Kochi: Rubber growers, riding a rebound in prices and exports, are demanding higher subsidies for replanting their farms.
Production, which had been declining because of high labour costs and illnesses to tappers last year, has jumped 30.6% from a year ago to 239,000 tonnes in April-July, according to the Rubber Board, a government trade promotion body.
Rubber prices have increased to Rs138-140 per kg from Rs120 in June, and exports in April-July doubled to nearly 24,000 tonnes from 12,495 tonnes a year ago.
Replantation is necessary because the yield of rubber trees starts diminishing after 30 years. But a new tree can be tapped only after seven years, making farmers reluctant to replant their farms during a boom.
The Union government had, in March, announced a 20% subsidy for rubber replantation as part of a Rs241 crore programme in the 11th Plan ending 2012.
“The high price is likely to keep the small and marginal farmers from going in for replantation since cutting down the trees and planting new ones will mean a loss of revenue for five-six years,” said Sajen Peter, chairman of the Rubber Board, which plans to request the Union government to raise the subsidy to 30%.
“A higher subsidy can be reason enough for small and marginal rubber farmers to go in for replantation, which will ultimately ensure better yield,” Peter added.
The estimated replantation cost in traditional rubber growing areas is Rs1 lakh per ha, and Rs80,000 per ha in non-traditional areas. The board expects to cover 33,000ha for replanting during the 11th Plan period.
Also, domestic rubber prices started climbing above international rates on 23 July. The current difference in price is Rs5-7 per kg, leading to demands for duty-free import of the commodity.
Tyre makers, who consume nearly 55% of the natural rubber produced in the country every year, have placed a demand for 100,000 tonnes of duty-free import of rubber.
“This can be over a period of one year,” said Rajiv Budhiraja, director-general of the Automotive Tyre Manufacturers’ Association. “It will help resolve the domestic supply-demand position and ensure smooth flow of raw material.”
But on an average, domestic prices exceed international ones for only 45 days a year, said Rubber Board’s Peter.
The rise in domestic prices is a temporary phenomenon, said N. Radhakrishnan, president of the Cochin Rubber Merchants Association.