LOST IN PLANTATION
Millions of growers and workers are in distress in Kerala, the plantation capital of India, as domestic and international prices of cash crops crash. The crisis exposes the peculiar nature of Kerala's economy. With two-thirds of its cultivated area dedica
I when almost all other crops were N 2005, in severe crisis, driving farmers to commit suicide in Kerala, rubber growers in the state were counting profits. They were witnessing a price boom after six years of distress. The price of the most preferred and traded variety in India called ribbed, smoked rubber sheet (rss-4 grade) jumped from ` 39 a kilogram in 2003 to
` 66 in 2005.The growers did not expect the price to stay high for long. However, it not only stayed but started galloping, touching ` 240 in April 2011.It was an unprecedented peak in the history of rubber.
“I had never thought I would be able to get such a high price for rubber in my life,” says 44-year-old Robin Augustine, a resident of Kadanad village in the Pala region of Kottayam district. Kottayam and some of the neighbouring areas in southern Kerala, known as Central Travancore, constitute the most fertile rubber belt in the country. Augustine’s family has been growing rubber for three generations. “During the boom, I used to get a profit of ` 2-3 lakh a year,” says Augustine, who has two hectares (ha) of plantation.
Business in the Kottayam market, the biggest rubber trading centre in the country, was thriving. A spending spree was evident in Kottayam.New houses, luxury apartments, big shops, hotels and resorts mushroomed. Costly cars hit the road. Children were sent to expensive boarding schools. Land transactions went up even as land value skyrocketed.
Then came the crash. Since 2012 rubber prices started spiralling downwards.On December 18,2014, the price of natural rubber (rss-4 grade) in the Kottayam market was ` 113,a five-year low (see ‘Rise and fall of rubber rate’ on p34). The global price of rubber (rss-3 grade) at the Bangkok market stood at even lower, ` 95.
Today, a cloud of uncertainty envelops Kottayam and other rubber-growing areas. A number of dealers have shut shop. Many small units making rubberbased products have closed down. “The cost of producing one kilogram of dry rubber comes to
` 150-160.It is not profitable to produce rubber when price goes below this level,” says Binny Mathew, president of a rubber producers’ society in Kadanad, which has 300 small growers as its members.
Small growers and farm labourers, who constitute a large segment of the state’s plantation workforce, are the hardest hit by the downturn. Just like Augustine there are over one million rubber growers in Kerala, the country’s rubber capital. Barring about 320 large growers with more than 10 ha of plantations, all others are small cultivators with a landholding less than 0.55 ha, as per official data. These plantations employ about half a million skilled labourers for tapping the milky fluid, called latex, and processing it into rubber sheets.
During the boom, the cost of everything from inputs to labourers went up, says Mathew. Tappers, who extract latex, were paid ` 26 for tapping 100 trees in 1999.Now they charge ` 150-200 in Kottayam.To tap a tree in monsoon, rain guards are fixed on its bark to prevent water drops from falling into the coconut shell in which latex collects. This costs about ` 50 a tree. “I sent away all the four tappers I had for 25 years when rubber price fell below ` 150 in January last year,” says Kurien Verghese, a rubber producer with 6.8 ha in Thodupuzha in the high ranges of Idukki district.In many places rubber trees are left untapped. Nor is there any enthusiasm for replanting aged plantations whose productivity has declined. Verghese
After rubber price slumped in 2012, a cloud of uncertainty has enveloped Kottayam and other rubber-growing areas of Kerala. "For Sale" boards have appeared in front of some farms in the land-starved state
says he was wise enough to invest in other businesses but a majority of rubber growers in his village are marginal farmers, who, he says, are in deep distress.
While small growers are in panic, big producers watch the price trend in anxiety. “Rubber tree is a perennial crop with a reproductive period of 30 years,” points out Mathew Mathew K, physician and planter at Kanjirappuzha in Palakkad district. “Investing in rubber is just like investing in a 30-year business. If it is an annual crop you can switch over to something else. But in the case of rubber it is not possible,” he says. Small wonder, “For Sale” boards have appeared in front of some rubber farms in the land-starved state.