Exploring relationships between rubber productivity and R&D in Malaysia

Abstract

In recent decades, the Malaysian rubber sector has developed from a supplier of raw materials to a rubber-based manufacturing industry producing export products such as gloves and tyres. In contrast, the upstream rubber sector has experienced a declining trend in both plantation area and production capacity. In 2015, almost 95% of rubber producers were smallholders who depended on plantations as their main source of income. Despite government efforts to boost growth in the industry, the area and productivity have continued to decline. This study attempts to examine the structural factors that led to a decline in rubber area and natural rubber production and proposes strategies to enhance productivity and returns for smallholders. A system dynamics approach was used to capture the feedback relationships between variables in the rubber production system as well as the temporal lags and non-linearities. The findings suggest that gradual research and development funding for development of high-yielding clones holds major promise for yield improvement and increased income for smallholders.