Citing the ‘falling prices of natural rubber,’ the government plans to hike the import duty on rubber to 25 per cent and undertake a slew of other measures to protect the interest of rubber growers, Commerce and Industry Minister Nirmala Sitharaman said on Thursday.While replying to a call attention motion on the plight of rubber farmers in the Rajya Sabha, Sitharaman said that a methodology was also being evolved to monitor the usage of imported rubber to push domestic demand while an expert committee was examining the concerned issues in-depth.
The plan to hike ‘the existing import duty on dry forms of natural rubber from the existing 20 per cent or Rs 30 per kg to bound-level duty of 25 per cent, has been forwarded with my recommendation tothe Ministry of Finance and is under consideration,” the Minister said.
These measures, she said, would regulate imports and ‘may have a salutary effect on domestic prices,’ as she promised an enhanced subsidy to growers of Rs 35,000 per hectare by the Rubber Board, up from the existing Rs 25,000.“The concern among rubber growers caused by the downward movement in domestic prices of rubber has been noted. The government has reduced the period of utilization under advanced licensing scheme for import of rubber from 18 months to six months,” Sitharaman said.
While motivating rubber consumers to exhaust stocks and push up demand, the government was also working to evolve methods to monitor usage of rubber imported under advance licence to ensure that existing stocks are consumed, she said. Sitharaman said the fall in rubber prices to Rs 118 in November from Rs 176 in 2012-13 was due to ‘slump in international consumption’ and the resultant decline in global prices. This was aggravated by a relatively low growth in domestic demand for specific forms of natural rubber. To boost the segment, she said, the government intended to expand production as a long-term strategy and was promoting plantation development programmes in non-traditional regions like the North East.
“Currently, rubber is produced in 7.57 lakh hectares in the country,” she said adding, ‘during the 12th Plan, an area of 36,300 hectares is proposed to be covered under fresh rubber plantation for which an outlay of Rs 726.99 crore has been provided.” The Commerce Department has also initiated the process of evolving a market-linked insurance based scheme to stabilize prices, Sitharaman said. She said a draft scheme has been formulated, which would require the approval of the Ministry of Finance and the Cabinet Committee on Economic Affairs.
The scheme would be administered by the commodity boards through insurance companies and would receive support from the government through premium subsidy. Besides, an experts committee, comprising representatives of rubber growers, state governments, rubber consumers, user industries and other stakeholders, was examining all issues concerning production, development, consumption and exports.
The New Indian Express
