Call for
a vibrant natural rubber policy
By Dr. N. Yogaratnam, Consultant,
National Institute of Plantation Management
The rubber industry in the country,
like all other NR (natural rubber) producing countries,
is currently enjoying a bonanza in the form of record
rubber prices, although the rubber products sector in
particular the medium and small scale industries are
in a state of confusion.
The factors that contributed to the
unprecedented rise in the prices are quite well known
and have been discussed in detail in previous articles.
The key factor being the extent of the demand-supply
gap. Both the demand and supply depend on large number
of factors, many of which are easy to identify.
Potential challengers
Increased output resulting from favourable weather and
political stability in leading rubber producing countries
and revival of abandoned rubber plantings due to continued
high prices and on the demand side, slowing down of
the GDP growth following sharp rises in oil prices and
related aspects are some aspects that are bound to have
an impact on the long term stability of rubber prices.
The NR shock may also promote the
tendency of NR consuming countries to go for more and
more SR (synthetic rubber) in place of the high-cost
NR component in their products and the growing demand
for reclaimed rubber and the hunt for alternatives to
NR are also matters of great concern for NR producers.
Alternatives to NR
Triggered by the unprecedented NR price rise, the hunt
for alternatives to NR has gained renewed vigour across
the rubber consuming countries in the world. In fact
attempts are being made to retrace the trails of past
developments on a variety of plants and shrubs, known
to have rubber content in them, which may serve as economically
viable natural alternatives to the Hevea brasiliensis
(Rubber tree)
In the hunt for NR alternatives, it
had been the desert shrub Guayule that came to the centre
stage in the wake of NR short supply, whenever it happens.
The major hurdle in the way of its
commercial exploitation had been the comparatively higher
processing costs and cheaper availability of NR. But
it appears that the situation has changed today with
the NR prices sky-rocketing and creating shock waves
in the global rubber industry. It is believed that Guayule
has also the distinct advantages of not having any protein
allergy problem and many products like tyres can also
be made out it.
Another potential alternative is an
annual plant, Taraxacum kok-saghyz or Russian dandelion,
conveniently known as TKS.
This plant, TKS, has the latex sap
in its roots and can be densely cultivated. Harvesting
the sap can be automated and the annual crop supply
can be adjusted to demand, unlike the perennial tree
Hevea.
It is estimated that about one million pounds of rubber
could be produced annually with 10,000 acres of TKS
crop. The by products of the extraction is reported
to be about 2.3 million gallons of ethanol, an alterative
fuel that could be sold to offset the cost.
In any case, it has been reported
that it requires significant amount of agronomic work
before commercialization. Sunflower and rubber producing
tobacco plants are also emerging as potential challengers
to NR.
National NR Policy
The foregoing discussion indicates the possibility of
wide fluctuations in the price of NR, though it may
not be in the near future. Sri Lanka, accounts for less
than 2% of global production and supply of NR. Therefore,
government’s ability to influence world prices
is extremely difficult. Yet, there is much the government
can do to safeguard the domestic rubber industry. One
big question is; are we prepared for any violent fluctuations
in prices and a repeat of the crisis that triggered
the rubber price to fall to a 30 - year low in 1999.
In Malaysia, under the 9th Malaysian Plan (9MP) launched
recently, the government has identified rubber as a
strategic crop. Adequate replanting funds have been
allocated to ensure that the annual replanting target
is achieved. This, they believe is one way to prevent
rubber prices from fluctuating too much. In Sri Lanka,
we have already seen latex crepe that was fetching Rs.
400 per kg in forward sales in July this year, going
down to about Rs. 215 per kg in mid September.
The NR industry therefore needs a
national dynamic policy to ensure its long term viability
and to meet the growing demand of the domestic rubber
products sector which is currently reeling under the
NR shock.
In Sri Lanka, the total rubber planted
areas has declined from about 270,000 ha. in the early
1960’s to reach about 115,000 ha. in 2005. The
rubber production that was in the region of 155,000
mt in 1978, also declined steadily to reach a level
of about 90,000 mt in the mid 90’s. Although there
has been an upward trend since 1993, the South East
Asia financial crisis again exposed the weaknesses in
our industry strategies, plans and operations.
Nevertheless, with the economic recovery
in Asia/Pacific and Asia once again emerging as a dynamic
region, and NR prices becoming very attractive, Sri
Lanka’s rubber industry also showed signs of growth,
recording a total production of 104,000 mt in year 2005
with a productivity of about 1000 kg/ha. From a global
perspective, the problem with a perennial crop like
rubber is that the supply cannot be regulated on an
annual basis according to changing market conditions.
Sri Lanka should therefore, adopt
a national rubber production policy. This should take
into account all aspects linked to production like planting,
harvesting, processing, manufacturing, marketing etc.
