RUBBER tapper Abdul Mutalib Abdul Mukti was shocked when told of glove manufacturing giant Top Glove’s massive profits this year, thanks to the Covid-19 pandemic.

“I had no clue. Our income has been the same, it barely went up,” he told The Malaysian Insight on a recent visit to Baling, the rubber tapping heartland of Kedah.

The 47-year-old from Kg Dalam Wang said rubber tappers in Baling earn about RM500 a month based on the price of scrap rubber which ranges between RM1.80 and RM2.00 per kg.

With almost every economic sector except for essential services shut down during the movement-control order (MCO) that began on March 18, it did not occur to Mutalib that rubber glove manufacturers have been raking in huge profits.

Top Glove Corporation Bhd recorded a net profit of RM1.29 billion for its fourth quarter ending August 31, 2020. For the full financial year of 2020, total net profits reached RM1.87 billion.

This enabled a dividend payout to shareholders of 11.8 sen per share, totalling RM961.2 million for the whole financial year.

“It feels unfair. We tap the rubber but we only get a few cents. Sometimes there’s rain, and we cannot even go out to tap.

“The price of rubber is volatile, yet rubber glove producers still enjoy lucrative profits,” said the father of five, who also repairs motorcycles for side income.

Mutalib’s rubber smallholding of 200 trees on one acre was inherited from his late father.

“Our earnings have not changed much over the last 20 years. In fact, we feel worse off due to the rising cost of living. That is why many rubber tappers have more than one source of income.”

In January 2019, the government fixed the floor price of scrap rubber at RM2.50 per kg and rubber tappers may report to the Rubber Industry Smallholders Development Authority (Risda) if middlemen fail to buy at that price.

“However, it is not easy to file a report as Risda’s office is located far away in Sg Petani. There is a Risda office in Baling but it does not offer that service,” Mutalib said.

Shafie Awang, another rubber tapper from Kg Bechah Sawa in Baling, was also shocked when told about Top Glove’s profits and shareholders’ dividends.

“Although we don’t have to pay taxes and have low operating costs, our labour is not fairly compensated.”

He said a rubber tapper is able to work only 18 or 20 days in a month because of rainy weather.

Shafie said the government or its agencies should buy directly from rubber tappers instead of traders and middlemen.

“Let the government fix the price, which can be higher than what it is now, and buy directly from us,” he said, suggesting that RM3 per kg would be a fairer price.

By buying directly from tappers, the government could also earn some profits from sales to rubber goods manufacturers, he added.

Low price benefits big companies

Earlier this month, International Trade and Industry Deputy Minister Lim Ban Hong said Malaysia’s exports of rubber gloves had increased to RM15.06 billion from January to June this year, compared to RM10.03 billion for the same period last year.

North of Baling is Padang Terap, where the district’s Rubber Tappers’ and Growers’ Association chairman, Ahmad Zulkifli Ismail, said little had changed for rubber tappers in the last 20 to 30 years as the commodity’s price had largely stayed the same.

Many tappers still live in ramshackle houses with broken roofs while the rest of the country receives good infrastructure.

“No matter how much the economy develops, the life of rubber tappers remains the same. Sometimes the price is RM2, sometimes lower.

“The surplus in the rubber industry is monopolised by large companies, the ones who suffer are the rubber tappers.

“It is still hard for some families to buy even a 5kg bag of rice. Some of us still buy on credit at local sundry shops. It’s been the same story for decades,” Zulkifli said.

Rubber tappers need an association dedicated to their development and welfare, just as the government has established Persatuan Nelayan Kebangsaan (Nekmat) for fishermen under the supervision of the Fisheries Development Authority of Malaysia (LKIM).

“Rubber tappers have no association under any government agency, whereas fisherman and planters do,” Zulkifli said, adding that Risda has not done a good job for rubber tappers.

Economist Prof Barjoyai Bardai said the state of affairs highlighted economic inequalities and the injustices of a capitalist system.

“The price is determined by global supply and demand. Today, Malaysia is a small-scale rubber producer. Other countries such as Indonesia, Thailand, and Vietnam are larger producers.

“So we cannot influence the price of rubber and it has stayed low, and this benefits rubber goods companies tremendously,” he said.

One possible solution for rubber tappers to improve their lot is for rubber-producing districts to develop their own downstream products from the raw material.

“Rubber scrap producers have to figure out how to build their own products.

“For example, they could buy a small rubber glove producing machine and procure raw materials from rubber tappers and produce gloves themselves. It is about adding value to the natural resource,” suggested Barjoyai. – September 23, 2020.