A rubber replanting subsidy for all cultivators is doubled to Rs. 100,000 a hectare.

All rubber cultivators, from smallholders to plantation companies can get a Rs.100,000 subsidy per hectare for replanting, from a recently set up rubber cess fund. All rubber cultivators, from smallholders to plantation companies can get a Rs.100,000 subsidy per hectare for replanting, from a recently set up rubber cess fund.

A Rs. 49,000 per hectare subsidy was previously available to smallholders to encourage replanting, with about three percent of any given rubber land, generally replanted each year.

With increased cess funds, the subsidy has been doubled and its scope expanded to include plantation companies that account for 65 percent of total rubber output.

“Now we will be giving Rs 100,000 a hectare for all rubber planters to do replanting,” Minister of Plantation Industries, Anura Priyadharshana Yapa told reporters on Tuesday.

At the moment, the cess is fed through a five percent charge on the CIF (Cost Insurance Freight) value of imported rubber goods and Rs 4.00 from a kilo of raw rubber exports.

The charges, which kicked in last week, is expected to bring in Rs. 474 mn each year, most of which – Rs. 450 mn – will go into capital assistance for replanting.

The average cost of replanting a hectare of rubber plantation, is in the region of Rs. 250,000, the Plantation Ministry says.

Targets are to increase yield per hectare from 802 kilos of rubber per hectare, to 1500 kilos a hectare and total acreage under rubber to 150,000 ha by 2020.

The Plantation Ministry is trying to grow the cess fund to Rs. 775 mn each year, by netting in rubber product exports and domestically consumed rubber under a new tax as well.

The Ministry also wants to impose a Rs. 4.00 tax on every kilo of natural rubber goods exported and another Rs. 4.00 on a kilo of natural rubber consumed domestically.

But the Rubber Development Act will have to be amended to allow the tax on rubber product exports, with the Ministry trying to push it through within the next four months.

Rubber product exports are expected to swell the fund by Rs 229 mn from the 57,300 MT of exported rubber goods each year.

The 18,000 MT of raw rubber consumed domestically is also expected to contribute another Rs. 72 mn per year.

Bulk of the Rs. 775 mn funds will go toward replanting, with about Rs. 40 mn toward research and development, and about Rs. 60 mn to the Rubber Development Department of the Rubber Research Institute (RRI).

Local rubber good manufacturers can also access up to Rs. 10 mn from the cess fund for technology upgrades, with state institutions getting up to Rs. 30 mn.

Part of the funds will also be channelled toward subsidising the cost of rain guards to encourage its use on estates to protect the latex.

Rain guards, costing around Rs 13.65 a unit per tree, can save up to 31 percent of the crop during rains, the Rubber Research Institute says.

It also increases the number of man days for tappers, who can now also tap on rainy days and are paid by each day of work.

The Ministry is hoping to put up one third of the cost of a rain guard in an effort to popularise it, especially among smallholders.

Meanwhile, rubber prices at the weekly auctions are seeing a bull run, with prices for sheet rubber soaring at over Rs. 160 a kilo.

-LBO Newsdesk: LBOEmail@vanguardlanka.com