Rubber goes for a swap

Pineapple, a major inter-crop of rubber is gradually turning into an alternative crop in the rubber heartland of Kerala. A shot from Pala in Kottayam.   | Photo Credit: VishnuPrathap

Mathew Abraham, 41-year-old IT professional employed in London, has just returned to his ancestral home at Muttuchira in Kottayam for a month-long vacation. Mr. Abraham, along with his family, will visit a few friends and relatives in and around Kottayam before he returns to London.

However, what tops his priority list for this year’s visit is to hive off a third of the six-acre rubber plantation under his family’s possession to a fruit alternative — pineapple.


“As a member of a family that has lived off rubber for generations, switching to some other crop has never been an easy decision. But then, rubber is no longer a viable option, given that the income an acre has hit rock-bottom at ₹2,000,” he says. He then lists the hardships in continuing with the legacy crop; the risks of falling prices, rising costs and drop in yield, among others.

Mr. Abraham is not alone in the crop-switch. Indeed, he represents an emerging crop of low and mid-scale planters in Kottayam — the rubber heartland of Kerala — who have given up their plantations to plantain, pineapple, rambutan or mangosteen, to name a few.

With 5.51 lakh hectares of area under rubber and production volume of 5.40 lakh tonnes, Kerala accounts for 77.9% of the overall rubber production in the country. Hence, any fluctuation in the sector is slated to affect the State. As per official estimates, farmers have given up rubber cultivation in over 1,000 hectares on an average during the last few years. With the current period of instability expected to prolong, the authorities expect the rate of attrition to go up.

Fragmentation of holdings

The significant slide in natural rubber prices, which currently hovers around ₹120-₹130 range a kg (RSS 4 grade) after touching a record ₹250 a kg in mid 2011, has led to fragmentation of holdings with realtors taking over the scene. While everything — wages, input costs and cost of living — had gone up with the boom, the slowdown in prices came only with a fall in yield and thereby, the overall production levels. This sudden turnaround has exposed many planters — mostly small and medium-scale growers — to a painful reckoning, contributing to widespread panic in central Kerala region. Plunge in prices coupled with the high costs have left them staring at an uncertain future.

Commenting on the trend, J.K. Thomas, Managing Director of Malankara Plantations Ltd., the first Indian-owned public limited rubber plantation company, pointed out that the price outside was already less than ₹100 a kg though a higher duty slab has held the overall import price at around ₹120 a kg. While the area under rubber around the world has gone up by 50% since the turn of the 21st century, the growth in rubber consumption during the same period has gone up by only a nominal 3%.

Supply-demand gap

“We have come to a stage where supply has far exceeded demand and until that parity is restored, people will have go in for some other options with their land. The large plantations, though not entitled to any subsidies, are forced to continue as they have other sources of income,’’ he said.

The existing holders, however, will also stop operations once the government brings down the import duty, causing import prices to crash further, adds Mr. Thomas.

Jose K. Mani, Rajya Sabha member, says the authorities have withheld the disbursement of subsidy to small and medium-scale holders for the last four years. With the plantations operating at a loss and facing foreclosure, the timely disbursal of subsidies would have helped to salvage the sector to a great extent.


“Uncertainty over subsidisation of farmers has resonated as an attack on the sector, an impression only enhanced by the government inaction on a comprehensive plan to save the crop. All of this has combined to prompt the farmer to experiment other crops, which anyway will become unsustainable in the long run,” he noted.

Meanwhile, industries that use natural rubber as a core raw material have used the falling prices to cushion the losses they had incurred. For instance, the rubber mat industry units in Kottayam — which together consume about 30 tonnes of natural rubber on a daily basis — are doing brisk business ever since the fall in prices.

“But this has also triggered an unhealthy competition, with the profit margins dropping closer to the breakeven point. This may spell the death of the industry once the rubber prices begin to rise,’’ says Linu Cherian, secretary, All Kerala Rubber and Model Mat Association.

Amidst the gloom, the Rubber Board, however, professes to be relatively sanguine. “The production levels have significantly come down with the fall in planting area, but this may take some time to reflect in the market considering the accumulation of stock since the global downturn of 2008. The current slide in demand is part of an economic cycle and it will recover once additional stock runs out,” explains M.G. Satheesh Chandran, Nair, Deputy Director, Rubber Board.

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Printable version | Jan 26, 2021 3:46:06 AM |

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