Agri Business

Centre examining interests of rubber growers, users to frame balanced rubber policy

Amiti Sen New Delhi | Updated on February 26, 2018

While growers need remunerative prices, user industry needs to keep costs down

The Centre is weighing the demand of rubber growers for higher prices against the needs of user industries in order to come up with a balanced rubber policy which is long over-due.

“Officials from the Commerce Ministry have had detailed stakeholder consultations with both rubber growers and the manufacturing industry like tyre producers. It is a complex situation as the manufacturing industry is highly dependent on rubber and sensitive to any price increase, whereas rubber farmers are not getting remunerative prices,” a government official told BusinessLine.

The government will weigh a lot of factors, many of them clashing with each other, before it comes up with an appropriate policy response, he added. “While rubber growers need to get a price which would make it feasible for them to continue growing rubber, the manufacturing industry can stay competitive in both the domestic and export markets only if the price of the raw material is in tandem with global prices,” the official said.

Task force likely

Commerce & Industry Minister Suresh Prabhu, who met Kerala Agriculture Minister VS Sunil Kumar last week to discuss the problems being faced by rubber growers in the State, said a task force between the Centre and States will be constituted where all stakeholders would participate. Kerala accounts for more than 90 per cent of rubber grown in the country with the rest produced in the North-East, Tamil Nadu and Karnataka.

“The recommendations of the task force will also be used as inputs by the Commerce Ministry for the rubber policy,” the official added.

Declining prices

Rubber growers are facing a distress situation as prices have crashed to around ₹125 per kg as opposed to a high of ₹210 about four years ago. “Growers in Kerala feel that it is no longer viable for them to grow rubber. In case they have already grown and the crop is mature, they do not want to tap it. The reason is that the wage cost in Kerala has grown a lot in a couple of years and they find the cost of tapping very high,” the official said.

Plantation owners have tried to adopt cost cutting measures by getting labour from the North-East and training them in tapping and processing, but it has not yet proved to be a satisfactory solution, the official added.

“Following a suggestion by the Kerala High Court that the Rubber Board should prescribe a minimum price for rubber which will be mandatory for buyers, the board had prescribed a price but it was never implemented. The reason was that if you prescribe a high domestic prices, users will resort to more and more imports,” the official said.

While it is important to pay attention to the needs of farmers, one can’t ignore the fact that rubber products manufacturing industry export goods worth an estimated ₹20,000 crore annually, the official added. “This could take a sharp hit if domestic cost of production is increased,” the official said.

Published on February 26, 2018

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