India: Draft rubber policy seeks to push exports, protect livelihoods

The Centre has floated a draft national rubber policy proposing livelihood protection for marginal growers through insurance and price support, introduction of auctions for rubber trading and provision of special allocation for new plantations and replanting of rubber.

The policy also suggests setting up an independent rubber products export promotion council for tyres and general rubber goods, exploring the possibility of treating rubber as an agricultural product and focussing on research and skilling in the sector.

“The price volatility in rubber crop directly impacts the livelihood of small and marginal growers involved in the sector. Efforts will be made to ensure the livelihood protection of rubber growers by way of insurance and price support in consonance with the prevailing norms and policies,” the draft circulated by the Commerce & Industry Ministry proposed.

The draft recognised the need to balance the interests of rubber growers who suffer due to falling prices in the domestic market because of indiscriminate imports and that of the user industry which wants adequate supply of rubber at reasonable prices but could not arrive at a definite solution.

No unwarranted imports

“Recognising the sensitiveness of natural rubber import in terms of its impact on domestic prices and raw material supply for end user industries import policy on natural rubber should accord protection to rubber growers against unwarranted imports adversely influencing domestic prices and at the same time ensure availability of the raw material for consumers at affordable prices,” the draft policy suggested.

The possibility of treating natural rubber as an agricultural product for all practical and legal purposes could be explored, the draft noted. “The policy will also explore the possibility of treating income from rubber production as agricultural income, in consultation with the Ministry of Agriculture and Farmers’ Welfare,” it said.

To help the small-scale producers of rubber items, the rubber products export promotion council proposed in the draft would also handhold manufacturers belonging to the MSME sector. Export-oriented clusters would be identified and specific strategies would be framed for a focussed export boost, it said.

Budgetary support from the Central government in the rubber sector would focus of special allocations for new plantations and replanting of rubber, the draft said.

Appropriate convergence and dovetailing of funds with other programmes of departments/ministries of the Central and State Governments such as Mahatma Gandhi National Rural Employment (MGNREGA), Tribal Affairs and Departmentt of North Eastern Region, would be attempted, it said. The draft observed that futures trading was a competitive tool of marketing and regulated futures trading could contribute to price discovery and facilitate hedging to reduce risk. “Introducing auction for rubber trading in the country would be attempted for fair price discovery,” it said.