Indian farmers take action over fall in rubber prices

ERJ staff report (TP)

Kottayam, India – A dawn-to-dusk ‘hartal’ (strike action) took place on 30 October in Kottayam (Kerala state) as farmers protested over the fall in the price of rubber.

The action was supported by the Left Democratic Front − a coalition of left leaning political parties in the state of Kerala.

Over the past few months the decline in the price of rubber has caused consternation among farmers and dealers in the district. The unrestricted imports of rubber, adverse weather conditions and shortage of workers have all contributed to the price decrease.

The price of natural rubber in Kottayam was as high as Rs 248 (€2.95) per kg in April 2011, but on 28 October this year it was reported at Rs 159 (€1.88) per kg.

Because the Lok Sabha (lower house of the Parliament of India) polls are imminent, the political parties have raised the issue of rubber prices. Not everyone is in favour of the farmers’ protest. Pius Scaria Pottamkulam, former president of the Rubber Dealers Association, believes the strike action is ineffective.

“The file regarding increasing the import duty of rubber is lying unattended in the Union Finance Ministry for the last eight months. Our leaders should try to pressurise the Finance Ministry,” he said.

The Union Commerce Ministry had reacted to the price concerns before. On 26 February the ministry changed the cap of import duty on rubber from Rs 20 (€0.24) per kg to 20% of the price of rubber in the Indian market. That move was welcomed by rubber farmers at the time.

The ministry’s decision in February was based on a report by a panel appointed by the Department of Commerce under the direction of the Delhi high court in 2010. As a result of that decision, import duty will be 20% of the average price of rubber (RSS4) in Kottayam over the last three financial years.

Based on this data the import duty for a kilogram of imported rubber in 2013 will be Rs 34 (€0.40) instead of Rs 20 (€0.24).

"From March to September this year 1,690,921 metric tonnes of rubber has been imported with a duty of just Rs 20 (€0.24) per kg. This period also happened to be a time when the rupee faced a slump in the international market. The country has suffered a heavy loss.”” said Pottankulam.

PJ Sebastian, a farmer in Mattakkara (part of Kottayam district) said dealers are reluctant to buy and stock rubber as the price is falling every day.

"If the situation continues we will be force to end rubber plantation," Sebastian warned.

It is not only the farmers who have protested. On 28 September the dealers observed a one-day strike demanding an increase in import duty.

In support of the strike action, Kerala Congress (M) chairman and finance minister KM Mani told Parliament and Assembly party members and leaders of the farmer's union of the party that they will stage a ‘dharna’ (compelling payment by sitting at the debtor's door until the demand is complied with) in Delhi on 15 November.