A letter to Agricultural Director

The kind attention of those interested in the Manufacture of quality rubber products.
 With service as its guiding motto, Quality Rubber Marketing Society (QRMS) was formed and registered under the charitable societies act with the Reg. No: T-1745/99. Its main objective is to help the members in increasing the productivity and improving the quality of rubber sheets. With the end in view, I would like to focus on the following points.
Regarding the cultivation and production of rubber, the Rubber Board has performed a highly credible role. There are several Producers Societies in Kerala, but only a few of them are functioning effectively. The reason is that they are being used only to exploit the farmer. The Central and State Governments have also been not very effective in solving the cultivators problems.
The most serious problem faced by the cultivator is the exploitation by the middlemen, as the farmer has no direct contact with the Manufacturer. Encouraging the small-scale farmer to produce high quality Natural Rubber and bring out awareness in him about grading by displaying samples of various grades, making sure that the graded rubber produced by each farmer after approval and collection by the QRMS is sold directly to the Manufacturer without middlemen are some of the goals of this Society. There should be a marking on each package to help the Manufacturer in identifying the producer for any possible defect.  It is the purpose of the Society to encourage the production and delivery of superior quality rubber to the Manufacturer and at the same time ensure a fair deal for the farmer without having any intervention by the middlemen.
The other aims of the society are listed below.
1. End the practice of buying on low quality rubber and selling it as high quality under the pretext of the visual grading system.
2. Display samples of sheets of various grades.
3. If possible, arrange for computerised grading.
4. Bring the cultivator and the Manufacturer together to solve any problem that may rise.  
5. Organise the unorganised farmers.
6. Ensure the increase in production and availability of superior quality Natural Rubber through proper tapping and processing.
7. Develop a good work force and give them necessary encouragement.
The secretary of the society who makes RSS -1x sheets provides training and co-operates with all members of the society and their workers in making similar grade sheets.
Since Natural Rubber is not available in most of the countries of the world. We can export products, that confirm to International standard, from Natural Rubber to several countries at fair prices avoiding the marketing segment taking undue advantage. This will create more employment opportunities and help to obtain a place for Natural Rubber in the world market.
(Copy of the letter sent to the Director, Agricultural extension management on 05 April 2000)              
Due to problems of grading our society has not been buying or selling rubber sheets. Clarity in grading is not there and we have pointed out this to the secretary Rubber Board vide letter No : QRMS/005/B dt 14-01-02. Since the problem till remains unresolved. We are unable to resume commercial marketing operation until proper grading criteria is made public and sample sheets are displayed at the point of purchase. We have been communicating grading criteria published by the Rubber Board as per the norms of Green Book.    
Farmers stisfaction is our motto.

