Exploring

Agribusiness in Kerala:
Analysis of the Value chain of Plantation
crops in Kerala

Submitted By –GROUP 1
Varghese Mathew EPGPKCO5025
Gautham T EPGPKCO5009
Sajan U EPGPKCO5018
Sebu Zachariah EPGPKCO5019
Dilip K.Gopal EPGPKCO5007
Plantation Crops In Kerala
• Plantation Crops are Crops cultivated on extensive scale in contiguous
area.
• Main Crops in Kerala are Rubber, Tea, Pepper, Cardamom,Cocunut, oil
palms ,arecanut etc.
• These are High value commercial crops of greater economic
importance.-High export potential, employment generation,Poverty
alleviation in Rural sector.
• Some crops are under Agriculture ministry while some other are
under Commerce Ministry.
• Employs a Million Workers Direct and Indirectly
Kerala’S Agriculture-An overview
• The Share of the Agriculture to the SGDP is declining drastically. 39%
to 9.34 % in 2012-13
• Indicator of the occupational changes and in the structure of the
Economy.
• Agriculture Income Increased from 10781 cr to12197 cr ( 13%
increase)
Income Share of The Major Crops
• Share of Coconut, Tea,coffe,Paddy etc. declining.
• Share of Rubber is increasing Y o Y and has almost reached 50% .
• Increase in the Price of the Rubber in the Commodity Market led to
this.
Major Problems in The Plantation Sector of Kerala
• Increasing Cost of Labor and Welfare costs
• Low productivity Of Land and Manpower , High cost of Inputs
• Outdated Laws
• Adoption of New profitable crops to replace unprofitable crops is not
possible.
• Militant Trade unionism
• Climate Change
• Lack of Value addition Industry which can increase the Profit
• Import of Raw material from other growing countries and Lack of
protection of Local farmers.
Government Policy for the sector
• Several Committees were appointed from Time to time.
• The Guiding Principle is ‘once a plantation should always a plantation’
• Kerala Govt has constituted the Plantation corporation of Kerala Ltd HQ at
Kottayam, to accelerate the agro economic development, which owns
several Plantations in kerala.
• The sector needs concerted action by all stakeholders like growers,
employees,tradeunions,traders,researchers,government etc.
• The Kerala Law reforms act should be Modified allowing the Interchange
of different crops meanwhile preserving the pristine ecology of western
ghats.
Kerala Rubber Plantation sector
• Natural Rubber is a commercial plantation crop
from the tree species, Hevea brasiliens is grown
in tropical humid climatic conditions.

• 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.
Global Scenario
• The major NR consumers are China, India, USA, Japan, Thailand,
Indonesia and Malaysia.
• Rubber is largely perceived as a strategic industrial raw material for
defence, national security and industrial development.
• Major consuming countries keep strategic reserves of NR.
• Rubber is an internationally traded commodity
• Price of rubber is influenced inter- alia by trends in economic growth,
production in major producing countries and demand in major
consuming countries.
Major Producing and Consuming Countries
Contd
• India is 6th Largest producer of NR Rubber.( 694,000 MT)
• Traditional growing areas are Kerala and TN
• New Areas are North east,Karnataka, Maharashtra , Bengal etc.
• India is the 2nd largest consumer with a consumption of 1.1 mi MT
• The Defecit is Met through Imports and Synthetic Rubber.
Legal and Institutional Frame work
• The Rubber Act 1947 provides the development of rubber industry
under the control of union.
• The Rubber Board, headquartered at Kottayam, Kerala, under the
administration of the Ministry of Commerce and Industry has been
effectively supporting the rubber industry
• 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.
• 100% FDI is allowed in the sector
National Rubber Policy 2019
• National Rubber Policy (NRP) envisages a well-developed value-chain
of environmentally sustainable and globally competitive rubber
industry.
• India is also a Member of ANRPC(Association of Natural Rubber
Producing Countries , ), International Rubber Study Group (IRSG) , the
International Rubber Research and Development Board (IRRDB).
• ANRPC coordinate NR related issues, IRSG generate statistics on
production and consumption of NR & SR and IRRDB coordinate
research on NR and SR.
Rubber Growing Statistics
Contd..
• More than 95% of the Land holdings are < 2 Ha and below.
Rubber Value Chain
Main issues
• Low Price due to Higher Imports from Thailand and Indonesia
• High Production costs
• Lack of Skilled Tappers
• Govt has implemented an MSP of Rs 150/kg .The farmers have to
submit the Bills through Producing socities which inturn will process it
and the difference between Market price and 150 is paid to farmers
bank account directly
Key Focus Area for the revival of the sector
• Area Expansion
• Replanting of senile Area
• Productivity enhancement
• Tackling Labor shortage
• Price safety Mechanism
• More value added products Manufacturing and export
• Commercial utilization of Rubber wood
Carbon Market
• The CO2 Absobtion rate of rubber is vary high
• Production of One MT Of Rubber leads to absorption of 3.24 MT of
co2 and release 2.35 mt of o2..( studies by RRII ,Kottayam)
• Under the Kyoto protocol and Clean development mechanism (CDM),
Rubber is eligble for carbon creditsthat can be obtained and sold in
CDM Markets