James Jacob, former director of the Rubber Research Institute of India, talks to Down To Earth on the proposed amendments
The Union Ministry of Commerce and Industry has proposed to repeal the Rubber Act, 1947 and replace it with the Rubber (Promotion and Development) Bill, 2022.
Removal of ‘archaic provisions’ to create an environment for ‘easy conduct of business’ and to reorient the functions of the Rubber Board were cited by the commerce department as the reasons for introducing a ‘modern legislature’.
Shuchita Jha from Down To Earth talked to James Jacob, the former director of the Rubber Research Institute of India, Rubber Board, on key changes and how they will impact the rubber growers of the country.
Shuchita Jha: How is the Bill different from the Rubber Act of 1947?
James Jacob: The Bill brings natural rubber, its cultivation, rubber plantations, rubber wood and all associated agricultural activities under the ambit of the rubber industry. This is a major change from the Act which did not define rubber cultivation as an industrial activity.
Rubber plantations will be under the Union or Concurrent List by default once the Bill is passed.
One cannot be sure if this was the intention but the possibility is real. It may still require a constitutional amendment. One thing is clear: Once adopted by the Parliament, this provision will have important constitutional implications.
The Act had a provision that mandated the central government to consult the Rubber Board on important matters. This provision has been dropped, eroding the board’s functional relevance and authority.
SJ: What will be the implication of the Rubber Boards’ reduced advisory role? Does the bill propose changes to the composition of the Rubber Board?
JJ: The Bill gives the central government authority to supersede the Rubber Board. The central government can take its own decisions without consulting the Rubber Board and implement them through any person(s) (industry) it wants.
The central government can exempt any industry from having to register with the Rubber Board and seeking a trade certificate. The exempted industry doesn't have to file returns with the board.
This will create anarchy as the board will have no clue of the vital statistics. Possibly this route will also be used for importing rubber.
While reconstituting a fresh board (at the end of the superseding period), the Bill says the Centre can pick and choose members from the previous board. It states that members of the previous board will be eligible to become members.
But the government can conveniently avoid inconvenient members. The Bill gives unbridled power to the Centre.
The Rubber Board will become a mere rubber stamp. No more free and fair debates of new ideas. Board will have to toe the “official” line. No functional autonomy. This defeats the whole purpose of having a Board.
SJ: The bill has defined rubber plants, estates, production and wood as rubber industry. What are the consequences of this?
JJ: Declaring rubber cultivation as an industry has many domestic legal implications. For example, if the rubber plantation is not considered by the courts as agricultural land there can be very far-reaching implications for bank loans, pledging and other.
By explicitly defining rubber cultivation as an industrial activity, the government is once and for all closing the doors of renegotiating with the WTO to make rubber an agricultural product. This would have been the best deal for rubber growers (but not necessarily for the industry).
Once the Bill is passed, by default the rubber plantations will come under the Union or Concurrent List.
SJ: Can you throw some light on the quality standards mentioned for produced and imported rubber?
JJ: The Bill said ‘quality standards will be “implemented” for all rubber produced in India and imported to India’. But it also adds that ‘quality standards will be “enforced” for rubber produced in India’, not for imported rubber.
Is this contradiction / confusion inadvertent is the question many are asking. Making confusing and apparently contradictory provisions will only help those who want to fish in troubled waters. One wonders whether due care and diligence have been taken to draft the proposed Bill.
“The question of quality of imported rubber should be seen in the context of the huge pressure from very high levels on the Bureau of Indian Standards (BIS) and the Rubber Board to agree to import low-quality cup lumps.
The lumps are a form of unprocessed, often decaying natural rubber of uncertain quality. The above “provision” will make it easy to import poor quality, cheap rubber.
Imports will be essential if we do not produce enough rubber in the country. Alternatively, there will be more consumption of synthetic rubbers, because the country needs to consume more rubber and the rubber industry is a significant driver of the national economy.
Demand for rubber will more than double in the next decade and triple by 2040. Domestic rubber production was almost enough to meet the demand until about 10 years ago. Now, rubber deficit is more than 45 per cent and this is bound to go up in the years ahead (even as unproductive old / senile plantations are not getting replanted). The Bill does not provide a framework for timely replanting of plantations once they cross their economic life.
SJ: Does the Bill protect the interests of the growers?
JJ: The new Bill states that equal focus will be given to rubber production and industry, but the truth, as evident from the provisions of the Bill, is that the Bill is highly lopsided, favouring the industry and harming growers’ interests.
Though the Bill defines a ‘grower’ as one who owns the estate, it is not the case. The mean size of a rubber holding is hardly 0.5 hectare. Rubber growers are small and marginal farmers, and safeguarding their interests is crucial to sustaining rubber production in the country. Natural rubber cultivation gives livelihood to more than 1.3 million households.
There is nothing in the Bill that will help the grower, but there are several provisions that will hurt them. The Bill provides for fixing minimum / maximum price for rubber. The grower does not need a minimum price, but a fair price. The Bill does not provide for fixing fair price.
Also, if and when the domestic market falls below the fair price, the Rubber Board should be allowed to buy and export rubber to provide relief for growers. The Act had a provision enabling the Rubber Board to procure rubber and export, but this provision has been removed in the Bill. Fixing the maximum price will only help the industry, not the grower.
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