Indian rubber growers slam what they allege as a breach of contract committed by the Kerala government and tyre firms.
In a statement issued recently, rubber growers’ associations, including UPASI (represented by its Vice President N Dharmaraj), Association of Planters of Kerala (Chairman C Vinayraghavan), the Indian Rubber Growers Association (President Siby Monippally), The Federation of Natural Rubber Producers Societies (President Suresh Koshy) and Rubber Marketing Cooperative Societies (President P C Cyriac) said they were extremely concerned about and agitated at the blatant violation of the terms and spirit of the agreement by tyre companies and the Government of Kerala on December 18, 2014, in the presence of the other stakeholders.
They enlisted a number of issues, which are causing concerns. “There was a clear agreement that the tyre companies would buy RSS-4 at the daily reference price put up on the site by the Rubber Board. The formula for arriving at the daily price is – the ‘Bangkok RSS3’ price prevailing on a particular day plus 20% import duty plus 5% purchase tax. “The daily reference price on the day of the agreement was `130, based on Bangkok price of `103,” the statement said. It was also decided that dealers would reduce their commission by 50 per cent and charge only `1.50 as commission, so that farmers get a better farm gate price.
The purchase tax paid by the companies was to be refunded on production of the purchase bill – 2.5% within 30 days and the remaining 2.5% as an input VAT credit. Under the arrangement, the tyre companies would effectively get the material for the daily reference price minus the purchase tax. However, the notification dated 20-12-2014 waived the purchase tax for all grades of rubber, and modified the daily reference price as ‘Bangkok RSS 3 price plus 20%’