Namrata Thapa, PhD Scholar,Centre for Development Studies
Trends in Performance indicators of Natural Rubber
Trends in Area, Production and Yield
An increase in crop production can be derived from three main sources: expansion of arable land,
increases in cropping intensity (the frequency with which crops are harvested from a given area)
and improvements in yield (FAO, 2002). Plantation crops are essentially perennial crops. Unlike
annual crops, perennial crops are characterized by a long gestation period between initial inputs
(planting) and first output (yielding), an extended period of output flows from the initial
production and eventually a gradual deterioration of the productive capacity of the plants (French
and Matthews, 2001). As such cropping intensity is not an important component of plantation
crop production but yield growth and area growth comprises other important components.
Considering the production of Natural Rubber (NR), India stands as the fourth largest producer
of NR in the world. It contributes to nine per cent share in the world production after Thailand,
Indonesia and Malaysia (Economic Review, 2012). The highest level of production of 913
million kg was achieved by NR in the year 2012. However, it witnessed a sharp fall to 846 kg in
2013. Thus in 2013, the annual growth rate in production registered a decline of 7.4 per cent over
the previous year. It is observed to be the sharpest decline since 1990s (see figure 1).
Figure 1: Production of NR (1990 to 2013)
10.0
5.0
0.0
-5.0
-10.0
production
annual growth rate in production (in
percent)
15.0
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
production (in Kg)
1000000
900000
800000
700000
600000
500000
400000
300000
200000
100000
0
annual growth rate in prod(%)
Source: Various issues of Indian Rubber Statistics, Rubber Board
Unlike the growth rate in the production of NR, the tapped area is observed to have registered
positive growth rate over the years (see figure 2). So going by this trend, we are directed to
consider another component of production which is the yield of NR.
7.0
500000
6.0
5.0
400000
4.0
300000
3.0
200000
2.0
tapped area
annual growth rate in tapped area(%)
Source: Various issues of Indian Rubber Statistics, Rubber Board
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
0.0
1993
0
1992
1.0
1991
100000
annual growth rate in tapped area (%)
600000
1990
tapped area (in hectares)
Figure 2: Tapped Area (1990 to 2013)
India occupies first position in the world in terms of yield of NR1. It was as high as 1841 kg/ha
during 2011-12. However, figure 3 shows a steady fall in the yield during 2012 and 2013. The
growth rate in yield has declined from 1.9 per cent in 2011 to -1.5 per cent in 2012 and further
down to -9.9 per cent in 2013. In fact, a comparison of figure 2 and figure 3 shows that the
growth rate in production has followed a very similar trend as the growth rate in yield over the
years. This indicates that yield has been an influential factor in the production of NR. Hence, in
the discussion that follows, we consider the trends in yields across the growing regions and
holding size to get a deeper insight.
10.0
8.0
6.0
4.0
2.0
0.0
-2.0
-4.0
-6.0
-8.0
-10.0
-12.0
yield
annual growth rate in yield (in per cent)
2000
1800
1600
1400
1200
1000
800
600
400
200
0
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
yield (kg/ha)
Figure 3: Yield of NR (1990 to 2013)
annual growth rate in yield(%)
Source: Various issues of Indian Rubber Statistics, Rubber Board
The contribution to production of NR mainly comes from southern state of Kerala in India.
Among other historic reasons, the dominant position of Kerala in terms of rubber cultivation is to
a large extent on account of the favourable agro-climatic conditions compared to other states
1
Based on FAO data on yield of major NR producing countries in the world such as India, Indonesia, Malaysia,
Thailand and Vietnam.
(Mani, 1984). In 2010-11, Kerala accounted for 75 per cent of the area under rubber in the
country. Its share in total NR production in the country was around 89 per cent in 2010-112. In
2010, the total area under rubber cultivation was around 7 lakh hectares spread across the state of
Kerala, Tamil Nadu (referred to as the traditional region) and North eastern states3 and other
states4 (together referred to as the non-traditional region). Since already much of the suitable area
has been planted with rubber, the scope for further expansion in traditional area (especially in
Kerala) is very limited. To overcome this problem, experimental and trial plantations were
carried out in the 1960s and 1970s which revealed that large-scale expansion of rubber
cultivation can be undertaken successfully in the non-traditional regions in the country (Burger et
al., 1995). As a result, there was significant expansion in rubber in the non-traditional regions,
especially in the North Eastern states over the past two decades in particular. The trends reveal
that during 1991-92 to 2010-11, the trend growth rate of planted area in traditional region was
1.1 per cent as against 5.2 per cent in the case of non-traditional region. But given that the
planted area in non-traditional regions are yet to reach the yielding stage, yield is found to be
higher (kg/ha) in the traditional region than in the non-traditional region (Figure 4). This can
indeed be an indication that the rubber growers in the non-traditional regions are yet to reap the
full benefits from the interventions and institutional support extended by the Rubber Board
which can be expected to take some years to have an impact on yield. Over the years, yield in
non-traditional region is seen to have averaged around 1000 kg per ha.
