Strategies to curb declining rubber production
Natural rubber production in Sri Lanka has been declining at an alarming rate to 79,000 mt last year from 155,000 mt produced in 1967. Sri Lanka with over 140 years of history as the pioneer rubber grower in the world outside South América was in the fourth place in the world as a NR producer in the late 1960s but has fallen down to the 12th position, which grew rubber much later, such as Vietnam, Cambodia and Myanmar.
A rubber plantation
At present, the contribution to the total export value of Sri Lanka from the rubber industry is only 5 per cent of which, Rs. 4.8 billion comes from the export of raw rubber, particularly in the form of latex crepe rubber while another Rs. 111 billion comes from the export of rubber products. At present about 70 per cent of the total rubber and latex production of the country is converted to value added products like surgical, examination and industrial gloves and also for making solid tyres, pneumatic tyres and tubes, rubber floorings, toys, etc. Last year, 120,000 mt of raw rubber and latex was consumed by the local products industry while the total production of raw rubber in the country was only 79,000 mt. Hence, we have imported over 50,000 mt of both dry rubber and latex from neighbouring countries to meet the shortfall. It is extremely good for the economy of Sri Lanka, if this upward trend in rubber consumption for value addition is continued. Alas, the danger is that already the rubber products industry had to depend largely on the raw rubber supplies from other Asian countries. How long can we do this?
Hence, the time has come now even to reconsider conversion of latex converted to latex crepe rubber manufacture by the estate sector to RSS to curtail the import of RSS by BOI companies. Even though we have the reputation as the sole producer of this premium grade of rubber the selling price of crepe is most of the time almost on par with RSS rubber on the international market and hence taking additional trouble to make crepe rubber at a much higher cost of production is financially a loss to the country. In the process of converting latex into latex crepe and sole crepe No. 1 grade, only about 65 per cent of the dry weight of rubber in the latex taken is converted to top grades of crepe; while the balance is ending up as lower grades of crepes and the yellow fraction which is sold at the auction as a scrap grade. Hence, the RPC’s producing crepe rubber should strongly consider converting their latex into good grades of RSS at a lesser cost, but selling the full quantity at almost the price of good quality latex.
One of the major reasons for the production of all agricultural crops in the country to drop is the escalating labour wages, which makes the weeding cost very high, particularly after banning the use of the weedicide, glyphosate due to unfounded health reasons. As a result, farm lands are not properly weeded now to minimise the absorption of limited quantities of nutrients added to the soil as fertilisers at a very high cost. If this ban is not lifted after a proper analysis of the health hazards, undoubtedly productivity of all agricultural crops, including paddy will drop further in the future.
At present, over 75 per cent of the total rubber production in the world is consumed in Asian countries to convert into end products, as the rubber industry has now almost totally shifted from the developed Europe and the US to the developing Asia. The world’s largest consumer of NR today is China with over 4,944,000 mt in 2016, which is six times the consumption of rubber in the US. The US was the largest NR consumer in the world, less than a decade ago. Today, all the reputed makes of US and European tyres are made under license in China and exported to all countries in the world. That is mainly because of their cheap and disciplined labour. There was a good possibility for Sri Lanka too to attract some of those investors here, had our politicians been smart enough. However, in the late 1970s, and in the early eighties, it was possible for Sri Lanka too to attract world reputed solid tyres and examination/surgical gloves manufacturers to invest here on rubber projects. Thanks to those who invested in rubber projects in Sri Lanka, the domestic rubber price in Sri Lanka is maintained slightly above the world market price thereby giving some kind of relief for the survival of the local rubber farmers.
The main reason for the decline in rubber production in the country today is the very low price paid for raw rubber in the world market. In 2010, there was a shortfall of 240,000 mt of rubber in the world market and hence the rubber prices rose up to over US$ 5 per kg. Then all rubber producing countries expanded their rubber plantation to reap the benefit of this attractive high price. As a result, from 2011 onwards, the rubber price started to decline again. Then, most of the companies neglected their farms, or totally abandoned them without tapping. Some lands were even converted to other crops.
This change of attitude of rubber growers all over the world reduced rubber production to create a shortfall in the market. But, the world recession started in 2013 continued to have its effect on the price of rubber thereby keeping it at very low level, below the cost of production of rubber. However, in the recent past, there was a slight improvement in the rubber price in the world market at around $2 to 2.25 per kg levels. But, when buffer stocks were released by Thailand and China, that increase had also depressed to the earlier level. The International Rubber Study Group (IRSG) has shown by careful analysis of the world rubber consumption and supply situation and have predicted that the raw rubber prices should reach a value not less than $10 per kg by 2019. But, by then, will there be rubber in Sri Lanka to sell at that price? My honest prediction is Sri Lanka would be unable to grasp this golden opportunity.
Not only that, the rubber end products manufacturers of Sri Lanka will have a tough time to purchase rubber from other Asian countries by competing with industrial giants like China, India and Japan in this region. Then, what will be the plight of over 30,000 skilled and semi skilled workers employed in our rubber products industry at present?
