It’s the biggest challenge before the sector, says economist.
It is impossible for the rubber industry to be sustainable without the development of the smallholder-dominated natural rubber production sector, according to Jom Jacob, senior economist, Association of Natural Rubber Producing Countries, Kuala Lumpur. He was making a presentation at the India Rubber Meet 2018 here on Wednesday.
“Smallholders are resource poor and are passing through hard times. As the global rubber industry value-chain is taking the journey towards sustainable future, the biggest challenge is to equip the smallholders and help them to be on board. A chain is as strong as its weakest link,” he said.
He pointed out that as the economic viability of rubber cultivation was under threat, the great concern for small farmers is to survive the hard days. The small farmer may be forced to look for alternative livelihoods if rubber cultivation remains unattractive for long periods.
“At the same time, if there are no exit options, there will be a reduction in further investments in the sector. Low rate of replanting, retention of uneconomic old trees, abandonment of mature trees, technological stagnation, etc. are signs of the stress undergone by small farmers forced to stick to rubber cultivation in difficult times,” he said.
Mr. Jacob also said that this will result in low yields. “The average yield (measured in terms of the annual production per hectare of mature area) came down in India from 1,903 kg in 2008 to 1,311 in 2017,” he said. A decline in average yield increases the cost of producing natural rubber. Even if wages and all material input costs remain the same, the cost goes up just because of the drastic fall in average yield, he added.
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