MEMORANDUM OF QRMS

A memorandum of Quality Rubber Marketing Society –seeking redressel of problems of Rubber Growers. (Translated in Malayalam and published in RUBBER MITHRUM on May 2002.)
The rubber growers are facing very grave problems consequent to fall the prices of Natural Rubber and the arbitrary policies adopted by the Government in this regard.
 We the Quality Rubber Marketing Society members feel that many of the real issues can be sorted out and remedial measures initiated within the preview of Govt. provided these problems are scientifically analysed and discussed with the Rubber Growers as well as utilisers.
The memorandum enclosed points out very pertinent areas of deficiencies along with possible remedial action that can be done with in the existing frame work and jurisprudence of the Government of Kerala.
We fervently hope that the Govt. of Kerala Ministry of Agriculture, Industry, Commerce and Trade will bestow its judicious attention to the issues enumerated in the memorandum and initiate suitable actions. We also state that we as Society are willing to work with the Govt. to study these problems and finding out viable and sustainable answers.
Yours faithfully,
Secretary, for QRMS
MEMORANDUM
1. BAN OF IMPORT
We welcome the announcement of the Central Government ban on import of natural rubber. However we wish to propose that it would be extended to cover ALL FORMS OF NATURAL RUBBER including nominally or partially processed natural rubber, which is used as industrial raw material. This will prevent exploitation of certain loop holes in the present polisy.
2. PRICE FIXATION ANOMALIES
Central Government had fixed a bench mark price of Rs. 34.05 in 1998 for Grade 4 sheets on the basis of cost of cultivation. However on 12-09-2001 the minimum price of Grade 4 and 5 natural rubber was announced as Rs. 32.09 and Rs. 30.79 respectively.
(a) Cost of cultivation has gone up since the bench mark price was worked out in 1998. But the minimum price is fixed in 2001 much lower than the bench mark price.
(b) There is a need of transparency in calculation of cost of cultivation and it should tally with Reality.        
(c) Rubber Board actively encourages farmers to produce quality rubber sheets but the Central Government does not even seem to recognize Grade 1,2 & 3 sheets and so far no minimum price is fixed for these Grades.
3. ARBITRARY GRADING OF RUBBER SHEETS AND LATEX
Price fixed on the basis of Grades of the quality of rubber. But this is the dark area, which is the same cause for all exploitation of farmers as well as cheating of Govt. Although a Technical Grading Cell exists in the Rubber Board, which is supposed to enforce proper grading, it does not even supply or force to exhibit A GREEN BOOK as done elsewhere in the World. Farmers are at the mercy of unscrupulous dealers including, RUBBER MARKETING FEDERATION etc, who exploit them by unscientific method of Grading known as VISUAL GRADING. The Rubber Board requires all dealers to mandatory reports of the Grade Wise rubber procured by them every month. In fact after the declaration of the minimum price for Grade 5 even the figures of the Rubber Marketing Federation show purchase of sizeable quantities of Insufficiently Dried Sheets (IDS) and Insufficiently Smoked Sheets (ISS) at rates much lower than the Grade 5 minimum price. Rubber Marketing Federation and all co-operatives must buy only quality sheets ie up to Grade 5. This will ensure that farmers producing quality sheets are not forced to sell ISS, IDS etc. This will encourage production and trade of quality sheets and poor quality (below Grade 5) is anyway being purchased by unscrupulous private traders. Purchasing at low price any where below minimum price is also another means of paying LESS PURCHASE TAX to the State Government. A clean case of TAX EVATION. In fact a purchase tax or cess on the basis of purchased quantity at least at Grade 5 minimum price will prevent this. All these points to the need for an urgent revamp of the grading system with independent assessors including farmers representatives. A thorough enquiry into the massive fraud on farmers and Govt. perpetrated on the basis of arbitrariness in Grading is imperative. We also remind that purchasing below Grade 5 is violative of existing act, and at least Government/co-operative institution should no be party to it.
4. REDUCING THE HOLD OF - MIDDLEMEN –
It is quite evident that lack of control of the middleman/dealer is responsible for all market imperfections and exploitations. Public auction of rubber, periodically, in rural areas under the supervision of local and/or State Government will bring about transparency, tax compliance and prevent exploitation. Grading experts from Rubber Board or independent grade assessors can supervise this operation in a public auction under the eyes of all local farmers and enforcement agencies.
5. FISCAL MEASURES
Proper Grading and open transaction will effect tax complacence for the State (ie 11 percent of purchase value as tax) in addition, all finished rubber products coming in to the State can be taxed additionally to subsidies the purchase price of natural rubber. It can provide farmers in Kerala a viable means to ensure fair price for their produce and encourage rubber-based industries to be set up in the State.  
6. GOVERNMENT PURCHASE
For the long term solution of the problem it is essential to promote industrial unit based on natural rubber by offering suitable incentives including allowing a higher price, similar to SSI units, for all Govt. and public sector units purchases. Rural industries attracting workers and investments from the rubber growing sectors will help integrate the producing as well as consuming sectors of natural rubber.
7. RUBBER TECHNOLOGY MISSION
To make available cutting edge technology in rubber product manufacturing, a State sponsored technology mission to scout for sophisticated technology, design and products, should be set up in a novel manner so that it does not become another ineffective drain on State sources. Industrial ventures may be provided incentives to set up modern rubber based product manufacturing units, utilizing the know how and even joint venture offers available through this Rubber Technology Mission. In fact this could showcase technology, products and joint venture proposals with both DOMESTIC and FOREIGN participation. R&D and venture capital proposals may also be promoted through this self-financing institution.
8. RUBBER GROWERS WELFARE AND INSURANCE FUND
To cater to appropriate needs of the rubber producers/growers, a welfare fund with contribution from industry which uses rubber, Central and State Governments as well as the growers themselves should created with novel financing schemes and programs including PRICE INSURANCE, and even FEATURE TRADING.
9. A STUDY ON THE ROLL OF RUBBER BOARD
An appraisal of the changes required in the roll of the Rubber Board on the basis of its organizational structure, conduct and performance is urgently called for so that public money is effectively and efficiently utilized to achieve stated objectives which change with time.
10. REPRESENTATION OF FARMERS ORGANISATIONS
In all bodies concerning farmers, representative of farmers organizations (not full time politicians) would find representation, to settle the inequalities, inadequacies and imbalances in all areas of rubber production, marketing and trade. Eg. Agricultural Prices Board of State Government.

