Chief Minister Pinarayi Vijayan on Sunday made a call for concerted efforts to exert pressure on the Union government to correct its existing policies which have plunged the rubber sector into a deep crisis.
Addressing mediapersons at Pathanamthitta, on the sidelines of the Navakerala Sadas, a public outreach programme by the Left Democratic Front (LDF) government, he said that the Centre has not been paying the subsidy for rubber farmers for the past several months.
He said that the Union government has also not considered increasing the import duty to restrict the import of natural rubber, citing global trade agreements. The Centre is also not ready to consider rubber as an agricultural product, and continues to treat it as an industrial raw material.
The Chief Minister accused the Centre of keeping rubber prices low for the benefit of the country’s tyre manufacturing monopolies, which are reaping profits even when the rubber farmers are in financial crisis. For instance, the aggregate value of a major tyre manufacturing company from Kerala has quadrupled in ten years. In 2011, the price of rubber was around ₹230 per kg, but in June this year, it fetched only ₹120, he said.
Mr. Vijayan said that Competition Commission of India (CCI) has found that tyre companies are engaging in corrupt practices that push the rubber farmers into further crisis.
The CCI found that major tyre companies and their corporate lobbying company, the Automotive Tyre Manufacturers Association, formed a cartel, shared information and fixed tyre prices in violation of competition law. Even as the total price of all raw materials, including natural rubber, the main raw material for making tyres, has fallen, tyre companies have colluded to maintain inflated tyre prices.
The CCI has imposed a huge fine of ₹1788 crore on the companies that cheated the consumers. But the Union government is hesitant to collect this fine.
The Union government has introduced an anti-farmer Rubber Promotion and Development Bill in Parliament earlier this year, repealing the Rubber Act of 1947. If it becomes law, the Central government will be able to fix the price of rubber without considering the recommendation of the Rubber Board.
A petition submitted earlier this year by the Left MPs demanding the intervention of the Union government to resolve the crisis in the rubber sector received a negative response. The State government has been taking several policy measures to offset the impact of the larger crisis in the sector, he said.
