Rubber incentive rises to RM3.30

KUALA LUMPUR: The increase in the Rubber Production Incentive (IPG) to RM3.30 per kilogramme under the 2027 Budget is expected to help cover smallholders' production costs and support their incomes.

National Association of Small Farmers of Malaysia president Adzmi Hassan said the increase would help rubber smallholders cope with volatile market prices and rising agricultural input costs.

He said the incentive was important in keeping rubber tapping viable and encouraging smallholders to maintain production.

When tabling Budget 2027 on Friday, Prime Minister Datuk Seri Anwar Ibrahim said the incentive would rise from RM3 to RM3.30 per kg.

This marks the third increase since the rate stood at RM2.50 per kg in 2022.

Meanwhile, Adzmi said the association hoped the government would provide 100 per cent assistance under the Smallholder Oil Palm Replanting Financing Incentive Scheme and simplify access to the funding.

He said removing old trees, preparing land, buying seedlings and agricultural inputs, and planting new trees required capital that many smallholders lacked.

The association also called for assistance to be provided upfront rather than through a "pay and claim" system, as smallholders face high replanting costs and a period without income while waiting for new oil palm trees to mature and produce fruit.

Smallholders face high replanting costs and must also endure a period without income while waiting for new oil palm trees to mature and produce fruit.

It also urged the Plantation and Commodities Ministry, the Rural and Regional Development Ministry and related agencies to review the minimum land ownership requirement of 0.5 hectares for government assistance in the agri-commodity sector.

Adzmi said the review should take into account smallholders who actively cultivate their land but own less than 0.5ha.