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Introduction

Natural rubber (NR) stands as a crucial plantation commodity in India. However, since the economic reforms of 1991, the sector has encountered heightened price volatility due to its integration into the global market. Previously, NR operated within a regulated framework, benefiting from tariff protection and domestic market regulations. The shift towards global market dynamics, reduced import duties, and increased competition from other NR-producing nations have presented numerous challenges to the sector's performance in the domestic market.

Role of Natural Rubber in the Economy

Despite occupying a mere 0.4% of the country’s gross cropped area, natural rubber contributes significantly to India’s GDP, constituting 0.64% as of 2018-19. Its contribution to the manufacturing GDP, at 3.63% in the same period, underscores its importance in the socio-economic development of the nation (A Sajitha, Economic and Political Weekly, February 4, 2023).

Challenges Faced by NR Production and the Rubber Industry

The rubber sector has encountered substantial difficulties over the past few years, exacerbated by the onset of the Covid-19 pandemic. Despite efforts, the sector is yet to regain its former standing. Key challenges include:

Escalating Input Costs

The costs associated with maintaining rubber estates and producing high-quality rubber have surged. Factors such as increasing commodity prices, particularly wages for skilled labor, contribute to rising input costs. Labor expenses, in particular, represent a significant component of the overall cost of rubber cultivation across Asia-Pacific and Latin American countries.

Inconsistent Rubber Quality

Manufacturers prioritize purchasing high-quality rubber sheets for various applica-tions such as automobile tires, hoses, and footwear. However, manual rubber processing often fails to meet the desired quality standards, leading to suboptimal prices for many planters.

Limited Market Access

Many rubber planters process their produce in remote villages, where inadequate infra-structure and bargaining power hinder their ability to command competitive prices for their products.

Challenges in Post-Harvest Processing

Post-harvest processing of field latex, involving coagulation, sheeting, and drying, has become increasingly costly, eroding farmers’ profits.

Labour Shortages

Rubber plantation is labour-intensive, but the reluctance of the younger generation to engage in this sector, compounded by the remote and hilly locations of many plantations, has led to a scarcity of skilled labour.

Modernization and Automation

While modernization and automation could potentially revitalize the sector, the adoption of such technologies remains limited, primarily due to financial constraints. Moreover, the widespread implementation of automation could lead to surplus labor, raising concerns about local employment opportunities.

Conclusion

Despite its challenges, the rubber industry remains a vital component of India's agricultural landscape. Addressing issues such as input costs, market access, and labor shortages will be crucial for sustaining the sector’s growth. By embracing modernization initiatives and exploring opportunities in government schemes such as the Production Linked Incentive (PLI) scheme, the rubber industry can overcome its current hurdles and thrive in the global market.