Rubber planters stretched to breaking point on policy delay

Struggling rubber planters were eagerly waiting for a national policy to keep them going in the face of cheap imports and plunging prices, but things got worse for them last year when torrential rain devastated the potentially prosperous estates.

The combination of heavy flooding and absence of policy support has jolted the rubber-dependent local economy, leading to loan defaults, traders shutting shop, and shopkeepers suffering up to 50% drop in sales. Many people have started keeping cattle to sell milk, or are queuing up for the employment guarantee scheme.

Farmers say the national rubber policy has been in limbo for four years. It was supposed to restrict imports, offer a minimum support price and regard rubber as agricultural produce.


“Former commerce minister Nirmala Sitaraman had called Rubber Board committee to Delhi to announce it. But then she went back on her promise and said it is not possible to have a policy for rubber alone,’’ said P C Cyriac, national president of Indian Farmers Movement (Infam) and also the former chairman of the Rubber Board. He has also met commerce minister Suresh Prabhu but the policy has still not been announced.

Rubber yields have plummeted. “By Onam season, rubber trees began to lose leaves and the yield fell and since then we get a quarter of latex we used to get,” says 49-year old rubber tapper Sunny Chakkankal, who has never seen such a phenomenon before.

He used to tap 400 to 500 trees a day at Rs 2 for a tree, but he shares half his rubber income with the estate owner so that operation remain viable. Many others adopting the same payment system as over 90% of the rubber holdings are small. The yield fell from over 10 kg a day in September to 7.4 kg in October, says S Kumar, a small grower.

This is driving rubber traders out of business. “We used to ship 5 loads (ten tonnes each) of scrap rubber daily. It has fallen to half. It is no different with the traders dealing in sheet rubber,” says P J Mathachan, who runs Chollikara Trading Company.

Only four of the 10 rubber traders are operating now. “We are forced to remain open as we have to pay back the overdraft taken from the bank. Banks have stopped issuing loans to us.” Earlier Mathachan did a minimum business of Rs 10 crore a year and the banks would be happy to provide 25% of the turnover as loan.

Now, loan defaults are rising, says Mercy M Jose, branch manager of Kerala Gramin Bank that lends Rs 50,000 to Rs 1lakh to customers. “They are not doing it wilfully but they have no money to pay back.” She says it was zero-NPA branch till 2014 but in recent years NPAs have grown with rubber prices remaining low.

Companies lending against gold find customers not responding when they make call after defaulting an instalment. “Earlier they used to make payment somehow after we contact them,” says the manager of a leading private gold finance company who did not want to be identified.

Sales at shops in Ramapuram has fallen by 20-50% as people are mainly buying essential items. “Our business has fallen by half. People seem to have postponed purchases” says PJ George proprietor of Vadayar general stores, one of the busiest shops in the place.

For the cloth shops it has been a double whammy. “Apart from the general recession, the dwindled flow devotees to Sabarimala this year has added to the misery. Earlier a family of devotees used to spend an average of Rs 2,500,’’ says Santhosh Kachiramattom owner of a textile shop.

A V Jayaprakash who runs a shop selling ayurveda medicines said earnings have fallen 30%.

Growers are trying to cut costs. “I have stopped applying manure and instead of making rubber sheets which require additional cost I am selling latex as cup lumps,” says Mukesh Krishnan, a coowner of a travel agency, who has 2 acres of rubber at tapping stage.

Ramapuram panchayat president Baiju John said there was a rush for jobs under Mahatma Gandhi national rural employment guarantee Act (MGNREGA). “Those who were reluctant to join the scheme are now rushing to do unskilled manual work as they have little income.”

Many are taking up dairy development. “The number of people rearing cattle has increased three-fold in the last few months,” John says. The panchayat has arranged for an incentive through dairy department for the amount of milk supplied to the state milk cooperative Milma. Even farming of tapioca which sells at Rs 20 per kg are finding more takers.