The rubber procurement scheme launched by the Kerala Government fails to bring any benefit to the growers as the commodity remains under pressure with the decline of spot rubber prices. The delay in implementation of the scheme, coupled with the severe lack of funds, has negated any chance of sustainability for the rubber market.
The ambitious scheme envisages to procure rubber by governmental agencies directly from the farmers at `2 more than the market price fixed by the Rubber Board. It was said that the procurement will continue until the market price stabilised at `171 per kg.
The announcement was made in the first week of March following a slump in the prices on account of a huge surplus of natural rubber stock. The stocks piled up due to unnecessary imports. A consortium of district cooperative banks was also formed to deal with the issue the following week.
Following the procurement, rubber growers were expected to benefit by nearly `4 per kg, `2 less than the market price from the agencies. As per the scheme, the agencies will be provided `6, of which `2 will be provided to the farmers.
“As much as `6 crore have been earmarked for these agencies as the handling charges. The initial target was 10,000 tonnes. It needed a working capital of around `150 crore. This was supposed to be granted by a consortium of district co-operative banks. The delay in allocating the funds is the hurdle in the process,” said Joy Abraham, vice-president, RubberMark (Kerala State Co-operative Rubber Marketing Federation Ltd).
So far, the procurement process has been done by the societies by using their own funds. Once the funds are granted by the consortium, the process will be in full swing, he pointed out.
“As per the current arrangement, two agencies are responsible for the procurement- RubberMark and Marketfed. Of which, only RubberMark has any previous experience with the procurement of rubber. It is done through a decentralised process with the help of various member societies. Some of them have started the process like the Meenachil Rubber Marketing Society,” he added.
Procurement is done from only those producers who have registered with the Rubber Board. According to Marketfed (The Kerala State marketing Federation Ltd) MD Tomin J Thachankary, only 70 per cent of the nearly 10 lakh rubber farmers in the state have registered with the Rubber Board. More than 80 per cent of the small-scale producers are yet to register with the Rubber Board. The higher procurement price will be given to only those who have submitted the registration certificate.
The announcement was made when the price dropped to `142. The decision was to procure rubber directly from the producers via taluk-based rubber marketing societies. The government agencies have procured only 200 kg of rubber in the first week.
As much as three lakh tonnes of rubber have been imported so far this year. Nearly 80 per cent of the imported rubber belongs to the cheapest SMR 20 block. This has catalysed the price drop. Meanwhile, the production cost still remained the same.
The rubber growers point out the failure in defining clear-cut criteria in the scheme as the reason for the lack of success. They also call for restricting the imports along with hiking the import duty.
Source: TheNew Indian Express
Published: 24 Mar 2014