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Rubber futures to be regulated: Jairam Ramesh

Staff Reporter

Says rubber producing societies should be direct participants in futures trading

KOTTAYAM: Union Minister of State for Commerce Jairam Ramesh has stressed the need to make the rubber producing societies, direct participants in the futures trading in natural rubber, to make them more farmer friendly and said tighter regulations are in the offing to bring to an end to its negative influence in the indigenous rubber prices.

Speaking to media persons here at the Indian Rubber Research Institute (IRRI) after consultations with the Rubber Board authorities, Mr. Ramesh said under the prevailing circumstances, rubber growers were not directly benefited by the operations of the futures market in natural rubber. Instead, it was the middlemen who were taking advantage of the system, he said.

"The answer is not in doing away with the futures market, but in making farmers participate in the futures market, tightening the regulations and in ensuring physical delivery of the commodity," Mr. Ramesh said.

The Rubber Board has been asked to finalise a project to make the rubber producing societies direct participants in the futures market, he said.

Presently, the physical delivery is only 2 per cent of the total volume transacted by the futures market and this clearly shows that the futures market is dominated by middlemen, he said.

The Abheejit Sen Committee constituted by the Union Government will look into the functioning of the futures market in essential commodities and the futures trading in natural rubber will also witness the changes, he said.

Cashew Board

The Union Government was keen to constitute a Cashew Board and this will be modelled on Rubber Board which has succeeded in vertically integrating all operations, including production, marketing and extension, Mr. Ramesh said.

He said the Rubber Board model should be replicated in other sectors too as it has been highly effective in the growth of rubber plantation industry.

India has now emerged as the world leader in rubber productivity though it has only the fourth place as far as volume of production was concerned.

During the 11th plan, the proposal is to hike the subsidy content from the current 20 per cent to 25 per cent, he said, reacting a query. An area of 34,000 ha would be replanted, especially in the north eastern States, during this period, he said.

Rubber Board chairman Sajan Peter was also present on the occasion.

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