Unfortunately, the productivity of most of the estates under private management has now fallen down to far below the productivity of rubber smallholders due to non-adoption of Good Agricultural Practices (GAP) recommended by the RRI. It has been reported that in some of the plantations under RPCs, trees have been overtapped in a merciless manner and hence young trees in some revenue areas in estates have been slaughtered by tapping without leaving the bark to continue tapping for more than three to five years. In many estates, over 50 per cent of good trees are affected with Brownbast (TPD) due to over extraction of latex.
RRI introduced rainguards for rubber plantations to minimise crop losses during rainy months. Usually, annually about 72 days of tapping is lost in Kalutara and Ratnapura districts due to rain interference. According to some reports, some RPCs are conducting double tapping using rainguards far above the RRI recommendation and hence the whole idea of using a rainguard is lost and the TPD percentage of such estates has risen to over 50 per cent.
Action must be taken by the Ministry of Plantation to stop this destruction of the rubber plantations in a degrading manner by some RPC. In some estates under RPC management, it is reported that the productivity or the yield per hectare (YPH) has dropped down to about 550 kg/Ha/yr, which is far below the average productivity of rubber 829 kg/Ha/yr in the whole country as reported by the Rubber Development Department (RDD). The average productivity of rubber in Sri Lanka in 2013 according to RDD was 1300. This sharp drop in YPH from 1300 to 829 within three years is attributed to poor agronomic practices followed by some RPC managed estates all over the country.
In such poorly managed estates, apart from bad taping practices, replanting has not been undertaken and fertiliser applications have not been done according to RRI recommendation for many years. Going by the new areas coming into bearing, it is clear that the maximum crop that can be expected in the country for 2017 would be even below 79,000 mt; even though the RDD expects this figure to go up to 85,000 mt. In order to rectify this situation,the Ministry of PIantations must obtain the assistance of the RRI to get the damage done to the plantation by such RPCs assessed and either to take over such badly managed estates to be managed by the State Plantation Corporation or to hand them over to a more responsible, different management company.
It is very disheartening to note that the relationship between the RRI and the plantations has seen an unprecedented gap during the past decade, due to unknown reasons. However, the Ministry of PIantation should intervene and take drastic measures to narrow this gap for the RRI to closely interact with plantations to implement their recommended agronomic practices improving their productivity at least to the national average; which would help to curtail importation of rubber for Board of Investment companies for value addition to some extent in couple of years.
It should be empathised here that the technology developed by the RRI particularly in agronomy is quite enough to convert these badly managed estates to reasonably profitable level by improving productivity within two to three years. It is very clear from the role played by RRI Sri Lanka scientists to convert rubber plantations in Myanmar and Cambodia to overtake total rubber production in Sri Lanka in less than a decade. When they first commenced consultancy productivity of rubber lands in Cambodia, the productivity was only 420 kg/Ha/Yr. But, they were able to increase it to over 850 kg/Ha/Yr in five to six years and hence, the total rubber production in Cambodia from 97,000 mt in 2014 to 145,200 mt in 2016; which is nearly double the total rubber production of Sri Lanka at present.
In order to increase productivity levels in Cambodia, what they did under the guidance of Sri Lankan scientists were :
- Planting quality plants of only authentic high yielding clones, and not substandard plants purchased from neighbouring countries.
- Maintaining stands at between 450 and 500 plants per hectare at maturity.
- Tapping techniques were corrected by stopping under girth tapping and commencing tapping at the correct height from the union at not exceeding 100 per cent intensity.
- Correct application of fertilisers containing recommended nutrient levels at the correct time of application.
- Draining, terracing and regular weeding of rubber farms to minimise nutrient losses due to erosion and evaporation.
- At present, they are taught to maintain bud wood and multiplication nurseries.
They accurately followed our recommendations with good faith and were able to double their rubber production in less than eight years. Why not plantation companies in Sri Lanka too, plan to follow the RRI recommendation to increase the rubber production to reap benefits of the high price of rubber after 2019?
This is the time people South Asia are concerned about the environment because the world weather forecast centre predicted last week that in 2100, the temperature of India, Pakistan, Sri Lanka and Bangladesh will rise by 2 degrees Celsius. If no attempts are made now by South Asian countries to minimise this temperature increase, what will happen to the productivity of our agricultural produce, the fish population in the ocean and even to the colourful coral reef which attracts many tourists to our country?
It is universally accepted that the contribution from the NR plantation to the environment is equal to the contribution to the natural forest. NR plantation helps to minimise the green house effect by sequestrating 10 mt of Carbon dioxide gas per hectare per year unlike other agricultural crops. Hence, those RPCs converting rubber lands to oil palm should be viewed with much concern about the ecological effect of the conversion of rubber estates to oil palm in this small island where we only have 18 per cent forest cover. The Ministry of Environment should be concerned about this potential danger and take adequate measures to rectify this problem to protect the country from turning into a desert.
(This is a speech delivered by the writer at the August 13 Coconut, Rubber and Tea (CRT) seminar in Colombo)