IN
MALAYSIA:
ECONOMIC AND SOCIAL PERSPECTIVE
Muhamad Thalhah Ab Karim
Paper Presented at IRRDB-CATAS International Rubber Conference
18-19 October 2010, Hainan PRC
CONTENT
1.Concept of Sustainable Development
2.Status of Malaysian Rubber Industry
3.Way Towards Industry’s Sustainability
4.Conclusion
CONCEPT OF SUSTAINABLE DEVELOPMENT IN
MALAYSIA
Environment
SocialEconomic
Meets present needs without compromising future
generations:
-zero burning
-use of organic fertilizer
-cover crop
-composting
-soil and water conservation
Rubber production and
processing practices are
required to carry out in a
socially acceptable way.
Increase income of
rubber growers and
remunerative return
on investment
STATUS OF THE MALAYSIAN

1,185.90
1,247.00
2009
61.10
960.44
1,021.54
RUBBER PRODUCTION BY SECTOR
(‘000 TONS)
Source: Department of Statistics Malaysia
128.13
99.53
68.39
56.23
58.2
799.47
1,215.24
800.79
941.8
927.60
1,283.63
857.02
1,000.0
-
200.00
400.00
600.00
800.00
1,000.00
1,200.00
1,400.00

1,289
1,358
1,361
1,344
1,372
1,381
1,525
1,520
1,600
1,620
1,630
1,184
1,167
1,211
1,270
1,296
1,320
1,358
1,414
1,420
1,440
1,500
1,226
1,211
1,237
1,280
1,300
1,320
1,370
1,420

*Based on survey conducted by MRB
e-estimates
MALAYSIA LAND PRODUCTIVITY
(KG/HA/YEAR)
MAJOR ISSUES AND CHALLENGES
- Declining rubber planted area
- Inability to Attract New Participants to the
Industry
1,431
1,022
857.02
0
200
400
600
800
1000
1200
1400
0
200
400
600
800
1,000
1,200
1,400
1,600
2000
2001

(HECTARE/YEAR)
Replanting is a strategic program to improve the condition of smallholdings sector
5,222
7,233
19,029
19,043
19,408
20,586
20,212
23,152
20,688
21,203
25,000
40,000
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
2000
2001
2002
2003
2004
2005

1200
0
20,000
40,000
60,000
80,000
100,000
120,000
January
February
March
April
May
June
July
August
September
October
Production 2009
Production 2010
Avg Price 2009
Avg Price 2010
tons
etimate
sen/kg
With the increase in average price to a higher level this year, production has increased
by 15% y-o-y
AVERAGE MONTHLY INCOME OF
SMALLHOLDERS
The price of NR once a disincentive to tapping turnout has now become the major

2009
2010*
Income ( RM )
Yearly Average Prices of SMR 20 (sen/kg)
* SMR 20 yearly average as at 13 October
Before (1980s)……
……Now
The recent steady cash inflow from rubber cultivation has changed the lifestyle of rubber
smallholders.
SOCIO-ECONOMY TRANSFORMATION OF
RUBBER SMALLHOLDERS
MEETING BALANCED DEMAND-SUPPLY OF NR
On the international front, to sustain price at acceptable levels, the Tripartite cooperation
among three major NR producing countries have “managed” their expansion programs
to ensure future supply of rubber does not exceed anticipated demand.
285.98
378.97
461.93
523.07
710.92
734.06
831.37
637.36
987.04
2002
2003
2004
2005
2006
2007

2
)
RM23,700 or
US$6,700
MIDDLE-INCOME NATION
1
At 2020 prices, consistent with Economic Planning Unit (EPU)
assumptions for inflation= 2.8% and population growth=1%
2
2009 population 27.9 million, 2020 projected population 31.6 million (EPU projection)
Source: World Bank, Economic Planning Unit, Department of Statistics
ECONOMIC TRANSFORMATION PROGRAMME
• To transform Malaysia to become a high income and high
productivity economy
• Two main targets:
i.To increase national income per capita to RM 48,000 by
2020 (from RM 23,700)
ii.To achieve real GDP of 6.0% per annum
Sustaining Malaysian Rubber
Industry Contribution To A High
Income Economy
MALAYSIAN RUBBER INDUSTRY
STRATEGIES, 2010-2020
• NR production to increase to 1.8 million tons with productivity of 1.8 tons per
hectare by 2020
• Annual income of smallholder to increase by 25% from RM28,000 to RM35,000.
INITIATIVES
• Effective TOT
• R&D
• High yielding

transparency in
farmgate price
determination