Figure 4: Yield (kg/ha) in traditional and non-traditional rubber growing regions in India
2
calculated from Indian Rubber Statistics 2010-11, volume 35
North eastern states include Tripura, Assam, Meghalaya, Nagaland, Manipur, Mizoram, Arunachal Pradesh.
4
Other states includes Karnataka, A&N Islands, Goa, Maharashtra, Orissa, West Bengal and Andhra Pradesh
3
2500
yield (kg/ha)
2000
1500
1000
500
0
traditional region
non-traditional region
Source: calculated from Indian Rubber Statistics, Vol 35. 2012
Coming to holding size, it is pointed out that one of the most remarkable structural changes in
the NR sector has been in terms of preponderance of small holdings 5 since the mid-1950s
(George et al., 1988). Considering the size distribution of area among small holders and estate, in
2010, small holdings accounted for 90 per cent of area and contributed to 93 per cent of
production. There are 1.20 million small holdings. The average size of a small holder is only
0.54 ha. Among the small holdings, around 78 per cent of the area under rubber was less than 2
hectares while, it was only 22 per cent in 1955. These trends indicate that production is taking
place on increasingly smaller holdings.
The yield of small holdings increased from 675 kg per ha in 1990 to 1253 kg per ha in 2010 at
the rate of 3.19 per cent while the yield of estates increased from 787 kg per ha in 1990 to 836 kg
per ha in 2010 at the rate of a mere 0.26 per cent. Figure 5 shows that though the yield of the
estates was slightly higher than that of small holdings in the initial years (1990-92), thereafter the
yield of both the land sizes were more or less the same; in recent years (2002-03 to 2010-11), the
yield of small holdings is higher than that of the estates. However, since 2005-06 onwards, yield
of both small holdings and estates are observed to have registered a gradual fall.
Figure 5: Yield (kg/ha) of small holdings and estates
5
Small holdings are those with area below 10 hectares while estates are those with area above 10 hectares.
1600
1400
yield (kg/ha)
1200
1000
800
600
400
200
0
yield(small holdings
yield(estates)
Note: yield is calculated by dividing total production by total planted area rather than tapped area as the data on
tapped area was not available for holdings and estates. So the figures may be an underestimation.
Source: calculated from Rubber Board data, http://rubberboard.org.in/rubberstaticsdisplaypage.asp
In the initial years, the increase in the growth rate in yield has basically been attributed to
sustained research and development activities being carried out by the Rubber Board coupled
with extension and advisory services and transfer of technology to the fields (Rangachary, 2006
as cited in Varkey and Kumar, 2013). Particularly, the development of the high yielding variety
(HYV) planting material RRII 105 in the 1970s and its official release by the Rubber Board in
1980 for commercial planting can be mentioned in this regard. There was a comparatively higher
adoption of the new variety by the dominant small holding sector which has significantly
transformed the viability of rubber cultivation. The yield profile of the crop have experienced a
vertical shift on account of a relatively higher realized and potential level of yield of the clone
and incentives for the adoption of the clone contained in the integrated Rubber Plantation
Development Scheme (RPDS) since 1980 (Kumar and Sharma, 2006). However, Mani and
Santhakumar (2011) found that area under high yielding planting materials which can be
considered as the most proximate and important technology variable taken as a proportion of
total area had stagnated from 1990s onwards indicating that its diffusion has reached a saturation
point. Thus it can be argued that though the yield of NR is the highest amongst the NR producing
countries6, in recent time particularly since 1990s, the trend in diffusion of HYV planting
material have stagnated thus having a decelerating effect on growth rate of yield.
Notwithstanding these activities undertaken by the board, when we are discussing about yield, it
needs to be noted that in case of perennial crops such as rubber, even the age profile of existing
stock of trees affects yield per hectare and thus total output in any given period (Bateman, 1965).
