Why Kerala rubber farmers are furious with tyre makers and Union govt

For a long time, Sicily Thomas, a 60-year-old widow from Kottayam district in Kerala, enjoyed a luxurious lifestyle with her daughter Ann Mary and mother Thresiamma. Her sole source of income came from rubber trade. With six acres of land, they led a lavish life. They owned a Maruti Zen and a Mahindra pickup. Ann Mary was in private school.

Over the past 10 years, the situation has changed drastically, with rubber prices dropping to almost half. The family had to sell off its vehicles, followed by half its   land. Ann Mary, who had joined a nursing course, had to drop out. She now works as an accountant in a local establishment after completing her B.Com. A couple of marriage proposals did not materialize. Thresiamma is now bedridden.

Lifestyles hit

The economic challenges forced the family to make significant sacrifices, impacting both their financial stability and personal aspirations. This is not an isolated story in the high ranges of Kerala where rubber is the main cash crop and livelihood.

“I have been a farmer since age 12, which means for the last 50 years. The last decade has been the toughest in my lifetime. The price of rubber has not only plummeted, but it is particularly challenging for farmers like me who own four or five acres of land. In 2011-12, the price was 270 a kg, and we led content lives. Now, the price is around Rs 130. Many small-scale farmers are literally struggling to make ends meet. Numerous kids have had to abandon studies. Some who managed to pursue nursing and work abroad are helping to sustain their families,” said Biju CD of Erumeli in Kottayam district.

Industries shut

“A decade ago, there were several rubber band and gloves manufacturing units in Kanjirappally area. Each of these units employed 30-40 women. While the wages might not have been highly lucrative, they were sufficient for survival. Unfortunately, all of these units had to shut down due to the rubber crisis. This led to hundreds of women losing their jobs, leaving their families in dire straits, struggling with the threat of starvation,” said KS Sajin, a leader of the All India Kisan Sabha (AIKS).

The majority of rubber farmers have resorted to selling their properties, plot by plot, to survive. Some have opted for alternative livelihoods while others have chosen to leave their villages. Tragically, there have been cases of suicides too.

Farmers protest

The severe challenges in the rubber industry have forced the remaining rubber farmers to take to the streets to denounce what they call apathy shown towards them by the government. The AIKS, affiliated to the ruling Communist Party of India (Marxist), is gearing up for a nationwide strike demanding that the Union government declare rubber an agricultural crop and announce a minimum support price (MSP) of Rs 350 per kg, as suggested by the MS Swaminathan Commission. This was an electoral promise of the BJP in 2014.

The AIKS also wants that an amount of Rs 1,788 crore penalty levied by the Competition Commission of India (CCI) on five tyre manufacturing companies for illegal cartelisation be distributed among the farmers.

CCI fines producers

In 2018, the CCI found that a cartel formed by five big manufacturers had colluded to keep tyre prices high over the last decade and a half in order to make huge profits even as rubber farmers reeled in losses and thousands of workers lost their jobs. The dispute is still pending in the Supreme Court based on the appeals of the manufacturing companies and the Automotive Tyre Manufacturers Association (ATMA).

Recently, farmers held a demonstration and attempted to lay siege to tyre manufacturing companies, MRF and Apollo Tyres, in Kochi to protest against the cartel and the Union government.

Companies cheat?

“It is evident from the CCI order that the tyre monopoly companies were making a huge profit from the price dip of rubber," observed Nitheesh Villatt, researcher and central kisan council member of the AIKS, who has been following the issue for many years. "However, they did not share this profit with their consumers."

"These companies, which control almost 83 per cent of the internal market, were hiking the price of their products. They were leeching off the farmers and squeezing the consumers. The cartel has severely affected primary producers by reducing the prices of rubber below the levels that would prevail when input buyers compete against each other," said Sajin of AIKS.

“When we sold rubber for Rs 250 per kg, the price of a lorry tyre was around Rs 13,000. Now, when we farmers hardly get Rs 170, that too with the support of the government scheme, a tyre costs around Rs 28,000. Isn’t this looting?” 

Monopolising for profit

The Federal attempted to contact tyre manufacturers, particularly Apollo Tyres and ATMA, through email, but got no response. The story will be updated if and when they reply to the email.

“Many people express apprehensions regarding the borrowing practices of the Kerala government. An increase in productivity and the price of agricultural products is an important factor since the repayment capacity increases with an increase in GSDP. Monopolising for profit maximisation is viewed as detrimental to the developmental interests of the people of Kerala,” historian KN Ganesh wrote on Facebook.

Shooting prices

According to the International Rubber Study Group, the world natural rubber production in 2021 was 13.770 million tonnes, an increase of 5.4 per cent over 2020. India was the sixth largest producer with a share of 5.5 per cent of global output. The global consumption of natural rubber also went up over the previous year by 10.2 per cent recording 13.978 million tonnes. India continued its second position in terms of natural rubber consumption, next to China.

According to the economic survey for 2021-22, the Rubber Production Incentive Scheme and its enhancement to Rs 170 per kg and remunerative price throughout the year can be the factors for improvement in production. The country consumed 12.38 lakh tonnes of natural rubber in 2021-22, 12.9 per cent more than the quantity consumed in 2020-21.

The import of natural rubber in 2021-22 increased by 33 per cent to 5.46 lakh tonnes compared to 4.10 lakh tonnes in 2020-21. The volume of natural rubber exports from the country decreased to 3,560 tonnes in 2021-22 from 11,343 tonnes in 2020-21.

Rubber in Kerala

As far as Kerala is concerned, rubber occupies the second largest area in Kerala next to coconut with 21.8 per cent of the gross cropped area and significantly contributes to the economy. In 2022, the rubber cultivation spans around 8.27 lakh hectares, yielding a total production of 9 lakh tonnes. This amounts to a productivity rate of 1,472 kg per hectare, a decline from 1,903 kg per hectare in 2013.

The sector supports over 12 lakh small, marginal and middle farmers, 2 lakh tapping workers, 30,000 small traders and numerous workers in allied industries.