Kerala rubber growers not happy with govt price offer, want import ban for a year

Written by M Sarita Varma | Thiruvananthapuram | Updated: Feb 8 2014, 09:23am hrs
The Kerala government has offered rubber procurement at Rs 2 above the Rubber Board-prescribed market price, but the natural rubber (NR) growers are upset that the policy intervention would not be complete without the long-term import ban.

It was on Friday that a meeting of the state cabinet decided to enhance its earlier offer of buying rubber at Re1/ kg to Rs 2 on a daily basis.

"However, nothing short of rubber import ban for as long as one year would be a permanent solution to the price crisis in NR," said Siby J Monippally, president, Indian Rubber Growers Association (IRGA).

"Unless the Centre makes a quick move on on this, the state's NR procurement offer would remain as a first-aid that cannot address the deeper malaise in the rubber supply situation," he told FE, reacting to the procurement intervention. Even if 70,000 tonnes of NR is mopped up from the market through procurement, it still can be imported at the current low levels of international prices, if imports are allowed, he pointed out.

"We have urged Centre for a ban on NR imports under advance licensing system for a year," Monipally said.Kerala has sought only for suspension of NR imports for six months.

Kerala earmarked only Rs 10 crore for procurement, but it has sought Rs 100 crore from the commerce ministry's price stabilisation fund to replenish procurement costs. The Kerala State Cooperative Rubber Marketing Federation, Kerala State Marketing Federation and the Rubber Producers Company have been assigned as the NR procurement arms.

After the Cabinet meeting on Friday, CM Oommen Chandy had told mediapersons that procurement would get going soon after completing the modalities."We would continue to procure till the market price reaches Rs 171 a kg, which has been the average NR price in the last three years. The procurement process will be reviewed, once the stock purchased crosses Rs 10,000 tonnes," Chandy said.

Kerala accounts for over 90% of country's rubber production. In view of the domestic price, hovering below Rs 140 per kilo, the state has also been considering trimming the VAT rates on the commodity.