<b>XI LOK SABHA DEBATES, <i> Session IV (Budget) </i> </b> XI LOK SABHA DEBATES, Session IV (Budget) Tuesday, March 04, 1997 / Phalguna 13, 1918 (Saka)
Type of Debate: CALLING ATTENTION (RULE-197)
Title: Steep fall in the prices of natural rubber and other cash crops like Rubber, Tea, Cardamom in Kerala. TEXT : PROF. P.J. KURIEN (MAVELIKARA): Sir, I call the attention of the Minister of Commerce to the following matter of urgent public importance and request that he may make a statement thereon:-"Situation arising out of steep fall in the prices of natural rubber and other cash crops in Kerala and the steps taken by the Government in regard thereto."
THE MINISTER OF STATE OF THE MINISTRY OF COMMERCE (SHRI BOLLA BULLI RAMAIAH):
Sir, with your permission, I lay on the Table on the House a statement regarding the prices of coffee and other commercial crops like rubber, tea, cardamom.
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STATEMENT RE: PRICE OF COFFEE AND OTHER COMMERCIAL CROPS LIKE
RUBBER, TEA, CARDAMOM - LAID
THE MINISTER OF STATE OF THE MINISTRY OF COMMERCE (SHRI BOLLA BULLI RAMAIAH): Sir, In reply to the Calling Attention Notice given by some Hon'ble Members of the House, I am making the following statement.
Urgent attention of the Government has been called to the alleged steep fall in the prices of natural rubber and other cash crops in Kerala, I am giving below the price data and other details in respect of natural rubber, coffee, tea and cardamom in Kerala to show that there gas been no steep decline in prices. In the case of rubber, there has been levelling of price from the peak achieved in mid-1995. In the case of other three crops, there has been no decline.
Rubber
Domestic prices of Natural Rubber had witnessed considerable fluctuations in 1994-95 and the trend continued in 1995-96 also. From Rs. 2851/- per quintal (for RSS-4 Grade) in June, 1994 it climbed upto Rs. 6171/per quintal in June, 1995 which is the highest monthly average price ever reached. Thereafter, it came down to Rs. 4197 in September, 1995. Again it improved to Rs. 5500 in December, 1995. It gas shown a downward trend thereafter and in March, 1996, the price was Rs. 5007. It further came down to Rs. 4350 per quintal on 19.2.97. Compared to February 1993 price, which was Rs. 2562/quintal, the current price is Rs. 4300/quintal as on 20.2.1997. Compared to February 1994 price the current price is Rs. 1707/- higher per quintal. Hence it cannot be said that the current price is very low. On an examination of price levels during these months, it can not be construed that there has been a crash in price. Average monthly price of RSS-4 Grade for the last three-four months indicates that at present the domestic prices are favourable when compared to international prices for Natural Rubber. The domestic and international prices of rubber in November, 1996 were ruling at Rs. 4897 and Rs. 4467 respectively. On 19th February, 1997, the domestic price of natural rubber was Rs. 4350 per quintal as against the international price of Rs. 4332 per quintal.
The price of Natural Rubber could not have stayed at the extraordinary high levels touched about one and a half years ago in the lean season because there has been perceptible slowing in demand from some sections of rubber based industry and this is reflected in the price of natural rubber as rubber is an industrial raw material.
The bench-mark price of rubber was last declared on 22nd February, 1994, when standard cost of production for RSS-4 and RSS-5 was put at Rs. 2490 and Rs. 2440 per quintal respectively. As a few years have elapsed after this calculation was done cost of production gas undergone an increase. Even allowing for general increase in price levels, the present prices are higher than this benchmark price and therefore, not unremunerative to farmers. Besides, the recent decline in prices in partly due to seasonal arrivals of natural rubber.
Coffee
As regards coffee, there has not been any price crash in recent months. In fact, the prices of coffee have gone up during the month. The monthly average domestic wholesale prices of Arabica and Robusta Coffee, which were ruling at Rs. 104 per kg. and Rs. 68 per kg. respectively during July, 1996, have gone upto Rs. 129 per kg. and Rs. 71 per kg. respectively during February, 1997.
