Crisis in the Rubber Industry

Talk by DAP Organising Secretary, Mr.Lim Kit Siang, to the Slim River DAP Branch on Saturday,18th May 1968 at 5 p.m.

For over a year, there has been a crisis in the rubber industry.

When rubber price dropped to a 19-year-old low of 47 cents on September 13 last year, the government went into a frenzy of activities and won a lot of publicity by announcing its intervention in the rubber market until “a fair price” was obtained.

One assumed that the fair price the government had in mind then was fifty-five cents.

However, despite the reported sum of $10 million which had been allocated to the Government Rubber Trading Trust Account to stockpile rubber, the price of rubber had averaged below 50 cents since.

In 1967, the rubber industry lost $231 million compared to 1966 as the average price of rubber dropped by over 11 cents compared to the previous year. For every cent drop, Malaysia loses about $21 million in foreign earnings.

At the rate the present rubber price is going, in 1968 the rubber industry will lose from $100 million to $200 million compared to 1967, or taking 1966 as a base, in 1968, the reduction in earnings from rubber will probably be close to $400 million.

This is a crisis of no small magnitude.

What is disturbing is its repercussions on the employment opportunities of estate labourers and tappers. Many estates are sacking staff on the ground that it is uneconomical to operate many areas because of the low rubber price.

This is completely unjustifiable in a majority of cases. A recent issue of the Planter, the Journal of the Incorporated Society of Planters, calculated that rubber can be produced at 30 cents a pound without cutting down expenditure essential to long-term improvement of estates.

All that the fall in rubber price means is that estates will not get the fat profits they get in previous years, when rubber fetch a dollar a pound.

Since last year, there had been alarming spates of retrenchment in estates. The recent Arbitration Award seemed to have provided another excuse for even more retrenchments, piling up and running into thousands.

Managements are apparently taking advantage of the rubber crisis to be tough with workers and unions.

A case in point is the current industrial dispute at the Johore Labis Estate in Cha’ah, Johore, where 1,700 tappers and factory workers are on strike. The strike started because for two months, the estate sub-contractor, Mr. Sim Kim Chong, who is also MCA Assemblyman for the area refused to observe a ten-year-old practice of providing free transport for 200 tappers to their places of work.

Even when the tappers offered to pay half the expenses, Mr.Sim refused to budge. It may not be without significance that the Member of Parliament for the area is none other than the Parliamentary Secretary to the Ministry of Labour, Mr. Lee San Choon.

It is obvious that management are testing the weakness of unions and workers to find out how they can extract the maximum profits, in utter disregard of the welfare and interest of labourers and tappers, many of whom had earned fortunes and millions for managements in good years.

The workers must remain vigilant and united against these management intentions. A government, which has the interest of the workers at heart, would also take steps to forestall such a development, which can only lead to mounting unemployment, estate unrest and social disturbances.

To date, however, the Minister of Labour and the Alliance government do not seemed over-worried by the problems. They only make general press statements.

This is a serious problem, which requires urgent and immediate solution. We urge the Government to appoint a commission of inquiry to look into the entire problem of the adverse consequences on workers and employment opportunities arising from the fall in rubber price, and to make recommendations how workers, tappers and even small-holders can withstand the present crisis, how managements and labour can co-operate to ride the storm and not conduct suicidal industrial warfare.

This must be a commission which must be represented by government, management and workers. It must also be a commission which can report in six weeks or two months time, not like so many Alliance commissions which take years to produce a report, when the problem they had been asked to investigate had in all likelihood changed character.

Audited on 2021-03-17