Natural rubber price in a major free fall has the makings of an emerging socio-economic issue in Kerala, the largest rubber growing belt of the country. From about `18,800 crore in 2011-12 to `16,150 crore a year later and now only `14,250 crore by way of revenue earned on natural rubber sold, one gets the picture of what ails this sector. With slaughter tapping on contract basis a major revenue source for households and lucrative business opportunity for traders, plummeting rates of up to `100 per kg (from `240 some 30 months ago to `145 a kg now) over the last one year has been leading to social discord among those who have entered long-term deals.
Consider the economics of an average rubber grower: about 300 rubber trees in a two-acre farm given for slaughter tapping for 30 months earn, on the lowest side, a consideration of `18 lakh. The downside is that if the farmer has got only say `10 lakh as payment so far, it is more likely than not that the remaining `8 lakh would no longer be forthcoming. Here, the calculation is based on a rate of `6,000 per tree. But in many cases, the rates go up to `7,000 and in rare cases up to `8,000 and a well planned farm will have 200 trees per acre. There are thousands of planters who have entered deals with contractors for consideration ranging from `30 lakh, going up to over `one crore, where deals are coming unstuck mid-way.
On Wednesday, one such case led to the alleged murder of a land owner by his contractor “harvester of latex”, pointing to the serious turn this cash crop issue is taking in God’s own country. The driving force of the crime was the inability of the latter to honour the contract, given the free fall in prices over the last couple of years. Clearly, planters and traders alike will think twice before entering more self-styled forward trading contracts, whether enforceable by law or otherwise.