The yield cycle of rubber involves broadly four phases. There is an initial pre-bearing phase of
about seven years, followed by an early harvesting phase of about one to three years wherein
yield is positive and increasing with high variability. Then comes the third phase which can be
termed as peak bearing phase and it lasts for about four to 13 years wherein the yield reaches the
highest level. In the last phase, there is a decline in yield. Since the age of the plant, interalia, has
a crucial bearing on the yield, timely replanting of the plants is required (Joseph and George,
2010). Keeping this in mind, replanting scheme has been proposed by the board and the basic
objective of this scheme is to induce the growers to undertake timely replanting such that the
shares of old age plants are reduced to minimum level. However, an enquiry of the age
distribution of NR suggests that there has not been any marked decline in the share of old aged
plants7); instead their share has increased significantly overtime from 1980 to 2011 (Figure 6).
This result is in line with the finding of Joseph and George (2010). Further, during 1980 to 2011,
the growth rate of area below seven years of age was mere 0.39 per cent while that for area
above 20 years of age was as high as 3.65 per cent. This questions the effectiveness of the
replanting scheme in influencing the decision of the farmers to go for replantation8.
Figure 6: Distribution of Area according to age structure of rubber plantation
6
The NR producing countries are Thailand, Indonesia, Malaysia, Vietnam, China, Sri Lanka, Philippines,
Cambodia.
7
Normally, life cycle of a rubber tree comprises 7 years of immaturity (non-yielding) period and 8 to 20 years of
yielding period. Here old age plants are considered as those over 20 years of age.
8
For instance in Kerala, the relevance of replanting subsidy has been losing its importance. Majority of the second
and third generation farmers are not necessarily attracted by the replanting or new planting subsidies, especially as
in most cases, the provision of subsidies are certainly linked to removal of non-rubber trees from the land areas
where newplanting/ replanting is undertaken. Suppose, a potential rubber grower wants to undertake replanting or
newplanting with rubber, but he also have several valuable trees standing in that plot. In such cases, since the
existing subsidy policy insists on removing such plants, this may not be agreeable to most growers who value the
worth of the co-existing trees in the plot. (The author is thankful to the external evaluator for this insight).
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
0%
<=7 yrs
8-14
15-20
20+
Source: Computed from Various volumes of Indian Rubber Statistics, Rubber Board of India.
The inverse relationship between yield and proportion of area under old age plants in total
planted area is clearly evident from Figure 7.
yield (kg/ha)
2000
45.0
40.0
35.0
30.0
25.0
20.0
15.0
10.0
5.0
0.0
1500
1000
500
1980-81
1981-82
1982-83
1983-84
1984-85
1985-86
1986-87
1987-88
1988-89
1989-90
1990-91
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
0
yield (kg/ha)
proportion of area under old age plants (20+ years) in total planted area
Source: Computed from Various volumes of Indian Rubber Statistics, Rubber Board of India.
The production of NR is basically meant to cater to the growing demand for rubber from the
domestic manufacturing industry. As such the rubber sector has been said to be distinct in terms
of its inward market orientation (Viswanathan and Shah, 2012). Around 50.2 per cent of NR in
India is consumed by the automotive tyre sector. In the following sections, trends in domestic
consumption and imports are explored.
Trends in Domestic Consumption and Imports
proportion of area under old age
plants (20+ years) in total planted
area (in per cent)
Figure 7: Yield of NR and Proportion of area under old age plants in total area.
India was the fourth largest consumer of NR after China, USA and Japan till 2007 (Economic
Review, Government of Kerala, 2007). From 2008 onwards, it has occupied third position
leaving behind Japan in the fourth position. In 2011, the share of India in world consumption of
NR was 8.8%.
The total consumption of NR in the country was 3.6 lakh tonnes in 1990-91 which increased to
9.8 lakh tonnes in 2013-14 registering a growth rate of 4.3 per cent from 1990-91 to 2013-14.
Due to the presence of a relatively well developed manufacturing sector, the domestic
consumption of NR exceeds total production (as shown by the high share of domestic
consumption in total production). Hence most of the years, very negligible or no NR was
exported from the country (see Figure 5).This indicates that the NR production in the country is
not sufficient to meet the growing consumption requirements of the domestic manufacturing
industry. As such one of the most important concerns has been to achieve self-sufficiency in
production by enhancing productivity and expanding the area under cultivation to meet the
growing consumption requirements of rubber (George et al, 1988).
12
10
8
6
4
2
share of domestic conumption in total production
2013-14
2012-13
2011-12
2010-11
2009-10
2008-09
2007-08
2006-07
2005-06
2004-05
2003-04
2002-03
2001-02
2000-01
1999-00
1998-99
1997-98
1996-97
1995-96
1994-95
1993-94
1992-93
0
share of exports in total production
(%)
140
120
100
80
60
40
20
0
1991-92
share of domestic consumption in
total production(%)
Figure 5: Share of Domestic Consumption and Exports in total NR production
share of export in total production
Source: Various issues of Indian Rubber Statistics
However, over the years in order to meet excess demand, NR has been imported. Figure 6 shows
that around 4 per cent of domestic demand for NR was met through imports in 1990-91, which
steadily increased to 33 per cent in 2013-14. The growth rate in imports from 1990-91 to 201314 stood as high as 12 per cent. These trends indicate that despite the efforts on the part of the
Rubber Board to attain self-sufficiency in production, the domestic needs of the industry are not
fully catered to by domestic production.
