Kerala government, tyre manufactures to rescue rubber farmers

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SME Times News Bureau | 19 Dec, 2014
To help rubber farmers in Kerala, top honchos of trye manufacturers agreed, after meetings with Kerala government representatives, to procure rubber at 25 percent higher price.

The prices will go up from Friday. Rubber prices had been falling for some time and for the first time in years went below Rs. 100 per kilo, forcing the state government to call a meeting with the tyre manufacturers.

In the morning, the top Kerala government officials met the manufacturers. At a meeting with Chief Minister Oommen Chandy and his cabinet colleagues, in the evening the manufactures agreeed to hike the purchase price up by 25 percent.

Chandy addressing the meeting said that the Kerala economy has been shattered with the rubber prices falling so low. "Rubber is one single plantation crop that has over the years helped build the rural economy of Kerala. Today the situation is such that the price of natural rubber has fallen below the cost of production, forcing many farmers to either stop tapping the rubber trees while some have started felling the rubber trees. People are loosing hope," said Chandy.

Kerala has 90 percent of the rubber plantations in the country spread over 6.5 lakh hectares engaging 1.1 million farmers.

State Finance Minister K.M.Mani said: "When the rubber prices were high in 2009 we helped you (tyre manufacturers) by taking up your case with the central government and got reduced the import duty from 20 percent to 7.5 percent.

"Now it's your turn to help us. Today you are importing more than 3.2 lakh tonnes of natural rubber. So when we are facing trouble you should help us," said Mani. Raghupati Singhania of JK Tyres, who led the tyre manufacturers said that today the domestic price of natural rubber is 20 percent higher than the international prices.

"We do have to import rubber for making high quality truck tyres. Also the consumption of rubber is more than the domestic production. However, we have agreed to help the farmers here," said Singhania.

The tyre manufacturers have agreed to procure rubber at 25 percent higher rate than the daily prevailing price at the Bangkok rubber market. The arrangement beginning Friday will continue till the end of this fiscal.

"Since rubber today has a 20 percent import duty, the tyre manufacturers would give that to our farmers and the state government will also chip in to the extent of five percent which will be reimbursed in two equal instalments to the manufacturers. So the prices would go up by 25 percent starting tomorrow," said Chandy.

Chandy also said that the Kerala government will now approach the centre to see that maximum subsidy is given for re-plantation so as to help the farmers.