The state cabinet on Wednesday decided to procure rubber from farmers at R5 more than the market price for a kg. Earlier, it was being procured at R2. Kerala government will also meet Prime Minister Narendra Modi on Thursday to apprise the Centre of the crisis developing in the rubber sector and to suggest quick intervention measures, chief minister Oommen Chandy said after the cabinet meeting.
A seven-minister delegation will accompany the CM to convince Modi of the market issues faced by rubber growers, the need to hike import tariffs on natural rubber and the possibility of making rubberised bitumen mandatory in the construction of national highways.
A recent fall in prices has caused distrust among rubber growers and eroded their confidence that it is a lucrative crop, forcing most small farmers to stop tapping rubber trees. The domestic price of RSS-4 grade has fallen to R120 per kg.
This has reflected in Rubber Board of Indias production and stocks data for September. From 80,000 tonnes in September 2013, rubber production has tumbled to 60,000 tonnes in September 2014, marking a 25% fall in output. Stock position too is not comforrtable. Compared to 223,000 tonnes in September 2013, the stock position in Sepetember 2014, is down by 10% at 200,000 tonnes. The mark-up of R2 was hardly satisfactory. Besides, the procurement process was staggered and the payment often delayed, said Sibi Monipally, secretary, Indian Rubber Growers Association (IRGA).
Meanwhile, the trend of rubber farmers turning to other crops has become an issue. The bulletin of the Kuala Lumpur-based Association of Natural Rubber Producing Countries indicates that the NR output growth of the worlds biggest rubber-producing country, Thailand, could halve in 2014 and that in Vietnam farmers have been refraining from tapping and felling rubber trees. As a commercial crop Indian farmers too are turning away. This will impact supply and ramp up imports, ssaid Josekutty Antony, president, Rubber Nursery Owners Association.