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100 Expected Questions

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Economy

National Rubber Policy 2019

National Rubber Policy 2019

Relevance:

  • GS 3 || Economy || Industries || Cottage Industries

Goal

  • National Rubber Policy (NRP) envisages a well-developed value-chain of environmentally sustainable and globally competitive rubber industry, comprising natural and other forms of rubber and products thereof and ancillary sectors, capable of supplying materials and products of international standards to domestic and world markets, with focus on welfare of the entire stakeholder community and national economic progress.

Objectives

  • Sustainability: To promote overall sustainability of the Rubber Industry with respect to economic, social and environmental dimensions.
  • Value chain: To provide required focus towards development of the entire Rubber Industry value chain from upstream production to downstream manufacturing activities.
  • Area under cultivation: To strategize towards increase in area under Natural Rubber by new planting without causing any adverse impact on forests/natural ecosystems and food security.
  • Productivity: To facilitate increase in average national rubber productivity through appropriate agro-management practices including systematic replanting and ensuring better income for the growers.
  • Raw material requirement: To strategize towards meeting of raw material requirement of domestic industry through domestic production as far as possible.
  • Quality of processed forms: To promote activities for ensuring quality of processed forms of NR at par with international standards.
  • Exports: To promote the development of rubber product manufacturing sector and facilitate export of quality rubber products.

Global Scenario

  • Commercial plantation crop: Natural Rubber is a commercial plantation crop from the tree species, Hevea brasiliens is grown in tropical humid climatic conditions.
  • Major producers and consumers: Thailand, Indonesia, Malaysia, Vietnam, China and India are the major NR producers globally.
  • The current world production and consumption of NR is around 12.40 million tonnes and 12.60 million tonnes respectively.
  • The major NR consumers are China, India, USA, Japan, Thailand, Indonesia and Malaysia.
  • Strategic industrial raw material: Rubber is largely perceived as a strategic industrial raw material and accorded special status globally for defence, national security and industrial development.
  • Major consuming countries keep strategic eserves of NR. Rubber is an internationally traded commodity and price of rubber is influenced interalia by trends in economic growth, production in major producing countries and demand in major consuming countries. Domestic NR prices generally follow the trends in the international market and is therefore, subjected to fluctuations in price.

India

  • India is currently the sixth largest producer of NR in the world with one of the highest productivity (694,000 tonnes in 2017-18). The production capacity in India is around 900,000 tonnes, of which around 75% is tapped. Out of the total area under rubber in India of around 822,000 ha, 614500 ha is a mature yielding crop.
  • Traditional and non-Traditional regions: Traditional rubber-growing states comprising Kerala and Tamil Nadu account for 81% of production.
  • Major non-traditional rubber growing regions are the North Eastern states of Tripura, Assam and Meghalaya, Odisha, Karnataka, Maharashtra and West Bengal.
  • Sheet rubber is the most preferred form of processing accounting for around 70% of processed rubber. Block rubber and latex comprise17% and 12% respectively of rubber production in the country.
  • India is the 2nd largest consumer of NR globally with current consumption of around 1.1 million tonnes.

Export

  • Huge potential: NR is not a traditional export-oriented commodity, more so because of the current deficit in production. Export of NR happens to adjust temporary demand-supply imbalances in the NR domestic market. There is a huge export potential for rubber products in the country, which if promoted, shall indirectly increase the demand for domestic NR as also the export earnings. Export from rubber products was worth 20,915 crores in 2017-18.
  • India is the 2nd largest consumer of NR globally with current consumption of around 1.1 million tonnes. Sheet rubber, block rubber and latex account for 47%, 43% and 8% respectively in NR consumption. Around 40% of the total NR consumption in India is at present met from import of rubber. 68% of NR consumption in India is in the automotive tyre sector.

Legal and Institutional Framework in India

  • Rubber Act, 1947: The Rubber Act, 1947 provides for the development of the rubber industry under the control of the Union.
  • Rubber Board: The Rubber Board, headquartered at Kottayam, Kerala, under the administration of the Ministry of Commerce and Industry has been effectively supporting the rubber industry since seventy years by undertaking /assisting /encouraging scientific, technological and economic research, providing training on improved methods of planting, cultivation, manuring and spraying, giving technical advice to rubber growers, improving marketing of rubber, compilation of statistics etc.
    • Considerable investment from the Central Government has been made in the last seventy years for providing financial support, advisory and regulatory services through the Rubber Board as per the requirement from time to time.
    • Provisions of Central and State level legislations and rules thereof relating to taxation, forests, land use, environment, pollution etc are also applicable to rubber sector.
  • Foreign Direct Investment (FDI): For promotion of rubber sector, Government of India has allowed 100% Foreign Direct Investment (FDI) in plantations of rubber, coffee, tea, cardamom, palm oil tree and olive oil tree.

Mains question

  • Examine whether the proposed National Policy on Rubber reflect the real concerns of all stakeholders in the sector and protects the livelihoods of rubber growers in the country.