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Despite progress in NR business:

Challenges remain

The Rubber Plantation Industry of Sri Lanka has grown, developed and survived 133 years, despite many challenges, the most devastating being volatile global market, over which Sri Lanka has very little control.

Rubber extent

The NR market had been positive with sheet rubber fetching about Rs. 265 per kg and crepe rubber being in the region of Rs. 276 per kg at the Colombo auctions, recently

The total area under rubber in Sri Lanka increased marginally from 120,000 ha in 2007 to 122,000 ha in 2008 and to 124,000 ha in 2009 with an increase of about 2,100 ha and 3,100 ha respectively, being mostly in the Low Country Intermediate Zone viz Moneragala.

The re-plantings also increased in extent; 5200 ha in 2007, 1,000 ha in 2008 and 3,600 ha in 2009, (see Box 1 ). It appears very unlikely that the rubber new planting target of 40,000 ha in the non-traditional areas could be achieved as desired, possibly due to several technical and non-technical issues and therefore, have to be still contended with the 11th position in total global rubber extent and global Natural Rubber(NR) production.

Productivity

Rubber has witnessed a 10 fold increase in yield per unit area during the last 133 years. The main reason for such an increase had been the genetic improvement of Hevea planting material and rapid utilisation of improved material by the industry.

At the beginning of the industry, unselected seedlings were used as planting material and their yield potential ranged from 300 to 400 kg per hectare per year.

Genetically improved clonal material now being recommended for planting has an annual yield potential of more than 3000 kg per hectare, when grown under optimum conditions, eg. RRI C 100, RRISL 200 and RRISL 2000 series clones, ( see Box 2 ).

Production

Sri Lanka had been the fourth leading global rubber procedure in early ‘60s with a rubber extent of 270,000 hectares.

Rubber production which was about 155,000 mt in 1978, declined to a level of about 90,000 mt in the mid ‘90s.

With rubber business showing signs of growth after the NR market boom, total rubber production also reached a level of 117,000 mt in 2007, with an increased productivity of about 1100 kg.

The rate of growth in 2008 increased to 9.9 percent from 7.3 percent in 2007 and to 5.5 percent in the first six months of 2009, despite the expansion of mature area being minimal and the global economic melt down in the latter part of the year.

The productivity has been showing an increasing trend to reach about 1,360 kg/ha. Productivity is however, much lower than 1,706 kg/ha, recorded in India.

There still exist wide yield gaps (see Box 2). The present national yield is less than 50 percent of the achievable and the corporate sector yield is about 40 percent of the maximum potential.

Going by the standards achieved by other leading global rubber producers and given the research and operational skills of scientific and management personnel in Sri Lanka, it should not be difficult to meet these targets, if genuine effort is made.

NR Market

The NR market had been positive with sheet rubber fetching about Rs. 265 per kg and crepe rubber being in the region of Rs. 276 per kg at the Colombo auctions, recently.

Globally, NR suffered 4.6 percent fall in output in the first seven months of 2009 ended July, according to an ANRPC report.

This appears to be mainly due to adverse climatic conditions; heavy rains following dry winter, that had hampered tapping operations in the major rubber growing countries; Thailand, Indonesia and Malaysia.

Further, these three countries adopted steps like production cut, accelerated replanting program, export cut to stabilize the rubber market and maintain it at remunerative level. These strategies are expected to keep the global rubber market buoyant in the coming months.

There are also reports that economies of Europe and Japan have made a turnaround and moved positively. The US economy is also on the revival path and accelerated economic activities in the Asia- Pacific region.

These are indications of higher consumption of NR the world over and the current buoyant market of over US$ 2.2 per kg may therefore, be sustained in the future. Sri Lanka should therefore maintain the current momentum in NR business.

Issues

Despite the impressive progress in rubber growing, the industry is plagued by a series of vital issues such as: the incapability of the aged tappers which can affect NR productivity the most, declining planted area, labour shortage, uneconomic holding size (small holdings), low land and worker productivity, high cost of production, inadequate resources, social disparity, poverty in estates etc.

Way forward - research

Research should set a crop productivity target of 6,500 to 7,000 kg/ha/yr, breed clones for moisture stress tolerance, develop Transgenic clones to improve/ alter the technological properties of processed rubber, technique for development and rapid multiplication of identical plants to realize the full yield potential of clonal material and eliminate root stock effects, Technologies to reclaim degraded unproductive and marginal rubber lands to the level of virgin productive lands, Agronomic practices to expand rubber into the low-country dry zone.

Should, re-scrutinize the approach to fertilizer use in mature rubber. The industry can save million of rupees.

Develop harvesting systems with lower labour requirement, high intake per tapper and unskilled techniques for harvesting by un-skilled workers.

More innovative value added rubber products based on market intelligence and the Internal rate of return of 40 - 50 percent to be targeted on investment in research and development.

Plantation Management

Plantation Management should set a corporate sector crop productivity target of 3000 to 3500 kg/ha/yr, Identify plantings / holdings with low productivity levels and adopt non-conservative and more intensive but effective technologies appropriate to the needs to boost productivity. Introduction of GIS technology would provide the necessary back-up information. Adopt enhanced annual replanting target of 5 percent in view of the forecasted rubber market revival and go for RRISL 200 and 2000 series clone.

Move away from a conservative approach and adopt on innovative, non-conventional and professional approach in plantation management, Expand rubber planting in non-traditional areas and in un-economic tea lands in the low and mid elevations with appropriate technologies, Reduce the agro-chemical load by scientific manipulation.

Re-scrutinize the approach to fertilizer use in mature plantings. Millions could be saved. Consider human capital as the prime source of innovations, quality and production gains and which has unlimited potential for investment, consider Corporate Social Responsibility (CSR) not as a liability, but as the entire range of obligations that the management has towards society; increasing the quality of life of internal and external customers.

Recognize that continuous up-gradation of knowledge and skills are crucial to maintaining and enhancing the human capital. Knowledge management, to emerge as an innovative inter-disciplinary business technology within the organisation, Develop a mechanism to guide estate workforce out of their dependent mindset and made to feel proud citizens living in dignity with the rest of the community.

Rubber should be recognized as a strategic crop and a national policy and a master plan should be formulated for its development.

A national crop productivity target of 1,800 to 2,000 kg/ha/yr should be set and strategies should be formulated to achieve it.

Provide adequate replanting and new planting fund and other logistic support to ensure that the annual replanting and new planting targets are achieved , Provide support to safeguard the small and medium scale rubber products sector currently challenged by violent fluctuations in the rubber market, Develop a mechanism to assess the knowledge and skills requirement of the industry at national level and assign training, the priority it deserves and provide adequate resources.

Encourage private-public sector partnership in research and development and in management for long-term viability of the rubber industry, formulate policies and strategies to achieve poverty reduction among the estate worker community and the smallholders and to eliminate social disparity in plantations.

Based on the emerging needs of the rubber industry, improvements to the conventional style of management has been suggested with the singular purpose of enhancing the long-term viability of the rubber industry that has survived 133 years and to re-position ourselves and regain the status we enjoyed in the past.

Emerging Asia will continue to be the world’s most dynamic region in 2009 and beyond driven by buoyant China and India.

Sri Lanka with its meagre contribution of less than 2 percent in global rubber business, is also likely to benefit.

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