2013-14
2012-13
2011-12
2010-11
2009-10
2008-09
2007-08
2006-07
2005-06
2004-05
2003-04
2002-03
2001-02
2000-01
1999-00
1998-99
1997-98
1996-97
1995-96
1994-95
1993-94
1992-93
35.00
30.00
25.00
20.00
15.00
10.00
5.00
0.00
1991-92
in (%)
Figure 6: Share of imports in total consumption
share of imports in total consumption
Source: Various issues of Indian Rubber Statistics
Trends in Prices
Among other factors, prices are considered to act as one of the major determinants of the
investment decision of the growers (Varkey and Kumar, 2013). Further prices give an indication
of the growers’ ability to earn remunerative income that would induce them to continue with the
cultivation of these crops. Figure 7 shows that in nominal terms, the domestic price of NR has
increased over the years from Rs 2129 per 100 kg in 1990-91 to Rs 2085 per 100 kg in 2011-12.
However, the growth rate in the real price9 of NR is observed to have hovered around zero and
also experiencing decline in growth rate over the years. This trend observed is consistent with the
studies which have pointed out that there was a fall in rubber prices in the late 1990s (Varkey
and Kumar, 2013; Mohanakumar and Chandy, 2005). The price crash is said to have brought
about notable changes in agro-management practices with farmers resorting to cost-saving
measures such as reduction in the application of chemical, organic and bio fertilisers, curtailment
of weeding practices in rubber holdings and near stoppage of other cultural practices such as
spraying fungicides and pesticides (Viswanathan and Rajasekharan, 2001); and rainguarding.
This might possibly explain the sharp deceleration in yield during as was noticed in our earlier
analysis of yield of NR.
9
Domestic price of rubber corresponds to the average price for RSS 3 per 100 kg. Real price of rubber was
estimated by deflating this price by the WPI for rubber (base: 2004-05)
80.00
70.00
60.00
50.00
40.00
30.00
20.00
10.00
0.00
-10.00
20000
15000
10000
5000
Domestic price of natural rubber (Rs per 100 kg)
2011-12
2010-11
2009-10
2008-09
2007-08
2006-07
2005-06
2004-05
2003-04
2002-03
2001-02
2000-01
1999-00
1998-99
1997-98
1996-97
1995-96
1994-95
1993-94
1992-93
1991-92
0
growth rate in the real domestic price
of NR(%)
25000
1990-91
domestic price of NR (Rs per 100 kg) (in
nominal terms)
Figure 7: Growth rate in the real domestic price of NR (1990-91 to 2011-12)
growth rate in the real price of NR(%)
Source: Various issues of Indian Rubber Statistics
Considering the international price of rubber, it was found that over the years both the domestic
and international price of rubber are moving in tandem with each other (Figure 8).
Figure 8: Trend in domestic and international price of rubber
(in Rs per 100 kg)
25000
20000
15000
10000
5000
Domestic price of natural rubber (Rs per 100 kg)
2012-13
2011-12
2010-11
2009-10
2008-09
2007-08
2006-07
2005-06
2004-05
2003-04
2002-03
2001-02
2000-01
1999-00
1998-99
1997-98
1996-97
1995-96
1994-95
1993-94
1992-93
1991-92
1990-91
0
International price (Rs per 100 kg)
Source: Various issues of Indian Rubber Statistics
When we are discussing about the performance of the sector, besides production and growth,
there is a need to focus on the economic well-being of the major stakeholders such as growers
and workers10.
10
Here we are discussing about the workers as the sector being dominated by small holders, they themselves are
involved in the field and can be considered as workers.
Trends in average number of labour employed
Since the colonial regime, beside land, labour has been an important input for the production of
plantation crops. On an average, 160 working days per hectare is required for rubber production.
The bulk of the workload (83 per cent) is devoted to tapping while other activities require 17 per
cent of the labour input (Burger et al. 1995). Thus, the labour market in rubber plantations is
dominated by workers involved in tapping task which requires a certain level of skill to perform
the task of rubber tapping (Viswanathan et al., 2003).
