The government should draw up an alternative strategy to ensure sustainable growth in the rubber industry by establishing a downstream industry instead of relying solely on exports, which has caused farmers to suffer from price swings and manipulation, a seminar heard recently.
The seminar organised by Nation TV brought together Amnuay Patise, deputy agriculture minister; Uthai Sonlaksab, chairman of the Rubber Council of Thailand; Sangwin Tuadhoi, chairman of the Rubber Farmers Network and other key representatives from rubber farmers and industry.
Although tappers were satisfied with the government’s measures to shore up the rubber price, with rib smoked sheet quoted at Bt60 per kilogram and latex at Bt37-Bt38, they urged the government not to fix the rubber price at Bt60.
Amnuay said the government aimed to push up the rubber price, not to keep it at any particular level.
Suthichai Yoon, the seminar host, said that although Thailand was the world’s largest rubber exporter, the rubber industry lacked a strategy, strength and cohesion. It could not leverage for bargaining power, unlike other commodities and industries such as sugar and sugarcane.
Since rubber is one commodity that is subject to price manipulation and speculation, prices do not reflect the real market mechanism of demand and supply but depend on manipulators, he said.
To ensure sustainable growth that helps farmers weather price fluctuations, the industry needs to strengthen the upstream, midstream and downstream parts of the supply chain. That would ensure farmers get stronger bargaining power.
Uthai said the rubber industry consists of many farmer groups and organisations but they do not go in the same direction because each group has different supporters who have different objectives.
Tossapol Kwanrod, a representative of rubber farmers, supported the proposal for the government to establish a downstream industry such as using rubber to build roads. Local administrative organisations in 14 southern provinces were ready to implement the project.
“What we are waiting for is the announcement from the government to make a commitment toward this development direction. And it’s not just roads, we can use rubber to make boots, hats and many other products,” he said.
Uthai said the government had not started the rubber road construction project because of information discrepancy. State agencies were asked to provide an estimate of how much rubber was needed to build one kilometre of road. The Highways Department, for example, reported 700 kilograms while the Rubber Institute claimed 3.5 tonnes.
When Wan Muhammad Noor Matha was the transport minister, a rubber road was built and though many years had passed, the road was still in good condition.
“It’s as if this industry is haunted by a ghost. I wonder why there is such a big discrepancy in the figures. Maybe we should not just look at the figure but the real rubber road that had been built,” he said.
Chetta Meemankong, from Thai Hua Rubber Plc, director of the Research and Development Institute, said Thailand had established upstream and midstream rubber industries but lacked a downstream industry. “Although we are the largest rubber exporter, we do not have any universities that specialise and educate students who can help develop the rubber industry in terms of commerce and downstream industries.
“China is not a large exporter but it has universities dedicated to rubber that teach students rubber production to high technology such as producing plane tyres. We do not have this.
‘Use rubber on dual rail tracks’
“We are planning to build dual rail tracks and we can use rubber to support the train track instead of cement,” he said.
Uthai urged rubber farmers to get together and start small-scale industries making chairs, stools and household utensils from rubber. The government could play a supporting role by finding markets for these products or disseminating knowledge to establish the industry, he said.
Amnuay said with the legislation of a national rubber bill, which is being drafted by the National Reform Council, the rubber industry could move in one direction and with a strategy.
Uthai put high hopes on the National Legislative Assembly passing the bill, saying that once an elected government is installed, it would be harder for the bill to get enacted because of opposition parties.