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I. STATE OF THE ENVIRONMENT IN MALAYSIA
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C. Agriculture
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2. Rubber situation
Currently, natural rubber and manufactured rubber products account for about 4 per cent of Malaysia's total export earnings. Its share to the value added declined from 62.4 per cent in 1960 to 1.7 per cent in 1995. However, that does not mean the commodity, once the mainstay of the nation, will not have a role to play in future, especially in achieving Vision 2020. On the contrary, with the advancement in the industrial sector, a greater portion of natural rubber will be channelled into rubber-based industries to be manufactured into higher value-added products. In 1995, the rubber product industry contributed about M$ 3.2 billion to Malaysia's total export earnings of about M$ 185 billion.
The rubber industry is divided into two sectors: the large estate sector of 400 or more hectares, and the smallholder sector where units of land are usually no more than 2-3 hectares. Smallholdings make up about 1.4 million hectares (82 per cent) while the estate sector accounts for 329,400 hectares (18 per cent). Estates account for 28 per cent of the total rubber produced and 18 per cent of the area. They are more efficiently operated than smallholdings. Estates manage their own replanting and are more readily inclined towards accepting technical improvements.
Smallholders play a prominent role in the Malaysian rubber industry. About 82 per cent of the total area under rubber belongs to them, contributing 72 per cent of the country's production. Rubber smallholdings can be classified into two main groups: independent holdings (comprising individual and subdivided holdings) and organized holdings. Individual holdings are units which are under individual family ownership, while subdivided holdings are lots of rubber land which have resulted from the fragmentation of estates. Organized holdings are those in land schemes developed by the Federal Land Development Authority (FELDA), the Federal Land Consolidation and Rehabilitation Authority (FELCRA) and various State governments and statutory authorities, notably the Rubber Industry Smallholders' Development Authority (RISDA). An estimated 500,000 rural families are involved in rubber production.
Malaysian natural rubber production underwent a dramatic change in the 1980s. The area under rubber has been declining, largely as a result of the conversion to oil palm and other crops. Between 1980 and 1984, natural rubber output remained stagnant at 1.5 million tons. In the second half of the decade, with the exception of 1988, annual output averaged 1.45 million tons with marked declines in the 1989-1991 period. In 1992 and 1993, Malaysian natural rubber production continued to decline, reaching 1.1 million and 937,092 tonnes respectively, because of labour shortages and smallholders being drawn to other economic activities that provided better returns.
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