Estimating the economic impact of the white root rot disease on the Malaysian rubber plantations

Abstract

Research indicates that white root rot disease can inflict severe economic damage on the Malaysian rubber industry, which is caused by the fungus, Rigidoporus microporus. Accordingly, the economic impact of this disease is assessed by the partial equilibrium model, called the Malaysian Agriculture and Plantation Greenhouse Gas Model. The model represents the major commodities of the Malaysian agricultural markets and predicts market prices and quantities between 2023 and 2063. Although Malaysia has a million hectares of rubber plantations in 2018, the results indicate the rubber plantations could lose 400,000 ha to the oil palm plantations. Furthermore, a slow 5% fungal growth rate could infect half of the remaining stands of rubber trees. The oil palms help buffer the losses from the fungus since Rigidoporus microporus cannot infect oil palm trees. The loss of the rubber trees leads to rising natural rubber prices that decrease natural rubber exports and increase natural rubber imports. As the fungal infection growth rate increases, the natural rubber price rises further while the trade balance worsens. In addition, the rubber plantation owners can eradicate the fungus by paying an annual treatment cost per hectare. A higher treatment cost leads to the landowners treating fewer trees.