‘Insurance scheme will shield rubber growers from price risks’

The Centre’s proposed insurance scheme for the plantation sector will protect small-scale rubber growers from price fluctuations, a senior official said today.

“The main shield used by developed countries in protecting their farmers against price risks is comprehensive crop insurance schemes,” Rajani Ranjan Rashmi, additional secretary, Ministry of Commerce and Industry, said at the ‘India Rubber Meet 2016’ here.Banner-280120“Government of India is also in the process of launching an insurance scheme for plantation sector including rubber which would cover price fluctuations among other perils, with the premium shared by Central government, state governments and the beneficiaries,” he said.

During 1998 to 2001, when the sector hit a slump, the Centre had taken several measures to restrict imports, Rashmi said.

“But we have to be aware of one major difference in rubber situation between 1998-2001 and the present. During the earlier period, rubber prices were low and there was no issue of availability in the domestic market. Currently, rubber prices are low but there is considerable shortage in the domestic market,” he said.

The government nevertheless made several policy revisions to protect rubber growers, such as increase in the import duty on dry forms of natural rubber to the maximum level of 25 per cent, reduction of export obligation period, port restrictions in import and temporary suspension of import under Advance Authorisation, he said.

The rubber industry value chain in India annually produces items worth around Rs 85,000 crore, with exports above Rs 18,000 crore, he added.

Speaking on the occasion, Rubber Board Chairman A Jayathilak said volatility in prices is a big concern for the industry.

“The precarious situation of small and marginal rubber growers due to low and volatile rubber prices need special mention.

“Natural rubber prices have been cyclical over history … But the fall in rubber prices from 2012 onwards has been sharper and the impact on growers is deeper, which will have implications for future planting and availability,” he said.

Curated from ‘Insurance scheme will shield rubber growers from price risks’

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