End monopoly, liberalise Sabah rubber industry

Dominic Legeh

'Crisis-hit' rubber tappers in Sabah may see light at the end of the tunnel if a proposal to liberalise the industry pans out.

TUARAN: Slammed with embarrasing allegations of Sabah Rubber Industry Board (LIGS) approved ‘middle men’, cashless payment chits and grossly delayed disbursements to rubber tappers, the state Barisan Nasional government is now scrambling to sort out these problems.

But time, it appears, is not on their hands, as Plantation Industries and Commodities Minister Bernard Dompok wants an immediate revamp of the Sabah rubber industry.

Dompok wants the government to adopt neigbouring Sarawak’s example and open the buyers’ market.
Currently, LIGS holds monopoly and is the sole buyer in the state, either directly or through its appointed agents.

Dompok said he had recently suggested to Chief Minister Musa Aman to adopt the Sarawak model following complaints by frustrated rubber smallholders about late payments for their produce sold to LIGS.

He believes liberalising the market would allow rubber smallholders to sell to anyone and not depend so much on one buyer, so that they can be paid faster.

Dompok also proposed that the 10% sales tax imposed on those selling their produce to rubber processing companies in Sarawak and the peninsula to be abolished, to enable fair competition between the industries in other states in the country.

“What is the use of imposing this (tax) … it means our industries cannot progress. We want to see the productivity increased,” he said.

Smuggling rubber sheets
According to ministry statistics, rubber production in Sabah is well below the national level.

“Sabah can only produce 1.2 tonnes per hectare per year whilst at the national level it is 1.4 tonnes per hectare per year.

“I think by liberalising the rubber industry in Sabah we will be able to boost productivity,” Dompok said.

He was speaking after officiating the launching of a seminar on latest rubber industry technology organised by Malaysian Rubber Board (MRB) here on Monday.

Dompok also said that he had even heard that raw or unsmoked rubber sheets were being smuggled out to Sarawak.

“I think this is happening because of the imbalance in payment.

“Once liberalised, it would be up to the rubber smallholders in Sabah to sell their produce to whoever, according to the market price,” he said.

“This is only my suggestion on what should be done in Sabah,” he said, adding that rubber is an important cash crop for Sabah and Sarawak due to the land available for agriculture.

On the problem of rubber smallholders falling prey to middlemen, he said that perhaps there should be some form of regularisation “much the same way we are dealing with the oil palm industry”.