PRESIDENT               SECRETARY                  TREASURER


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A LETTER TO THE PRINCIPAL SECRETARY, MINISTRY OF FINANCE
GOVERNMENT OF KERALA
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Madam
Sub: Memorandum of QRMS regarding transparency in grading of Rubber Sheet and remedial action – Submission of evidences – called for Tax Evasion by rubber sheet procuring agencies.
The following documents press release and other paper evidence of our contention in the memorandum dated 03-04-2002 regarding arbitrary grading and Tax Evasion of rubber sheet procurement agencies in Kerela are submitted for favor of suitable remedial action.
1. Bills (Photostat) issued by Kerala State Co-operative Rubber Marketing Federation, Thiruvananthapuram (Evidence of purchase effected at Rs. 21 to 27/- per kg from Mr. S.Chandrasekharan Nair, for 151 kgs during 12-01 to 02-02, while the grade 5 sheet prise was fixed at Rs. 30.79)

2. Press Release Rubber Board dated 25-09-02 Mathrubhoomi – stipulating that the sheets are graded as per GREEN BOOK and price are fixed. (Evidence to bring home that green book is the basis of grading sheets and that green book based grading is to done in all procuring centers). Since this is not done they have created scope for arbitrary grading.

3. Litigation against Marketing Federation for purchasing sheets below the minimum support price from Mr. Baby Cyriac, Kozhuvanal Vadakkekattu, Pala – paper cutting Mathrubhoomi dated 08-12-01.  
REMEDIES SUGGESTED
1. DISPLAY OF GREEN BOOK: Green book should be displayed in all procurement centers and grading is to be made as per the green book, to prevent procuring sheets as IDS and ISS. This assures the due price for the sheets to the farmer as well.
2. PURCHASE TAX IS TO BE LEVIED/KG PROCURED RUBBER: The purchase tax is levied at present based on the price offered to the farmers at the time of procurement of sheets by the purchaser.  When the procurement price is below the fixed minimum support price there is huge TAX EVASION resulting in very heavy loss of income to Government. This can be done away with if purchase tax is levied per kg weight of the procured sheets. In that case what ever may be the price of the procured sheets, the tax being due to Govt. cannot be denied since the tax is assured is done based on weight.
3. PUBLIC AUCTION OF RUBBER: It is quiet evident that lack of control of the middlemen dealer is primary responsible for all market imperfections. Public auction of rubber periodically, in rural areas under the supervision of local and /or State Govt. will bring about transparency, tax compliance and prevent exploitation. Grading experts from Rubber Board  or independent grade assessors can supervise this operation in public auction under the eyes of all local farmers and enforcement agencies. Agricultural and rural development department along with taxes department should arrange these periodic auctions as per market requirement so that demand and supply are streamlined. Panchayat should provide the infrastructure at the local level. Farmers should be allowed to unload their sheets as it may otherwise, lead to another kind of exploitation.

Yours faithfully
Secretary, QRMS      
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Ref No 11090/CM/2002
Dated 29/05/2002
Forwarded to SECRETARY, AGRICULTURE
Respected Sir/Madam
We welcome the decision and welcome the announcement of the Kerala State Govt. to postpone recovery proceedings of FARM LOAN ARREARS from farmers in the State till the end of June 2002. We expect definite and effective implement action of the Govt. decision urgently.
We represent small and medium rubber farmers who have been struggling for survival due to the adverse price condition prevailing in this State during the last few years. We wish to bring to your kind notice a few points regarding the farm loan particularly related to rubber cultivators. We urge immediate action staying all recovery measures of farm loans distributed through Co-operative Banks and Nationalised Banks until effective alternate solution are worked out and put in force by the Govt.