Cardamom
The average domestic price of small cardamom during 1994-95, 1995-96 and 1996-97 (August-January) has been Rs. 254.45 per kg, Rs. 207.27 per/kg and Rs. 410.02 per kg. respectively. The prices have shown an upward trend during 1996-97. The average domestic price of small cardamom in Kerala during the same period August, 1996-January, 1997 was Rs. 410.02 per kg. as against Rs. 184 per kg. during the period August, 1995 - January, 1996.
The prices of cardamom are determined by supply and demand factors. Production of small cardamom has increased to 7000 MTs during the crop year 1994-95 due to various measures adopted for enhancing productivity. the fall in prices in the case of cardamom witnessed during 1995-96 were mainly on account of the increased production and reduced exports due to stiff competition faced from Gautemala in the overseas market. However, the situation has substantially improved during 1996-97.
Tea
In so far as tea is concerned, there is no crash in prices of tea produced in the State of Kerala. On the contrary, prices of tea at Cochin auctions which were depressed on account of conditions that prevailed in the international market have increased recently. Average prices of tea during 1994 at Cochin auctions were Rs. 34.39/kg. This increased to Rs. 41.86/kg. during 1995 and for the year 1996 average prices of tea at Cochin were Rs.44.48/kg. During 1997, average prices of tea at Cochin Auctions have improved from Rs. 42.48/kg in the first auction of the year to Rs. 47.93/kg in February.
Sir, Government is keeping a close watch on the price situation and will do the needful in case it is required.
(ends)
PROF. P.J. KURIEN (MAVELIKARA): Sir, I have gone through the statement of the hon. Minister. But before that, I would like to thank the hon. Speaker and the Chair too for allowing this Calling Attention Motion on such an important matter which affects the large number of rubber growers as also the cash crop growers in the State of Kerala...(Interruptions) Can I proceed, Sir?
MR. CHAIRMAN (COL. RAO RAM SINGH): I suppose, you are seeking clarification on the statement laid on the Table of the House by the hon. Minister.
PROF. P.J. KURIEN (MAVELIKARA): Yes, Sir.
MR. CHAIRMAN: Please go ahead.
PROF. P.J. KURIEN (MAVELIKARA): The statement made by the hon. Minister is certainly very much disappointing. We have drawn his attention to the fact that the price of natural rubber, cardamom and other cash crops has fallen steeply. We are asking him as to what steps he would like to take to mitigate the grievances of the growers, specially in regard to giving them remunerative price. But unfortunately, he has not taken cognisance of the situation. He has not narrated anything or mentioned anything at all in the statement as to what steps are being taken to ensure better price for the farmers. This is very much disappointing. This shows utter disregard to the problems of the growers in Kerala. I would say this rather much blatantly. It is most unfortunate. I wanted him to apply his mind to this.
SHRI T. GOVINDAN (KASARGODA): Why are you avoiding copra?
PROF. P.J. KURIEN (MAVELIKARA): This question pertains to cash crops and copra is not a cash crop.
SHRI T. GOVINDAN (KASARGODA): The support price for copra has recently been revised by the Government.
PROF. P.J. KURIEN (MAVELIKARA): There are so many subjects. This question pertains to the cash crops and it comes under the Commerce Ministry. Copra is not a cash crop and it comes under the Agriculture Ministry. At least you must understand this much...(Interruptions)
MR. CHAIRMAN: Mr. Kurian, you seek your clarification.
PROF. P.J. KURIEN (MAVELIKARA): That is what I am doing. But I have to explain the situation because the Minister has either not understood it or he has understood it and deliberately keeping himself away from the fact. He should have taken some steps to give better and remunerative price to the farmers. There are nine lakhs of rubber growers and 95 per cent of them are in Kerala. Further, more than 90 per cent of them are small farmers whose holdings may be up to one hectare or even below that. For all these rubber growers or for that matter, cardamom cultivators, this is their sole source of livelihood. And the price has fallen to the extent of 30 per cent. Last year, you yourself admitted that the price was higher. The price for one kilogram of rubber was about Rs.55 to Rs.60. Today it has come down to Rs.40 to Rs.42. Having admitted this fact, he simply says in the statement that the prevailing price today is better than the best price that existed some time back and, therefore, he takes satisfaction and finds justification for not taking any action.