The accepted NR Production Policy should be strictly
adopted by all those who are partners in the development
of the Sri Lankan NR industry.
The estate sector with about 30% of
the rubber extent under their management should also
fall in line.
Productivity improvement
One of the important strategies that should be adopted
under this policy is to identify technologies for bridging
the gap between the present national productivity level
of about 1000 kg/ha and the achievable productivity
level of about 2500 kg/ha/year and ensure adoption of
such technologies by the estates as well as the smallholder
sector.
The first step in this strategy should
be a national survey to identify the plantings/holdings
with low productivity levels and also to identify the
cause for low productivity in such plantings/holdings.
These may be due to individual, organizational or technological
deficiencies. Having identified these, the next step
would be motivation and skills development/training
and advisory services for effective adoption of modern,
accepted production technologies, that are relevant
to the identified needs for enhanced productivity.
The mature yields and harvest index
may be increased by technologies related to exploitation.
The advent of Ethephon as a yield stimulant has also
enabled earlier exploitation of trees at girths smaller
than conventional girths.
A minimum of 50 cm was for long considered
the norm before exploitation could commence.
The current thinking is that commercial
areas could be exploited at smaller girths provided
adequate management inputs are supplied. In fact with
controlled use of low concentration of ethephon, trees
of a girth of 42 cm or over are being exploited economically
in some countries. Exploitation devices such as “RRIMFLOW”
effectively used in some countries can be used at least
in low productivity rubber plantings until a firm policy
on its use in Sri Lanka is worked out.
Replanting
A policy of phased out national replanting programme
should be formulated and strictly enforced. The estate
sector is expected to follow an annual 3% replanting
programme, but this does not happen. This sector has
a huge backlog for replanting. As the prices are attractive,
there is a tendency to prolong the replanting cycle.
A 30-year span is considered as the economic life of
a tree.
Let us not deviate from this for short-term
benefits. This is the time for the government to enforce
and encourage the growers to go for the much needed
replanting.
Planting materials with yield potential
in the region of 2,500 to 3,000 kg/ha/yr are available
in Sri Lanka. If these can replace the old trees, the
average productivity can be raised from about 1000 kg/ha
to about 2,500 kg/ha. Moreover, the newer clones are
more vigorous in growth and tappability can be achieved
12 to 18 months earlier than was seen with older clones.
Therefore, this should be considered as a national programme
and adequate replanting funds allotted to cover the
entire replanting cost and phased out replanting should
be made mandatory.
New planting
The next important strategy needed in the national NR
policy is the expansion of rubber cultivation in non-traditional
areas since new areas suitable for successful rubber
are no longer available in the traditional rubber growing
tracts for large scale production. The potential replanting
areas under some regional plantation company’s
management have gone into oil palm. The southern province
has large extents of land with vast potential for rubber
growing viz. the Moneragala, Bibile and Hambantota.
The Moneragala Rubber Development Project that has already
been set in motion aims at bringing 40,000 hectare unused
and abandoned land under rubber cultivation based on
smallholder farm model with private sector support,
phased over a 10- year period. This is expected to provide
additionally above 80,000 mt of rubber per year. Annual
targets of 5,000 hectares that has been fixed requires
sorting out of action plan and implementation to achieve
targets. With the present extent of 115,000 ha, the
planned planting of 40,000 ha in Moneragala brings the
total extent to 155,000 ha by year 2016. Still, there
is a deficit of about 115,000 ha if we are to regain
our position of 270,000 ha in early 60’s, when
Sri Lanka had been the 4th leading global rubber producer.
We have a long way to go from the present 9th position.
Uneconomical tea lands in the low and mid-country are
also potential areas for rubber planting.
Skills development /training
The success of any business depends on productivity
in all areas of its focus. Land and human productivity
in rubber plantings/holdings depend heavily on new knowledge,
technology and people skills. Technology adopted by
our competitors change rapidly and skill levels of competing
countries are quite high. In respect of productivity,
India with similar agro-climatic conditions as in Sri
Lanka occupies the leading position in global rubber
productivity, productivity achieved in 2005-2006 being
1,796 kg/ha.
The problem in Sri Lanka is lack of
new knowledge, appropriate skills and application of
modern technologies is a systematic manner.
Therefore, there is a need to develop
adequate mechanism to assess the skills requirement
of the workforce, regularly. Adequate training opportunities
will have to be provided in all sectors of the rubber
industry and for all levels of skills to meet the development
needs of the industry.
Unfortunately, many of our policy
makers and industrialists do not appear to give training
the priority it deserves. Training is only given when
there are spare resources.
When business picks up, training takes
a backseat. Training of human resources of all ages
and discipline involved in rubber development must therefore
be included as an integral part of the government’s
national policy for rubber.
Let us hope and live in hope that
the fortunes of both the rubber producers and consumers
will not fluctuate aggressively and the current boom
will continue and will not bust soon. |