One month after the launch of the much-hyped government scheme to ensure that rubber farmers get a minimum of Rs 130 per kg, it has not benefited the farmers and small dealers on the ground. Disgruntled rubber farmers and traders have said that they have lost out from a government scheme meant to assist them get a minimum of Rs 130 per kg for their rubber.
Going by the Indian Rubber Board figures, tyre makers lifted only 12,600 tonne of rubber since the scheme came into effect on December 19. This is in sharp contrast to the average monthly rubber consumption of around 60,000-70,000 tonnes, which includes all grades of rubber.
“Assuming that tyre makers lift 30,000 tonnes of RSS-4 grade rubber every month, the off-take is not even half of the requirement,” sources pointed out.
However, Automotive Tyre Manufacturers’ Association (ATMA) director general Rajiv Budhiraja said that the off-take was higher than the corresponding figures of the previous year, or when the scheme was not operational.
Importantly, there was a change in the much-publicised scheme, which was kept away from the public.
Under the revised scheme, which was finalised on December 31, instead of Rs 130 per kg for RSS-4 grade to be notified daily until March 31, the Rubber Board would announce daily reference prices only at 20% above the price in Thailand.
So, under the new formula, the Rubber Board’s reference price for today, for instance, was only Rs 125 per kg, up 20% than the ruling price of Rs 104 per kg in the Bangkok market.
Under the earlier scheme, if the price was below Rs 130 per kg, even after adding 20% (which is the import duty on rubber), the government would pay up the remaining amount so that farmers are ensured a higher price.
The new formula was finalised at a meeting held on December 31, in which all the stakeholders participated in the presence of Chief Minister Oommen Chandy and the chief secretary, among others.
“To our surprise, the farmer representatives said that they only wanted 20% more than the Bangkok price, though the State Government had agreed to compensate the remaining amount to tyre-makers so that they lift the rubber at Rs 130 per kg,” said the sources.
Harrisons Malayalam, the Indian Rubber Growers Association and the National Federation of Rubber Producers Societies represented the rubber farmers’ at the meeting.
Though the Chief Secretary had promised that an order on the new pricing formula would be issued on January 1, no order to this effect has been issued so far,” the sources said.
The Chief Minister had offered to pay the tyre makers the balance amount from the government coffers, but the tyre makers said they did not want any government concession, even while promising to lift natural rubber at Rs 130 per kg. This also has not happened.
“Small dealers and farmers, who constitute 90% of the rubber growers in the State, however, have not benefited from the scheme,” three dealers said. This is because small farmers who sell quantities ranging from 5-10 kg are not even getting Rs 125 per kg. “We have to take into account the handling charges, transportation charges etc,” said one dealer.