NEW DELHI: Agricultural commodity prices have been roiling the world’s producer countries across Latin America, Africa and Asia. In just the past one year, wheat has declined by 22 per cent, rice by 17 per cent, soybeans by eight per cent, palm oil by 21 per cent, sugar by 12 per cent, coffee by 27 per cent and rubber by 20 per cent, according to IMF commodity prices data. A slice of this crisis is visible in India too – with rubber farmers mostly in Kerala but also in the North-East and some other states.
Prakasan Mastar is in despair. He runs a two acre rubber plantation in Kannur district, Kerala. Till a few years ago, his 30-year old plantation was a good source of income. He got Rs.248 for every kilogram of raw rubber produced. But this year the price he is getting is just Rs.95-98 per kg.
“I spend about Rs.160 to get a kilo of raw rubber. How can I sell it for Rs.98?” he asks.
This is the plight of nearly 8.5 lakh rubber farmers in India, mostly concentrated in Kerala but also in Karnataka, Tripura and Tamil Nadu. International rubber prices have crashed, synthetic rubber is slowly taking over, and price support mechanisms promised to these small farmers have not been put in place.
Mastar and several hundred rubber farmers have travelled to Delhi to hold a dharna and demand attention from the government. They have formed a small and medium farmers’ association, affiliated to the All India Kisan Sabha.
According to a study done by the Sabha, 93 percent of India’s rubber production is taking place in small plantations of less than 2 hectare size. So the price crash has caused complete ruin with several farmers abandoning their trees and all of them taking up other low paying jobs to earn a living.
“I spent about Rs.1 lakh per year to just maintain my trees. But in return I earn Rs.22,000,” said Haridas Bhat from South Kannada district in Karnataka, explaining the crisis. He has about 1000 trees planted on a one-hectare plot.
Experts say that the slow down in the Chinese economy coupled with overall sluggish economic growth in most of the advanced countries has affected the primary commodities markets leading to the crisis that Mastar and Bhat are facing.
But Krishna Prasad, a Kisan Sabha leader points to a bizarre fact. Rubber is an industrial commodity, mainly used in making automobile and cycle tire/tubes. So, crashing prices should have brought down the prices of these goods. But that has not happened.
“The profits of all the major tire manufacturers in India have shown three digit growth for the first quarter of financial year 2016, compared to the first quarter of FY 2015. This is despite the slowdown in the automobile sector,” he says.
“The tire industry has made super profits buying rubber cheap from farmers and selling tires at high prices,” he claimed.
The rubber farmers want restrictions on import of synthetic rubber, minimum support price of Rs 240 for their produce, a price stabilization fund – and government’s help in setting up rubber processing industries owned by farmers’ cooperatives.