This is very bad. Why don't you compare it with the highest prices? We have got the highest price, which is Rs. 60 per kilo. From Rs. 60, it has come down to Rs. 42. Instead of comparing that, you take the other side and you compare from the West. This is double... (Interruptions)... I do not mean you are double but it means that I am only comparing that you are better than the West.
That is not the way to answer. That is not the way the Government should react in this situation. I am sorry to say that.
Sir, we went in for rubber cultivation after giving up remunerative pepper cultivation, areca nut cultivation etc., because that was a national need. The Government of India encouraged us and asked the people of Kerala to go in for rubber cultivation saying that the Government of India will take care of their rice needs and other needs because at that time, we were importing rubber. That was very huge drain of foreign exchange from our country. Therefore, as a foreign exchange substitute, to save the foreign exchange, we went in for rubber cultivation. For that patriotism, we should not be punished. That is what I want to say.
What has happened now? Prices have fallen from Rs. 60 a kilo to Rs. 40 a kilo. For the last three months, if you compute, the loss to the rubber growers in Kerala is to the tune of about Rs. 500 crore. Today, we in the country, produce rubber more than our requirement though once upon a time, we were importing NDR quality rubber. The credit goes to the farmers of Kerala that today the country is self-sufficient and we are producing what we want.
Sir, here, what is this Government doing? They are allowing import of rubber. I cry your indulgence, I need your support on it. In spite of the fact that we produce more, more than we require, you are allowing import. Why? To save whom? So, I would like to know, why do you allow import.
Secondly, import tariff is reduced. I would like to known, why do you do that.
Thirdly, when there is an excess of rubber produced in the country, we should export it. This year, our requirement is only 5.5 lakh tonnes of rubber. According to their own report, we have produced upto 6 lakh tonnes of rubber. So, there is a need for exporting about 50,000 tonnes of rubber. But nothing is being done.
MR. CHAIRMAN (COL. RAO RAM SINGH): I suggest that you please ask pointed questions or clarifications.
PROF. P.J. KURIEN (MAVELIKARA): Sir, these are all pointed questions.
So, why don't you encourage export when there is excess production of rubber in this country? In spite of the fact, the rubber prices have fallen down. Earlier whenever such crises were there, the Commerce Ministry used to ask the STC -- your own machinery -- to intervene in the market and price the rubber. Why don't you do that now? I am not asking that you should give at Rs. 60 a kilo but you ask the STC to enter the market and buy the rubber at a price higher by Rupees five than the prevailing price in the market. That is what I am asking. Not only that, you can also ask the NCDC also. The NDCD come forward whenever there is crash in price or price fall for wheat or price fall for sugarcane. Why cannot they come forward for rubber also?
Therefore, I would like to submit that you take up with the NDCD or other agencies like NAFED. Marketing federation is also there. Your Ministry can take up with all these people and ask them to go in for the purchase of rubber from the market. So far, nothing of these things have been done.
So, I would like to know, why don't they do all these things.
Further, Sir, one of the most important point is that we produce the latex rubber. But unfortunately, no buyer for latex rubber is there. For the last six months, producers of latex rubber are not able to sell it and those who are able to sell it, they are not getting the prices... (Interruptions)
MR. CHAIRMAN: I think, if you ask so many clarifications, it may lead to confusion.
PROF. P.J. KURIEN (MAVELIKARA): Sir, in the Calling Attention, it is only one problem but there are various aspects which I have to highlight. This is the problem of nine lakh farmers. So, please allow me to submit. I will take only two minutes more.
The latex rubber is used by the small-scale industries to produce natural rubber foam. At the same time, there is a substitute which is called `polyurethane'.
