While Union Cabinet had, last Saturday, decided to plead with World Trade Organisation (WTO) for shifting rubber from industrial raw material category to agricultural product slot, Supreme Court had, on Tuesday dismissed the Union Government's petition to review the order to fix a minimum price for natural rubber.

Although the RSS-4 grade shed a marginal Rs 1 per kilo over the last week, the rubber business morale in central Kerala was obviously bolstered by the developments. The Union Cabinet's decision to stick to MS Swaminathan Committee recommendations has been the deliverance of the small holding rubber farmer, P Abraham, a leading rubber dealer told The Financial Express , P Abraham, a leading rubber dealer told The Financial The Prime Minister's visit to Kottayam, the country's rubber-belt, has apparently paid off in terms of more sympathetic understanding of the farmers' issues, he said. Dubbed industrial products, rubber and jute had been warded off as pariahs from WTO's list of items, eligible for 300 per cent tariff protection.

The import tariff of rubber is only 25-40 per cent. Although the Centre has banned the import of natural rubber, when India's pact with WTO is activated from April 1, the poor tariff protection will make Indian rubber vulnerable to dumping by other rubber producing countries.

Sources among rubber dealers said that even a 100-per cent tariff protection would allow recovery of rubber prices. However, there are widespread apprehensions whether the plea for re-classification will include only RSS-4 or the latex also.

The industrial product classification was also standing in the way of fixing a minimum wage for rubber. All that the rubber market had so far was a benchmark price system. The Government of India, had on September 28, 1998, announced the revision of the benchmark price of natural rubber at Rs 3,405 per quintal for RSS-4 grade and Rs 3355 per quintal for RSS-5 grade. It may be recalled the price peak for RSS-4 in the last year has been the Rs 3,250 per quintal in July 2000. Despite the prospects of concerted efforts, India's natural rubber's crusade for getting into the farm product category is likely to be no picnic. In tune with the crude oil prices, the prices of synthetic rubber is riding high. It is anybody's guess that the lobby of foreign synthetic rubber producers will try to tear down any attempt in WTO to ward off imports to India. "As Mr MS Swaminathan has suggested in his report, our only course of action is to cling to the small farmer protection clause in the WTO agreement," Mr Abraham pointedout.

Meanwhile, the Supreme Court judgement on Tuesday has also spelled out that buying and selling of rubber below minimum price was punishable. The case was triggered by the Edamaruku Rubber Producers Society and Independent Farmers' Association filing writ petitions, in Kerala High Court seeking direction to the Government of India, for fixing minimum price of rubber at Rs 55 per kilo.