Considering the trends in average number of labour employed in rubber plantations, Figure 9
shows that while in absolute numbers, the average number of labour employed increased from
2.8 lakhs in 1990 to around 4.8 lakhs in 2011, the growth rate is seen to have experienced sharp
fluctuations over the years. It was 3.9 per cent in 1992, which decelerated sharply to as low as
0.29 per cent in 2001, followed by sharp increase to 5 per cent in 2003 and 2007, experiencing
deceleration again thereafter. Though one cannot expect the growth rate in labour to increase
continuously overtime as it is known that inputs used in agriculture are subjected to diminishing
returns, but one needs to keep in mind the emergent labour shortage characterized by the paucity
of skilled rubber tappers in both the smallholdings as well estates since the late 1990s as has
been highlighted by scholars (Viswanathan et al., 2003;Viswanathan, 2013).
Figure 9: Trend in average number of labour employed
500000
400000
300000
200000
100000
0
growth rate of labour
employed (in per cent)
7.00
6.00
5.00
4.00
3.00
2.00
1.00
0.00
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
average number of labour
employed
600000
average no.of labour employed
annual growth rate of labour employed (in %)
Source: Various issues of Indian Rubber Statistics
Trend in expenditure of Rubber Board on R&D and Rubber Plantation Development Scheme
Given that area is limited in supply, any effort to increase production could not be conceived
merely through enhanced acreage; rather the possibility of exploring the avenues of increased
production basically lies in yield improvements (Chowdhury and Ram, 1987). To meet this
objective, all possible institutional support has been extended by the Rubber Board one of which
has been in the form of various financial incentives. In this regard, first we will discuss about the
overall expenditure of the Rubber Board followed by a discussion of the scheme-wise
expenditure focusing on R&D and Rubber Plantation Development Scheme which are expenses
directly related to increasing the production and productivity of NR.
(See Table 1) First considering the overall plan-wise real expenditure of the Rubber Board, it is
observed to have registered a high positive growth rate in the eighth (6.45 per cent) and ninth
plan (8.14 per cent). But this was followed by a sharp decline in the growth rate (- 0.10 per cent)
during the tenth plan. Though the growth rate is seen to have revived during the eleventh plan to
1.07 per cent but still it stands lower compared to the earlier plans.
Table 1: Growth Rate in the Plan-wise Real Expenditure of the Rubber Board
Plan period
Seventh Plan (1985-90)
Eighth Plan (1992-97)
Ninth Plan (1997-2002)
Tenth Plan (2002-07)
Eleventh Plan (2007-12)
Nominal plan
expenditure
(in Rs crores)
74.07
155.11
348.22
436.96
665.35
Real Plan
Expenditure
(in crores)
96.08
203.36
444.74
440.38
489.72
Compound
annual
growth rate of real
plan expenditure (%)
6.45
8.14
-0.10
1.07
Source: compiled and computed from various issues of Indian Rubber Statistics.
Note: The real expenditure is calculated by deflating the plan-wise expenditure of Rubber Board by the WPI (base
2004-05=100)
When we consider the scheme-wise expenditure of the Rubber Board11, the highest share of total
expenditure is allocated to the scheme “Rubber Plantation Development” which accounted for
around 46 per cent in 2011-12. It was followed by the scheme “Rubber Development in the
North East Region” which accounted for 26 per cent of the total expenditure and then by the
scheme Rubber Research and Development (14 per cent).
Figure 10 show that the real expenditure12 on Research and Development experienced steady
increase from 1993 to 1997, witnessing a sharp fall in 2002. Thereafter, a series of fluctuations
are observed where it is important to note that in 2008, there was the highest increase in real
expenditure but it was again followed by fall in two consecutive years (2009 and 2010) and an
increase in 2011.
Figure 10: Real Expenditure in R&D
18.00
16.00
in rupees (crores)
14.00
12.00
10.00
8.00
6.00
4.00
2.00
0.00
Source: computed from various volumes of Indian Rubber Statistics
Figure 11 shows real expenditure under the Rubber Plantation Development Scheme has been
increasing over the years.
11
Here we have discussed about those schemes directly related to increasing production of NR. The other schemes
are Processing, quality upgradation & product management; Market Development and export promotion; Human
Resource Development which together constitutes around 14 per cent of total expenditure of the Rubber Board.
12
The real expenditure in R&D and in Rubber Plantation Development Scheme is calculated by deflating the
respective expenditures by WPI (base 2004-05).
Figure 11: Real Expenditure under Rubber Plantation Development Scheme
60.00
in rupees (crores)
50.00
40.00
30.00
20.00
10.00
0.00
Source: computed from various volumes of Indian Rubber Statistics