Recent media reports on the Kerala government’s plan to modify laws governing land utilisation in the crisis-ridden plantation sector deserve attention for three important reasons: background; feasibility of the proposal; and policy implications. Prima facie , the proposed shift from mono-crop to multi-crop farming systems in the sector is presumed to address the fall in farm incomes for four major plantation crops, viz, natural rubber, tea, coffee and cardamom. However, the policy change has the potential of generating irreversible webs of complex issues by resorting to unsustainable strategies for short-term gains. Hence, it is imperative to reflect on the proposal from a policy perspective.

The development experience of Kerala’s agricultural sector has been unique because of the dominance of perennial cash crops, especially the four plantation crops. Despite the contrasting fortunes of the four crops in the post-independence phase, the total area under this sub-sector has attained a prominent position not only in the total cropped area in the State but also in the total area under these crops in the country (around 42 per cent).

Price uncertainty

Kerala is considered as the ‘plantation enclave’ of India, bearing important policy implications in the context of challenges posed by the trade policy reforms. The State has been the worst-hit victim of growing uncertainties of the market integration process since the late 1990s. The responses of the planting community were reflected in cost-saving measures, including abandonment of prescribed agro-management practices, as there are well-defined biological and technological limits for yield improvements in the short run. Conversely, the declining producers’ share in the value chain has been relegated to the background as concerns of academic curiosity.

For example, except in the case of natural rubber, the relative shares of material costs in the net value added beyond the production sector by other crops is rather insignificant. Although the estimation of the net value added and surplus appropriated beyond the production sector for natural rubber is rather complex, infirmities in primary marketing have been more pronounced after the removal of quantitative restrictions on its imports from March 31, 2001.

In effect, while the farm-gate prices realised by the producers have always been under the perennial threat of free-market price fluctuations, retail prices have been free from them due to a few large players controlling the market. The persistent uncertainties in the farm-gate prices have been denting the prescribed agro-management practices with important implications on annual average growth rate in productivity of the crops. In sum, the plantation sector is squeezed between limited farm management options and bleak prospects of remunerative prices.

Land utilisation

The moot question on the proposed amendment is whether it will enable the sector to tide over the crisis by enhancing farm income from the recommended intercrops. In fact, various unsuccessful attempts have been made to cultivate horticultural crops in the crisis-ridden tea, cardamom and coffee areas since the late 1990s. Alongside, there have been earnest attempts to exploit the unique geophysical features of the highlands, especially for promoting eco-tourism in tea-, cardamom- and coffee-growing regions.

Informal efforts by the planting community have gained legitimacy with the State Cabinet’s decision to allow 5 per cent of the plantation land to be utilised for tourism and for growing medicinal plants, floriculture and vanilla in 2005. In effect, such initiatives appear to be bailout mechanisms to sustain the privileged exemption from the land ceiling legislations accorded to the plantation sector, rather than solutions to tide over the crisis.

Apparently, maximisation of income from the plantation land located in the unique ecosystem is emerging as the preferred goal.

Broadly, there are two critical issues confronting the plantation sector: dichotomies in the markets and the ageing area under the crops. From a policy angle, efficacy of the proposed cropping strategy deserves thorough screening of the increasing share of part-time farmers, diversified sources of household income and growing dependence on hired labour in the dominant small-holder sector. Therefore, unless crop- and region-specific systems are provided, the chances of a gradual abandonment of the plantations loom large in the emerging scenario.

An essential prerequisite for a systematic revitalisation programme is a comprehensive database on farms and farming households. The accumulated experience of R&D institutions under the commodity boards would be helpful in exploring the agro-economic feasibility of new cropping systems for survival.

The writer is former Joint Director of the Rubber Board. Views are personal

Related Topics
comment COMMENT NOW