Acceleration Strategies For Rural Economic Development Through The Development of Natural Rubber Industry in Riau Province

Almasdi Syahza, Brilliant Asmit


The rapid development of agricultural sector in Riau province especially in palm oil commodity had taken over the place of natural rubber cultivation. Since natural rubber cultivation was still run and managed traditionally, its productivity level was low with around 738 kg/ha/year.  Lack of maintenance of the rubber trees resulted in low quality raw rubber or latex and many traditional rubber farmers also still produced impure or unclean raw rubber. Moreover, the price of latex at the farmer’s level was determined by the tauke-tauke desa or the village’s illicit brokers and the farmers did not have the power to bargain with them. The Regional Carrying Capacity Ratio (RCCR) analysis of traditional natural rubber cultivation was 1.53 which means that the raw rubber material available exceeds the capacity of the industry. These conditions therefore suppressed the price of raw rubber from the demand side (industry). To increase the price at the farmer’s level, a processing industry needed to be developed to increase the bargaining power of the rural farmers. The economic multiplier effect index in natural rubber development areas in 2014 decreased to 0.65 from 1.83 in 2010. This decrease shows that the natural rubber cultivation had decelerated. However, the main reason for this decrease was because the rural community was beginning to shift to another commodity, which is palm-oil. 

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