Rubber replantation subsidy may be hiked to Rs 24,500/ha

The Central subsidy for replanting rubber is likely to be enhanced to Rs 24,500 a hectare in the 11th Plan period against Rs 20,000 in the previous Plan.

The finance committee of the government is yet to approve the hike in subsidy and an announcement to this effect is expected soon. The subsidy, when enhanced, would work out to 25 per cent of the per hectare development cost.

Earlier, the Rubber Board had proposed a rise in the subsidy to Rs 30,000 a hectare, but the government had asked to reduce it to the lowest because of a spurt in prices in the last couple of years.

The board had also proposed to enhance the subsidy for new plants to Rs 24,500 a hectare. But, it is not likely to happen and the subsidy for new plants is set to remain at Rs 12,000 a hectare.

The government considers that the recent spurt in prices are an encouraging factor for growers and sees no justification in a steep increase in the subsidy.

The board had submitted a scheme of Rs 580 crore for the overall development and modernisation of rubber plantation in the 11th Plan period.

The proposals include a special scheme for developing rubber cultivation in non-traditional areas, especially in the North-East, agro management units for demonstration, soil protection and water harvesting, processing and quality upgrade, human resources development and training programmes.

The government may not press for the commerce ministry's proposal to introduce a Special Purpose Rubber Fund (SPRF) for new plantation and replantation.

The Rubber Board had explained the difficulties in implementing the fund and convinced the government that the present subsidy scheme would serve the purpose.

According to the SPRF, the Nabard would finance Rs 200 crore to the board, which, in turn, would provide loans to farmers. But the board had pointed out that as the number of growers crossed 1 million and most of the plantations were small in size, the fund would not be practical, as growers would have to pledge their title deeds with the Rubber Board. Instead, the board had proposed to continue with the Rubber Plantation Development Scheme, introduced in 1980, with an enhanced subsidy.

The Rubber Board has set a replantation target of 50,000 hectare during the 11th Plan period against the target of 35,000 hectare during 10th Plan. However, only half of the target (17,000 hectare) was met in the 10th Plan period.

The Rubber Board sources said higher prices of rubber in the last 3 years had slowed down replanting, as growers were eager to tap the maximum benefit of appreciating prices. The board expects to meet the target in the 11th Plan with an increased subsidy. Rubber plantation in the country is spread across 607,000 hectare in seven states.

Growers, meanwhile, said the proposed increase in subsidy was insufficient, as the per-hectare cost of replanting was around Rs 100,000. The farmer would not get any returns for the next 6-7 years after replanting. But, he had to spend a fairly large amount for nursing the plants. They demanded the subsidy to be raised to Rs 100,000 a hectare.