Date:23/05/2006 URL: http://www.thehindubusinessline.com/2006/05/23/stories/2006052303611300.htm

Back Growers greet with caution

Vipin V. Nair

RUBBER AT RS 100/KG

STAYING GUARDED: Farmers prefer a steady Rs 60 a kg price.

Recently in Kottayam

Sitting in the portico of his century old house cocooned in greenery, Francis Sebastian grudges rising expenses to mange his eight-acre rubber plantation. "Labour costs have drastically increased. And these days you won't find any good tappers either," the 62-year-old farmer says.

A veteran in rubber trade, Mr Sebastian says he is not really relishing the present boom that has taken natural rubber prices to over Rs 100 a kg, breaking all previous records. "I fear it won't last long. We farmers would rather have a steady price of say Rs 60 a kg throughout the year than such sudden ups and downs," he says.

That fear notwithstanding, the country's million-plus rubber grower with half-a-hectare plantations, are perhaps having the time of their lives. Natural rubber prices have gained 40 per cent since the beginning of this year to touch a historic Rs 100 a kg. "Growers are upbeat. They are really happy," says Prof. K.K. Abraham, President of Pala Marketing Society, a primary co-operative engaged in rubber trade.

Prof. Abraham is all the more cheerful as the society has notched up its best-ever financial performance in 2005-06. Net profit rose to Rs 4.25 crore, a record for a primary marketing co-operative in the State.

Driving through the interior roads of Kottayam, the district which accounts for 20 per cent of the country's natural rubber plantations, one can see new houses coming up all around. On every turn, a brand new Honda City or a Maruti Baleno zips by. Shops and jewelleries are beehive of activities. The prosperity of the region is clearly visible.

But how much of it comes from the present rubber boom? Although rubber is the mainstay of central Kerala's economy, people in the region today also have other means of substantial income. For instance, many families have their children working abroad.

Availability of cheaper and easier bank loans is another factor. Many growers say that they are handling their increasing income a lot more cautiously this time around. When a similar price boom occurred in early 90's, they had splurged their new-found wealth on Mercedes cars and palatial houses. But when prices crashed, many were left saddled with huge debts.

Unlike in the past, growers keep themselves abreast with trends in the international and futures markets so that they can avert any sudden market upheavals.

As Mr Sebastian says the flipside of the record prices is the rising labour and input costs. Real estate rates of rubber plantations have also shot up with one acre fetching a minimum of Rs 10 lakh.