Efforts towards a sustainable Rubber Value Chain

Each stakeholder is an interest group and equitable value distribution is a myth.
Efforts towards a sustainable Rubber Value Chain

KOCHI: Each stakeholder is an interest group and equitable value distribution is a myth. The cultivation of 'Natural Rubber (NR)' is 6 lakh hectares in south India and about 2 lakh hectares outside south India, particularly the Noth East. , where the government has been popularising cultivation as a socio-economic measure particularly to the benefit of insurgency-ridden areas. The value of NR production is about 9000 crores. 

Ecosystem
As with food and beverages even in industrial products, transparency in sourcing has become increasingly important. The tenets of this sustainability framework compromises of good agricultural practices, biodiversity management, employee welfare, the livelihood of communities, product safety and safety at the workplace. 

Natural Rubber planting as part of reforestation of degraded land should be rewarded. The superiority of rubberised bitumen in providing long lasting road surfaces has been well established. These greening benefits have the potential to earn credits in the Clean Development Mechanism and needs to be institutionalised. 

Imbalances 
A sustainable value chain must ensure the cost of production of each link should be covered. The absence of this will cause supply imbalance because of reduced inputs in production and in extreme situations production abandonment. The recent clamour for import of raw cup lump needs to be condemned totally, because of the huge phytosanitary issues this would pose, apart from the colossal downward impact on domestic RSS-4 prices.

Role of productivity 
There should not be any impediments to the regular cycle of angle replanting which enables opportunities to upgrade the plant material to high yielding clones. The facilitation of rubber tree felling and removal of the seigniorage imposed on rubber trees are two positive steps taken by the government of Kerala in recent times.
 There are varying responses to Government of Kerala ‘s price support scheme for small farmers - the lack of resurgence in production does not portray well, the benefits of this scheme. Wage cost at 65% of the cost of production remains a challenge in containing the cost of production. 
Mechanisation in rubber tapping is long overdue- this needs to be put on the accelerated mode in terms of Research and Development. The emerging shortage of manpower should be seen as an opportunity to mechanise and reduce costs rather than as a threat. 
Meantime Number rationalisation through the introduction of low-frequency tapping is the way to go. It’s heartening that the Rubber Board is also actively supporting this initiative. This is an agronomic challenge but must be addressed positively and with conviction.

Strengthen the weak links 
Producers continue to be underdogs in the value chain - high manpower dependency, ever-escalating (and unavoidable ) wage cost increase, long cycle times and the inability to pass on costs up to the value chain (being far removed from the end consumer, admittedly earns him this unenviable status.
 Forward integration is often recommended as a panacea for value improvement. Do the growers have the financial muscle to do so? Almost invariably no and the route could be through collaborative efforts. Aggregation of grower interests through the formation of Rubber Farmer Produce companies need a serious look.

Role of the Regulator
Understanding the strengths and pain areas, contributions and impacts of each of the stakeholder holistically is a challenge for the government in its role as regulator. Adoption of a balanced scorecard for arriving at policy formulation based on the above and balancing intervention measures is the need of the hour for ensuring a sustainable Natural Rubber Value Chain - knee-jerk reactions are best avoided.

N Dharmaraj is a Director in Harrisons Malayalam Ltd and a former President of UPASI. (The views expressed by the author are his own)

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