Natural Rubber

  • IASbaba
  • September 15, 2022
  • 0
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Context: Recently, under the aegis of the National Consortium of Regional Federations of Rubber Producer Societies India, an umbrella organisation for rubber growers, a day-long sit-in protest was staged in front of the Rubber Board headquarters in Kottayam, Kerala.

  • After a moderate post-pandemic revival, the price of natural rubber (NR) has crashed to a 16-month low of ₹150 per kg (RSS grade 4) in the Indian market.

What has caused the sharp fall in prices?

  • The current fall in prices is attributed primarily to a weak Chinese demand and the European energy crisis, along with high inflation and an import glut, among other things.
  • China, which consumes about 42% of the global volume is sitting pretty on an ample inventory, especially in the form of block rubber from the Ivory Coast and compounded rubber from the Far East for their domestic tyre industry.

Where does India stand in terms of the production and consumption of natural rubber?

  • India is currently the world’s fifth largest producer of natural rubber while it also remains the second biggest consumer of the material globally. (About 40% of India’s total natural rubber consumption is currently met through imports).
  • On the demand side, the domestic consumption rose by 12.9%, to 12,38,000 tonnes in 2021-22 from 10,96,410 tonnes in the previous year.

How does the falling price affect the growers?

  • The turnaround has exposed the growers — mostly small and medium scale — to a painful reckoning, contributing to wide-spread panic in Kerala, which accounts for nearly 75% of the total production.
  • The impact of the price fall is felt more in the rural areas, where most people are solely dependent on rubber cultivation and have no other option but to cut expenses.
  • If a reversal in prices seem distant, the trend may also trigger a crop switch or even a fragmentation of the rubber holdings in the long run.

What do the farmers demand?

  • The key demands they have raised to the Union government include raising the import duties on latex products and compound rubber to make it on par with natural rubber, by either 25% or ₹30 per kg, whichever is lower.
  • Its demands to the state government are to raise the replanting subsidy in Kerala, which remains at ₹25,000 per ha, and the support price of the crop under the price stabilisation scheme to ₹200 from ₹170.

How is the Rubber Board reacting?

  • The Rubber Board professes to be relatively sanguine as it regards the price fluctuation as cyclical and rests its hopes on the projections of a remarkable shortage of rubber seven years from now.
  • The agency, for the time being, is said to be also working on a set of programmes to arrest the free-falling of prices.

About Rubber Board:

  • The Rubber Board is a statutory organization constituted under Section (4) of the Rubber Act, 1947 and functions under the administrative control of Ministry of Commerce and Industry.
  • The Board is headed by a chairman appointed by the Central Government and has 28 members representing various interests of natural rubber industry.
  • The Board’s headquarters is located at Kottayam in Kerala.
  • The Board is responsible for the development of the rubber industry in the country by way of assisting and encouraging research, development, extension, and training activities related to rubber.
  • It also maintains statistical data of rubber, takes steps to promote marketing of rubber and undertake labour welfare activities.
  • The activities of the Board are exercised through Five Departments General Services, Extension & Advisory Services, Research Services (rubber Research Institute of India), Training (Rubber Training Institute) & Finance.
    • There are 5 independent divisions viz., Internal audit, Planning, Market Promotion, Publicity & Public Relations, Vigilance.

Source:  The Hindu

Previous Year Question

Q.1) With reference to the “Tea Board” in India, consider the following statements:

  1. The Tea Board is a statutory body.
  2. It is a regulatory body attached to the Ministry of Agriculture and Farmers Welfare.
  3. The Tea Board’s Head Office is situated in Bengaluru.
  4. The Board has overseas offices at Dubai and Moscow.

Which of the statements given above are correct? (2022)

  1. 1 and 3
  2. 2 and 4
  3. 3 and 4
  4. 1 and 4


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