Kerala’s Rubber Price Stabilisation Fund Safeguards Farmers While Union Govt Rejects Demand for MSP

The government of Kerala has allocated Rs 23.45 crores towards the disbursal of dues from the last fiscal for the price stabilisation fund for rubber farmers. The difference between the price fixed by the government at Rs 170 per kg of produce and the market price will be credited to the bank accounts of around 1.47 lakh rubber farmers.

The Left Democratic Front (LDF) government has earmarked Rs 600 crore in the 2023-24 budget towards the Rubber Price Stabilisation Fund (RPSF), an increase of Rs 100 crore from the previous budget.

Since 2014, the government has paid a total of Rs 1,807 crores to rubber farmers for price stabilisation.

Elamaram Kareem, Rajya Sabha MP of the Communist Party of India (Marxist) [CPI(M)], led a delegation of Left MPs and met the Union Minister for Commerce and Industry seeking the intervention of the Union government in protecting the rubber farmers.

However, the Union government has refused to fix a minimum support price (MSP) for rubber and is reluctant to further restrict natural rubber imports.

INTERVENTION OF STATE GOVT

The rubber stabilisation fund was first announced in 2014 following the falling prices of natural rubber after the ASEAN-India Trade in Goods Agreement (AITIGA) was signed. The price of one kilogram of rubber had fallen from Rs 245 to Rs 77. The government fixed the price as Rs 130 per kg, which has now been increased to Rs 170 per kg in 2021.

The distribution of Rs 23.45 crores began as part of dues to the farmers from the RPSF for the financial year 2022-23. Earlier, the government had transferred Rs 33.19 crores to rubber farmers.

The farmers will receive their share from the RPSF following the approval from rubber producer societies and certification from the Rubber Board. The rubber farmers continue to demand an increase in the price fixed by the state government as Rs 250 per kg.

The Kerala Rubber Limited (KRL), inaugurated in May 2022 by the state government, has focused on non-tyre products considering the high imports of non-tyre products.

NO MSP FOR RUBBER

Considering the continuous demands raised by the rubber farmers, a delegation of CPI(M) MPs met Union minister Piyush Goel and submitted a memorandum seeking his urgent intervention on February 8, 2023.

In response to Kareem on March 15, Goel informed that “the import duty on dry rubber was increased in 2015 to regulate the import of dry rubber.”

The import duty on compound rubber was increased in the 2023-24 Union budget, which received a mixed response. But the demands on ensuring MSP for rubber were rejected in the response, citing the government policy of not fixing prices for cash crops.

"Crops considered under MSP are generally major agricultural commodities which are widely grown and have large area under cultivation are items of mass consumption with fairly long shelf life or/and necessary for food security,” the minister's response mentioned.

The minister further added that the government is committed to the welfare and sustainable development of the rubber industry.

The rubber farmers in Kerala, affiliated to the All India Kisan Sabha (AIKS), have been demanding MSP for rubber considering the amount of area under cultivation and the number of farmers depending directly and indirectly on rubber farming.

"Union government abandons rubber farmers,” a CPI(M) Kerala state committee statement said, pointing to the Union minister's response rejecting the demands for MSP and increase of import duty.