20-05 02                      Yours faithfully
Thiruvananthapuram     Secretary

QUALITY RUBBER MARKETING SOCIETY THIRUVANANTHAPURAM
URGENT MEASURES CALLED FOR ON FARM LOANS
1. QRMS welcome the Govt. who acknowledged the plight of  farmers and taken the decision to defer/postpone loan recovery measures till the end of June 2002. But many of our members are already bring threatened by Co-operative Banks and Nationalised Banks with recovery measures including publication of list of defaulters in newspapers and subsequent action immediately. Neyyattinkara Co-operative Agricultural and Rural Development Bank has fixed this deadline as May 2002. Immediate direction from the Govt. to the Managing Director at the head office at Thiruvananthapuram (opposite to the Secretariat) and Secretary Neyyattinkara Co-operative Agricultural and Rural Development Bank are necessary to postpone recovery measures. Confidence of farmers that this Govt. really intends to help them can be established only through such specific expeditious action.
2.    Rubber availed in late 80 s and 90 s were based on certain projections of price and income indicating repayment capacity of farmers. But it is common knowledge that these projected figures were never achieved.
FARMERS ARE  NOT WILLFULL DEFAULTERS.  They need to be helped with possible measures enabling them to repay all arrears without Bank/financial institutions suffering any loss or liability. We suggest a few such possible steps to be initiated and implemented by Govt. in this regard.
(a) REPAYMENT HOLIDAY may be declared for two years on all current farm loans like Rubber Planting Loans.
(b) SPECIAL DEBT CLEARANCE ASSISTANCE LOANS. Depending upon the current valuation of land security and any other securities special loans from same Bank/financing institution willing to offer such loans to clear existing loans must be offered to farmers on the basis of the initiative taken by Govt.
 This will (a) help farmers to repay all outstanding arrears/clear current loans avoiding                  harassment.
(b) help farmers avoid penal interest and high rate of interest prevailed earlier on current loans.
(c) help farmers who have pledged their entire farm land to avail loans many years ago and have paid up a good portion of the loan already to avail assistance to carryout necessary current work on the land or acquire capital assets including tools implements, machinery, smoke house, storage sheds, houses, industrial machinery etc. On the strength of land-security and any other securities already pledged for earlier loans. This will help to overcome stagnation in farm investment, increase productivity and modernize the farm sector.
(d) Enable to get full repayment on existing loans reducing their Non-performing Assets (NPA) drastically.
(e) Establish the changing roll of Govt. as an effective facilitator rather than being a meager trivial provider (subsidies etc.) without any financial burden what so ever.
At least Co-operative Banks can be directly influenced by immediate State Govt. directions. NABARD can be requested to initiate steps in this matter. Central Govt. assistance as well as direction to Nationalised Banks/Financial Institutions must be secured  and utilized for this purpose.
3. FARM LOAN ADALAT  

Many of the unorganized less educated farmers are being exploited by unscrupulous Bank Officials and even Bank themselves. Financial organizations such as Banks, Rubber Board, RBI etc must be brought together along with aggrieved farmers by State/local Self Govt. to settle grievances in an open and transparent manner before conciliation an appellate authority so as to prevent exploitation of farmers and subjecting them to unwanted legal proceedings and harassment, by even utilizing State Govt. machinery such as Co-operative Department Officials etc.
4. OPEN SEMINAR ON FARM LOANS
This will make farmers aware of existing farm loans with all relevant details as well as the help of Govt., Banks/Financial Institutions policy advisory bodies and institutions (eg- Rubber Board)  to cater the changing needs of farmers. Any required change in Govt. assistance/policy will become evedent.
5. A REWARD SCHEME

A reward scheme to those Institutions or individuals may be introduced in favor of honest farmers who actually spend the loan finance to the real purpose. This will also reduce corruption promoted by unscrupulous Bank Officials and dishonest people who use Bank Loans for illegitimate/non-bonafide uses. Unless a reward system is introduced no one will have the incentive to bring such facts to light. Govt. will be immensely supported by such watchdog action from society at large.
We once again repose faith in this Govt. to help ameliorate the poor condition of farmers and help them to overcome their farm loan debt problems in an honorable and honest manner with out being subjected to harassment, humiliation and suicide.

20-05-02 Secretary
Thiruvananthapuram         For QRMS  
(This matter published in RUBBER MITHRAM on July 2002)    

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Ref No. QRMS/008/------/B                     Date – 27-01-03
To
40 Officials were invited
Respected Sir/Madam
Rubber cultivators in Kerala have been going through very difficult time since a few years now. Their problems have been highlighted by the media and discussed in many public forums. Steep fall in the price of Natural Rubber since 1977 is the root cause of the problems. But other problems including grading exploitation by the dealers have been identified, brought to the notice of those concerned and partially rectified.
One of the most important problems faced by almost all farmers is the problem regarding their Rubber Development Loan availed from various Banks. NABARD in collaboration with Rubber Board utilizing World Bank Funds, has been providing refinance to the Banks which provide loan finance to the farmers at very reasonable terms. But there are many problems faced by both the farmers and the Banks in the implementation and on loans repayment. It is common knowledge that farmers are willing to repay their loans but need help to do so.
We wish to organise a meeting at 2 PM on 15 Feb 2003 at Thiruvananthapuram of farmers and officials NABARD, Rubber Board, Banks and the Govt. to look into the problems on a overall as well as case by case basis and evolve remedial steps. We hereby invite you to participate in this function in your official capacity so that meaningful and definite results are obtained.
Thanking you
Yours faithfully
Secretary, QRMS

We are thankful to Sri. B.R.K.Murthy, Dy. Dir/N.H.B./Thiruvananthapuram and Sri Hariharan retired Jt. R.P.C, Rubber Board for participating in this function.      

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