Kottayam: The central government is considering a plan to provide loans for rubber farmers instead of subsidy. The Union Ministry of Commerce and the Rubber Board have held two rounds of discussions on the issue.
The National Bank for Agriculture and Rural Development (NABARD) and other rubber companies involved in the rubber loan scheme will be part of the talks in the next phase. The talks will decide the loan amount, interest rate and other details.
The plan is aimed at ensuring funds for rubber plantation, production and sales with the help of government and companies. Rubber farmers will be provided loans by NABARD on the guarantee of the Rubber Board. The amount will be released in phases in the first, third and fifth years. The loan repayment will start from the eighth year.
The Rubber Board will facilitate the purchase of rubber produced by farmers. The board will also ensure that the farmer repay the loans. Talks are on to involve other financial institutions to provide loans.
At present, rubber planters get subsidy and a minimum support price. In the plan that envisages Rs 25,000 subsidy per hectare, no money has been dispersed since 2014. The main reason behind this is the non-allotment of funds by the Centre.
The Rs 170 crore that was granted last year was kept aside for the day-to-day functioning of the board. Funds were distributed through the rubber production incentive scheme launched jointly by the Centre and state government until last September.
Under this scheme, rubber has a base price of Rs 150 per kg. The difference between the base price and the market price will be provided by the government.
The Rubber Board had approached the central government seeking to increase the incentive scheme price to Rs 200 and reinstation of the subsidy. But the Centre is planning to replace subsidy with loans.
