SRI LANKA: Govt. to offer guaranteed price for rubber

Plantations Industries Minister Mahinda Samarasinghe said the government has taken a policy decision to offer a guaranteed price for rubber following a request by his ministry to the President, the Economic Development Minister and the Treasury Secretary.  The decision comes in the wake of a marginal fall in rubber prices in the open market in recent times.

Minister Samarasinghe said the guaranteed price will be decided following talks with smallholders and other stakeholders and this would be announced by the Finance Ministry shortly. "If the market price falls below the guarantee, then the guaranteed price will prevail. In such a scenario the government will shoulder the balance payment to give the farmers the stipulated price," he added.

The minister charged that the opposition today was trying to use the sudden drop in rubber prices as a political slogan, especially in the Moneragala district, slated to go for polls on 20 September. Describing this as a petty attempt, Minister Samarasinghe said the opposition's claim that the price drop was due to the imports of raw rubber was misleading. "The raw rubber imports which is less than 10 % are only for the most essential purposes. It does not have any impact on price decline," he added. According to the minister, 75 % of the local rubber production is bought by local companies, which produce value added products for both local and export markets. In addition, 25 % is exported as raw rubber to a few countries with a higher tax where Pakistan and Malaysia are the main buyers.

The minister pointed out that since Sri Lanka holds onto two percent of the global market, it was difficult for the country to have a significant impact on the price fluctuations. Minister Samarasinghe said that increasing production and improving local industries which use raw rubber to produce value added products was the way forward to maintain a stable price for rubber.

While refuting opposition charges, he said that no government had done more to uplift rubber cultivations and rubber smallholders than the incumbent one. Explaining the government's initiatives to expand rubber cultivation and increase productivity, Minister Samarasinghe said that using modern technology is being promoted among farmers to achieve maximum productivity. He said efforts are being made to expand cultivations, especially in non-traditional rubber plantation areas to meet the increasing demand for rubber.

Source: “Daily News”, Colombo; 2 Sept 2014
(Syed Rashid Ali, Karachi, Pakistan)