The Indian Rubber Growers' Association has appealed to Prime Minister Manmohan Singh that 20 per cent import duty on natural rubber should be continued and that the import duty on used tyres should be raised to 20 per cent.
The association, in a memorandum to the Prime Minister on Monday, requested that import duty on cycle tyres be increased, an initiative be launched to develop rubber cultivation in the North East of the country, a welfare fund be established for rubber tappers and no ban be imposed on futures trading in natural rubber.
Association general secretary and Rubber Board member Siby Monippally said in the memorandum that natural rubber played a key role in Kerala's economy and the crop contributed substantially to the State's economy.
ADVERTISEMENT
The memorandum said Kerala produced more than 92 per cent of the natural rubber in the country. “This has been achieved over the past 50 years by the hard work of small rubber growers of Kerala,” the memorandum said. The small growers, owning below one hectare, contributed about 90 per cent of the total rubber production in India.
Rubber cultivation was picking up in the States of Assam, Tripura and Meghalaya. North Eastern States had the potential to bring about 4.5 lakh hectares under rubber.
The memorandum lauded the role played by the Rubber Board and said that professionalism introduced at the primary and apex level had strengthened the cooperatives to deal directly with the market worldwide.
ADVERTISEMENT
The cooperatives and private players carried out large volumes of business with the consuming industry in Australasian and European countries, entering into long-term contracts, earning foreign exchange. Profit earned through the business was passed on to the farmers by the cooperatives, which had linked the rubber trade with the commodity exchanges. The farm gate price of rubber was 98 per cent of the market price, which was one of the unique features of Indian rubber industry, the memorandum said.
It said the introduction of futures market had helped establish an “efficient, transparent parallel mechanism” for all stakeholders.
Export of tyres had grown and annual results of tyre companies pointed to a healthy industry, the memorandum said. It said that most of the import of natural rubber was made without any Customs Duty in lieu of export incentives. Import of used tyres from China was on the rise and was affecting domestic industry.
The long-term strategy, the memorandum said, had been evolved to meet a requirement of 15 lakh tonnes of good quality natural rubber by 2020.
Under these circumstances, there was no justification by the consuming industry to demand a reduction in import duty on natural rubber and a ban on futures trading. The demands of the consuming industry was described as “unreasonable and without any basis” by the growers.