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Farmers can’t escape

Farmers lost their confidence on getting profit from Agriculture. From the bottom Panchayath level to Central spending so many crores in Agricultural sector. Farmers are not getting any benefit from it equally on their share in farming.  Once the economists said that the inflation is due to the price hike of food produces in India. Unfortunately the hike of Inflation visible from the past few decades. But the inflation of food produces is only 14.3% which is calculated from Wholesale Price Index (WPI). At World level maximum Countries are calculating inflation on Consumer Price Index (CPI).

In India, wholesale price index is divided into three groups:

1. Primary Articles (20.1 percent of total weight), Food Articles from the Primary Articles Group account for 14.3 percent of the total weight.

Food articles wholesale price is controlled by the middlemen. Farmers are not entitled to fix the selling price of his produces. The public distribution system, many other Govt agencies are available to control the price of food produces in the market. Thus farmers can’t get the benefit of inflation. If the inflation is calculated for 65 years  as base year 1949 the inflation rate may be higher up to 2000. To reduce the inflation rate the economists purposefully changes the base year periodically. In 1985 the labour wage of a male worker will get Rs. 20 per day and now he gets Rs. 700 per day due to Inflation. Unfortunately any of the agricultural produce gone up below 4 times. The salary and pension are increase more than 35 times including DA. HRA, TA, Promotion and other allowances are above the inflation rate.

2. Fuel and Power (14.9 percent)

The price of Fuel and Power are controlled by the State and Central Govts. These will be hiked on the basis of inflation which is a burden for farmers.

3. Manufactured Products (65 percent).The most important components of the Manufactured Products Group are:-

(i) Chemicals and Chemical products (12 percent of the total weight)

(ii) Basic Metals, Alloys and Metal Products (10.8 percent)

(iii) Machinery and Machine Tools (8.9 percent)

(iv)Textiles (7.3 percent)

(v) Transport, Equipment and Parts (5.2 percent)

All these manufactured products price are fixed by the Manufacturers with profit and other expenses.  BICP stands for Bureau of Industrial Costs and Pricing (India), they will not harm the industry on pricing.

The Commission for Agricultural Costs and Prices  giving reports to Govt of India. All reports by CACP are in papers only, because farmers are not aware on these reports and farmers are not united to fetch the positive result from it. An interesting Study  on the price indices of few Agricultural produces in Kerala which was submitted to CACP by Dr. Yageen Thomas in 2007, who was the head of Statistics Dept in Kerala University.  A Report  Submitted before the Commission for Agricultural Costs and Prices related with Coconut and it’s byproducts in 2008 by Dr. Yageen Thomas. Coconut Development Board  spending more money for the development of farmers. In 1985 for plucking coconuts from 50 trees I have to give 15 coconuts and Rs. 2 only. For the the 15 coconuts he was able to sell it at Rs. 75  where the labour wage of a male worker in agricultural sector was Rs. 20. Now the farmers have to give Rs. 1000 for plucking coconut from 50 trees. Above all shortage of workforce in Kerala is an another issue. Many of the labour in Kerala including rubber tapping now work force from North Eastern States who are able to get the wage in their States from Rs. 150 to 200 per day. Kerala is a Gulf for them to fetch a better income to their families. Young educated in Kerala are not interested in Agriculture, they need white color job  to get a bride or groom at their status. How ever inflation goes up and farmers income is going down which creates waste land every where. The farmers or work force are not interested to build their children  on their own standard. For better income to farmers they are using fertilizers, pesticides and herbicides for better yield which is harmful to the environment and health of flies, Animals, livestock and human. With out controlling the inflation farmer can’t escape from his suicide attempts. Thus the calculation of Inflation must be on Food Articles WPI  only. Farmers capability to use manufactured products is a must for the economic growth and self sufficiency of the Nation.


Reason for the price fall of natural rubber

The storage of buffer stock up to 5 lakh Tonnes on Natural Rubber by Thailand was the main reason for a great fall on price. The duty paid import to India at lower price than domestic with out anti-dumping duty is another reason. The duty paid import is for the consumption in India which will reduce the demand. Thus the imbalance of supply and demand will lead to another price fall. For profitable import the importers are powerful to hike the Domestic price above International is one more reason. It will destroy Indian manufacturers who are purchasing from domestic market with VAT. Above all the agreements signed with neighboring Countries permits import raw material for tyre manufacturers on Nil Duty. Finished products also permitted to import on Nil Duty. Thus the import of finished products are five times greater than the export of finished products. The manufacturers are capable to get support from the Center to implement anti-dumping duty on imported tyres tyres which is cheaper than domestic tyres. Growers are not capable to submit requests to Centre to implement anti-dumping duty on low priced import of raw rubber. The Statistics published by Indian Rubber Board with mathematical error with a reduced figure of balance stock on each month from 1st April 2010 till now. The old aged visual grading system permits the dealers for grading exploitation. They can purchase at lower grade and price for the sale at higher grade and price for more profits to overcome the loss on price fluctuations.

Details of Export, Import and missing value as follows

Anomaly in Rubber Statistics

Anomaly in Rubber Board’s stock calculation a worry: Trade bodies


KOCHI: Disturbed by the anomaly in August 2014 data on the country’s natural rubber (NR) stock published by the Rubber Board, tyre and rubber trade bodies have written to the Union ministry of commerce, saying this discrepancy will have significant consequences for all stakeholders.

The Rubber Board’s stock figures represent the country’s existing NR stock and is arrived at by deducting offtake, which is consumption and export, from availability, which is production and imports.

In its letter to additional secretary, plantations at the department of commerce, who is also the chairman of the expert committee formed to draft a national rubber policy, the industry bodies pointed out that the August 2014 NR data shows a discrepancy of roughly one lakh tonnes.

Based on the opening stock of NR in April this year and factoring the key parameters of production, consumption, imports and exports, the closing stock should have been 2.85 lakh tonnes at the end of August this year. However, the figures published by the Board was 1.85 lakh tonnes. In effect, 1 lakh tonnes have been ‘adjusted’ without any explanation, said Automotive Tyre Manufacturers’ Association (ATMA) and All India Rubber Industries Association (AIRIA).

“Since import and export figures are fairly accurate, either the production has been over estimated or the consumption has been under estimated or a combination of both”, said Rajiv Budhraja, director general of ATMA.

The trade bodies are also planning to raise the issue at the second meeting of the expert committee to formulate national policy in Kochi later this week.

`Decide whether to cut rubber trees down’

Rubber farmers in the country should decide whether to cut their rubber trees down or continue being happy with lower income as prices are expected to go up only by 2025, said Hidde Smit, former secretary general of Singapore-based International Rubber Study Group (IRSG). Smit, who was credited with the prediction of the current fall in natural rubber prices, was talking on the sidelines of India Rubber Summit, held in Kochi last week. “India is not to blame for the oversupply; it is coming from Thailand, Vietnam, China, Cambodia, Myanmar and Laos,“ he stated.According to him, a recovery from the global economic downturn won’t help rubber prices to climb back.“On average the consumption growth is 4% per annum, while the supply potential will grow by 6% for 4-5 years. So, by 2025, it must be a lot better,“ he said.