Kochi: Tyre inc for relief plan to rubber farmers

Kochi: The tyre industry in the country is not averse to the idea of the government introducing a targeted relief scheme for rubber farmers. Speaking to this newspaper on the sidelines of the India Rubber Summit, Rajeev Budhiraja, director general, Automotive Tyre Manufacturers Association, said the import duty levied by the government for rubber should be used for providing relief to the rubber farmers.

On an average the government collects Rs 3,500 crore as import duty from natural rubber and a portion of the same could be used for farmer's relief, he said, and added that the beneficiaries could be identified by using an Aadhaar-based system of disbursal. Mr. Budhiraja, however, declined to make a commitment on the demand from growers that the industry should buy rubber from domestic farmers instead of paying Rs 30 as import duty. 

Nearly 80 percent of natural rubber imported to the country is after paying an import of 25 percent or Rs 30 whichever is lower, representatives of farmers said. Instead of paying Rs 30 as import duty, the industry should procure the commodity from local market by paying that amount to the farmers, said George Valy, a Kottayam-based rubber farmer and rubber dealer.  The famers are not tapping rubber due to the low price prevailing in the market, he said.According to Mr. Budhiraja such a scheme existed few years ago and the industry is not planning to take the initiative for reintroducing such a system. Rubber growers blame import of natural rubber as one of the prime reasons for the low price of the commodity in the country. According to the provisional estimate of the Rubber Board the natural rubber import to the country was 469,760 tonnes compared with 214,433 tonnes in 2011-12. The average price of natural rubber came down to Rs 129 for the benchmark RSS-4 grade from Rs 208 in same period.