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| Monday, 9 February 2004 |
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Strategy to reawaken the rubber industry Dr. L.M.K. Tillekeratne, Director, Rubber Research Institute of Sri Lanka Natural Rubber (NR) plant, botanically known as Hevea brasiliensis has existed in Sri Lankan since 1876. Sri Lanka was the first Asian country to plant this species, a native of South America this plant was first introduced by Henry Wickham (who started the rubber industry in Ceylon). But due to limitations in area the Sri Lankan contribution to the NR requirement in the world market is minimal and is about 1.8%. Nearly 95% of rubber production in the world comes from Asian countries headed by Thailand, Indonesia, India and Malaysia while the balance 5% comes from African countries such as Cota d'vore and Cameroon.
The peak NR production in Sri Lanka has been reported in 1978, which was 165 000 MT, when there was 202 000 ha of rubber plantation in the country. Since fragmentation of estates in 1975, land has been taken over for village expansion and for industrial purposes as well. Hence, the actual extent of rubber plantation in the country according to the latest statistics is about 128,879 ha. of which 83253 ha. (64%) is owned by smallholders. The worst blow to the Natural rubber industry in the world occurred in 1997, caused by the South East Asian financial crisis. World market price of NR fell by nearly 50% to about Rs.30/kg at village level. During this period, most of the smallholders abandoned their plantations because the COP for rubber was more than the price paid for kilogram in the local market. Hence for the first time since World War 2, the NR production fell to below 100 000 MT/annum. If there was a price stabilization fund in operation as in Thailand, the industry would not have fallen. Even during this crisis the Thai rubber production continued to increase, because, the Government of Thailand paid a minimum price per kg produced by the smallholders irrespective of the international NR prices, which was substantial for the Thai farmer to cover costs and have a small profit margin. This fund has been built up by the Thai government by levying a cess on raw rubber exports when the rubber prices were attractive. Rubber industry in countries like China and India survived because they consumed all their NR and even import rubber products industries. Hence, they were not dependent on the price of raw rubber in the world market. Rubber products industry in Sri Lanka however has shown a steady growth even during this bad period for raw rubber production. At present nearly 65% of the NR production in the country are consumed locally for value added end products industry which employs large number of people in all levels. This higher internal consumption figure too helped the local rubber industry to survive; because the local rubber products industry created an internal demand which was able to boost the FOB price of rubber. Short sighted policies followed by some of the plantation management companies to overcome this situation contributed largely to this sharp drop in rubber production. Real effect of some of such short sighted policies adopted are yet to come. In most of the plantations under company management, no manuring has been done for years. Some have sold trees including those yielding, cutting the tree and without removing the root stock. In such fields rubber cannot be grown for years due to white root disease caused by the decaying old rootlets in the soil. In many estates, nurseries have been badly neglected and hence there won't be plants available even for their future replanting programme. There are estates where trees have been leased out to people for harvesting at the rate of Rs.10-20 per tree per month. Those who got the trees on lease basis have over tapped these trees far above the recommended tapping intensities. Such trees have already developed tapping panel dryness and defects such as nodule formation caused by careless tapping. Barks have been consumed far above the recommendations; thereby making these plantations useless to the industry. If these unwise decisions were not taken and they followd RRI advise for a year or two, they could have benefited immensely from very attractive rubber prices prevailing in the markets now. As a result of conversion of 7000 acres of prime rubber lands into oil palm, the country is now facing a severe shortage of rubber to the products industry. Amount of rubber imported to the country in 2003 was over 7000 MT both in dry rubber and latex form at a cost of over Rs.800 million. As a result of not replanting since 1998, the rubber production in the country will further decline. unless some special steps are taken by the Government in the forthcoming years, the rubber products industry will face more problems in future due to shortage of rubber for their end products. Some industrialists have already taken steps to invest in countries like Vietnam and Thailand, where the rubber is freely available. Discipline of labour in those countries is the other attraction. |
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