Plantation Industries and Commodities Minister Tan Sri Bernard Dompok, who made this suggestion, said at present, the Sabah Rubber Industry Board (LIGS) is the sole buyer of raw rubber from the farmers, thus monopolising the market.

"The problem is there is no other buyer who can penetrate Sabah to purchase raw rubber from the smallholders as LIGS is the sole buyer.

"In Sarawak, for example, the raw rubber is sold at market price as there is competition between many buyers.

"So, our concern now is how to increase the income of smallholders in Sabah and allow them to earn higher income like those in the peninsula and Sarawak," he said after officiating the Sabah Rubber Smallholders Association's (PPKGS) third anniversary, here.

He also told reporters this in response to a question of how to overcome the significant price difference of raw rubber between Sabah and other states.

"Standardising the price of the commodity in Sabah, Sarawak and the peninsula, and increasing the productivity of smallholders is two of the Key Result Areas (KRA) of the Ministry's Key Performance Indicator (KPI)," said Dompok in his speech earlier.

He elaborated that the rubber industry in Sabah in general, needs to include private sector operators so that they can bring further development by building factories and starting operations here.

"This is because the Government has limited capacity (to provide assistance and subsidy) to help the farmers. For instance, we cannot give them the same subsidies as that for fishermen," he explained.

Sabah has some 70,000 hectares of rubber-planted land with nearly all operated by smallholders, who contributed 97 percent or RM500 million of the annual overall revenue derived from the State's rubber industry.

Meanwhile, a memorandum of understanding (MoU) was signed Friday between PPKGS and peninsula-based SMY Agro Resources Bhd, to reconstruct the rubber smallholders industry in Sabah.