That is being used by big manufacturers and big industries to produce synthetic foam. This Government is giving protection to the big industrialists to produce synthetic foam which competes with the natural rubber product, that is, natural rubber foam which is used by small scale industries. What is the justification for that? Why do you allow this very low tariff import of polyurethane to compete with the natural rubber foam? Why do you not reduce the excise duty of natural rubber foam? I would like to know therefore whether you are prepared to protect the small scale industries which are using latex by reducing the tariff. I know your Ministry will not reduce the tariff. Therefore, my pointed question is whether you will take up with the Industry and the Commerce Ministries the question of reducing the excise duty on the natural rubber foam or increasing the duty of the imported polyurethane, so that the natural rubber industry is protected and they will be able to buy latex from the poor growers.
I will sum up. My first question is, will you ban the import of rubber.
MR. CHAIRMAN (COL. RAO RAM SINGH): I think you have already asked that a number of times. Do not repeat it. He is a very capable Minister. He has heard your questions and he will be able to answer them.
PROF. P.J. KURIEN (MAVELIKARA): Yes, Sir. Will you ban the import? Will you reduce the tariff duty? Otherwise will you export the rubber? Will you ask the STC to intervene in the market and produce rubber at a higher price than what is prevailing in the market? Will you take up with the Finance Ministry the question of reducing the excise duty on the natural rubber foam?
These are my pointed questions.
THE MINISTER OF STATE OF THE MINISTRY OF COMMERCE (SHRI BOLLA BULLI RAMAIAH): Mr. Chairman, Sir, let other Members also put their questions and then I will give answer to all of them together.
MR. CHAIRMAN: If they want to put questions, they should put it now. Mr. Thomas, do you want to ask some clarificatory questions?
MR. CHAIRMAN: That is why I called out your name. Please ask pointed questions only. Do not take up too much time.
SHRI P.C. THOMAS (MUVATTUPUZHA): I shall be very pointed in my questions. I would like to say that the rubber farmers, as has been already enunciated, are mainly in the very marginal and small sectors. The problem is, even if the price goes down today the farmer cannot keep his produce for another day and he has to sell it out. If the price crashes, say for example the price yesterday was Rs.60 and today it is Rs.30, the small and marginal farmers have no other go than to sell it at that price.
MR. CHAIRMAN: Is there any system of procurement by Government agencies?
SHRI P.C. THOMAS (MUVATTUPUZHA): That is exactly what I am coming to, Sir. You have caught the right point in a very very short time. That is exactly what we would like to point out. Unless the Government of India and the State Governments come forward, how can this be done? The answer given by the Government on the floor of Parliament is that out of 9.11 lakhs of people, 8.23 lakhs of people are in the small sector. So, you will have to save these 8.23 lakhs of people in the small sector who are responsible for brining the production of rubber of the country up to almost fourth position in the world. Incidentally, productivitywise we are number-one in the world. That means, it is the hard labour of these 8.23 lakhs of small and marginal farmers and the poor labourers who are working with them. This is not only controlling the economy of Kerala, it is going to control the economy of the whole nation because now we are planting rubber in eight States, including of course your State. I am not very sure of it. But northeast has already gone for that, Orissa, Goa and many other States, including Maharashtra, have gone for that.
MR. CHAIRMAN: Please confine yourself to the subject.
SHRI P.C. THOMAS (MUVATTUPUZHA): I would like to ask the hon. Minister whether the Government of India will come forward to procure rubber from the market, so that the price can be brought up.
Secondly, I would also like to ask whether if the Government of India could not purchase it, as such, then, can the Government of India think of some agencies? There are already some agencies like the Rubber Marketing Federation; then, the rubber producers have their own societies; then, the STC is there. These are the fora through which rubber could be purchased for which money is necessary. My second question is this. Will the Government accord some amount, sanction some amount for the purchase of rubber through these agencies? My suggestion is that Rs.100 crore may be given. If Rs.100 crore are given, the Government of India will get it back within two months. There would be no problem. The price will come up and the growers would not need this money. This money will go back to the Government's Treasury and the Government would not be at a loss at all. So, my second question is whether Rs.100 crore could be given for this or not?
My third question is this. Since the Government of India has at last come forward with this statement, we would also like to ask whether the Government of Kerala has given any scheme to the Government of India to safeguard the interests of the farmers. The major chunk, say, 95 per cent of the farmers in the small sector are from that poor State. So, my question is this. Has the Government of Kerala given any proposal to the Government of India?
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