Bishop’s statement on rubber prices sets rubber planters’ expectations soaring

Though the political storm unleashed in Kerala by the statement of the Thalassery Archbishop of the Syro Malabar church Mar Joseph Pamplany 10 days ago that the BJP will get an MP from the state if the Centre raises the price of rubber to Rs 300 per kg has died down, rubber growers are expecting it to have a positive impact on the attitude of the Centre and the state government towards them.

They reckon that the statement was the trigger for the state government to release a sum of money to clear some of the arrears due to the small rubber growers under the Rubber Price Stabilisation Fund (RPSF). At the same time, they are also harbouring hopes of some sort of incentive from the Union government before the next Parliamentary election.

For FY22, the state government had earmarked Rs 500 crore for the benefit of farmers cultivating less than two hectares of land under the RPSF. The difference between the market price of a sheet of rubber and the support price fixed by the government, i.e., Rs 170 per kg, is given to the farmer as subsidy. The price of tyre-grade rubber sheet RSS-4, which hovered in the range of Rs 140-145 for the past several weeks, has inched up to Rs 149.50 per kg in the last few days on dwindling arrivals into the market following the onset of the lean season.

Until the bishop’s statement, the state government took its own time to clear arrears due to the farmers. Rubber Board sources said the government has sanctioned Rs 55 crore under the RPSF to clear the arrears from July last to February this year. Of this, Rs 30.67 crore has been released. But this settles only a part of Rs 135-crore worth of bills submitted by the farmers. The total number of beneficiaries under the scheme stands at 5.44 lakh farmers.

“Every year, they declare a huge outlay for the fund in the Budget, but release only a small amount. Last year too, they released only a small amount out of the Rs 500-crore (outlay). After March 31, it will be a new financial year for which they have earmarked Rs 600 crore in this year’s Budget,’’ said Babu Joseph, General Secretary of the National Consortium of Rubber Producer Societies.

Many small farmers had turned to production of latex as its prices zoomed following a surge in demand for gloves as the pandemic spread. For some weeks, latex prices ruled above sheet rubber prices, at close to Rs 200 per kg. But now latex prices have slumped to around Rs 130 per kg. According to Joseph, latex producers do not derive much benefit from the RPSF.

“Of about seven lakh active small rubber farmers in the state, latex producers should be around three lakh. And most of them own under one hectare of rubber (plantation). They get a subsidy, which is Rs 12 per kg lesser than that paid to sheet rubber producers. While sheet rubber producers get Rs 20.50 per kg as subsidy at the current market price of Rs 149.50 per kg, latex producers get Rs 8.50, which is unfair as they deserve more,’’ he said.

Many rubber growers think that the bishop’s statement of Rs 300 per kg for rubber is not an exaggeration. They feel the issue has been politicised without understanding the plight of the rubber farmers in Kerala, who have been battling rising cost of inputs like manure, pesticides and rain guards, besides soaring labour cost.

“If there is a will anything is possible. The state government can raise the support price for rubber to Rs 200 per kg. The Central government can provide another incentive of Rs 50 to 100 per kg for the farmer, which can provide Rs 300 for the rubber farmer,” said George Valy, President of Indian Rubber Dealers Federation.

Yet another suggestion made by Babu Joseph is that the Centre can procure rubber from the farmers at a fixed price of Rs 200 and sell them to tyre makers at the import price, so that consumers too are benefitted. The price difference can be subsidised by the government. At present, the landed cost of block rubber, which the tyre manufacturers import, is almost the same as the market price of sheet rubber in India, he added.

When contacted Rubber Board Chairman Sawar Dhanania said prices are determined by market forces and governments don’t play any role in that. “But the Centre can provide support to the rubber growers through other means. It can look at increasing the rubber re-plantation subsidy from the current Rs 25,000 per hectare,” he said. The growers have demanded an increase in re-plantation subsidy to Rs 1 lakh or more.