Kuala Lumpur:The increase in the Rubber Production Incentive (IPG) to RM3.30 per kilogramme in Budget 2027 is expected to alleviate production costs and provide additional income support for smallholders.
According to BERNAMA News Agency, the National Association of Small Farmers of Malaysia (PKPKM) president, Adzmi Hassan, emphasized that this measure is crucial as smallholders face uncertainty in market prices and rising agricultural input costs.
Adzmi described the IPG rate hike as a positive step that demonstrates the MADANI government's commitment to supporting small rubber farmers amid rising costs. He highlighted that the IPG serves not only as financial aid but also as a vital tool to ensure the viability of rubber tapping activities, encouraging smallholders to maintain production.
Prime Minister Datuk Seri Anwar Ibrahim announced during the tabling of Budget 2027 that the current IPG rate is RM3 per kg. This marks the third increase since 2022 when it was set at RM2.50 per kg.
Furthermore, PKPKM expressed hopes that the government will consider providing full assistance under the Smallholder Oil Palm Replanting Financing Incentive Scheme (TSPKS) and simplify the distribution process for smallholders. The association stressed that significant capital is necessary for activities such as cutting down old trees, preparing planting areas, obtaining seedlings, and purchasing agricultural inputs.
Adzmi highlighted the need for the assistance rate to be considered up to 100 percent and provided upfront, rather than through a 'pay and claim' method. This is crucial as smallholders face high replanting costs and a period without income while new palm trees mature.
The association also called on the Ministry of Plantation and Commodities, the Ministry of Rural and Regional Development, and related agencies to re-evaluate the minimum land ownership requirement of 0.5 hectares for eligibility to receive government assistance in the agri-commodity sector. They argued that the requirement should account for smallholders who actively and productively grow plantations, even if they own less than 0.5 hectares of land.