The Hindu : Better rubber prices predicted

Online edition of India's National Newspaper
Thursday, Feb 13, 2003

Southern States

Southern States - Kerala

Better rubber prices predicted

By C. Gouridasan Nair

THIRUVANANTHAPURAM Feb. 12. Production trends in major rubber producing countries indicate that the chances of natural rubber prices going down to very low levels are very limited and it is very likely that the rubber price regime will improve in favour of growers in Kerala in the medium to long run, according to the M.S. Swaminathan Commission on WTO Concerns constituted by the State Government.

In its final report to the Government, the Swaminathan Commission has pointed out that given the present growth trends both in natural rubber production and the dependent industry, the deficit in the availability of natural rubber from internal sources would be 2,29,000 tonnes against a production of 7,81,000 tonnes and consumption of 10,10,000 tonnes by 2010-11.

The commission says that globally short supply of natural rubber has been forecast in the years to come. One of the big league producers, Malaysia, is moving away from the rubber sector. Production of rubber in Malaysia has come down from the peak level of 1.53 million tonnes in 1980 to 6,15,000 tonnes in 2000. India had overtaken Malaysia in 2000. Thailand, the commission says, also is likely to follow the same trend. Equally significant, Indonesian production has been hovering around 1.5 million tonnes during the second half of the Nineties. These two countries account for 55 per cent of the world production in natural rubber.

According to the commission, continuance of rubber cultivation is imperative for Kerala which accounts for 84 per cent of area under rubber and 92 per cent of the rubber production in the country. The crop, which occupies almost one-fifth of the total cultivated area in the State, ensures the livelihood of 9.13 lakh houses in Kerala and supports a worker population of 2.82 lakh within the State and 3.7 lakh workers employed in rubber-based industries all over the country. Rubber brings in Rs. 250 crores to the State exchequer by way of purchase tax and agricultural income tax and over Rs. 80 crores to the national exchequer by way of excise duty.

The commission has sought measures at the level of the Union Government and the State Government to ensure sustainability in the rubber cultivation sector and to strengthen it to face the challenges posed by the new world trade regime. It has asked the State Government to press for enhancement of the bound rate of tariff for processed dry forms of natural rubber from the present 25 per cent to 40 per cent. The commission has termed as `inexplicable' the country's acceptance of the 25 per cent bound rate instead of 40 per cent `which should have been the bound rate if the principle of duty structure that prevailed as on January 1, 1990, taken as the criterion for fixing the bound rate for industrial products, was followed'.

The Swaminathan Commission has also sought recategorisation of rubber as an agricultural commodity. Currently, rubber is categorised as an industrial product. Natural rubber should be brought under the Agreement on Agriculture (AoA) regime so that it is subjected only to relatively softer provisions as well as rendered eligible for protection that is applicable to agricultural commodities. For this, consensus would have to be arrived at with natural rubber producing countries.

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