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How Globalization Affects Rubber Industry

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Rubber – A Brief History

Since Columbus had discovered America in 1495, Indians and ancient tribes of South of America called rubber ‘Caoutchouc’. Its meaning is ‘Crying Tree’. The reason is that when it is cut off with sharpened tools, its natural latex comes out as a tear of tree. Rubber is a quick growing tall tree which begins to yield in 5-7 years after planting. Rubber and its products have a great role in our everyday life. This tree is described as the nature’s most versatile crop. Hence the demand for rubber will keep on increasing. It is used for a variety of purpose; for erasing pencil marks, for the manufacture of tyre and to make other industrial products and reaches the market as useful products. Rubber is being used by almost all industries for different industrial purposes too. Unlike other products, rubber products have a long life and unlike other plants rubber gives its best outcome year after year for around 20 years. India is one of the top ten producers of rubber in the world. Kerala is the leading rubber producing state in India. Rubber is the main source of income for many farmers. Kottayam is the leading rubber producing district in Kerala and hence it is called ‘Land of Latex’. Rubber Board, a central government research institute is located at Kottayam.

Globalization

The term ‘Globalization has come into usage since the 1980s. Globalization in this phase can be defined as the process of deeper integration between countries and regions of the world involving greater trade across borders in goods and services. Globalization has played a significant role in the development of world economy. It has increased the relationship between nations in trade and other services. Globalization is benefic for the developed countries than any other country. It has many positive impacts but there are some negative impacts for globalization which affected the developing countries.Globalization has suppressed many traditions. It has also made a great difference in the division of world.Effects of Globalization

Globalization has badly affected the developing countries. In case of trade, the developed countries with comparative advantage for products over others, export the products to different countries including the countries which have the production of the same commodity, for cheaper cost than they could get it from their own country. This decreases the demand for the products produced there and they are forced to sell their products in a cheaper cost as there is import of the same. And then would be helpless and have to stop the production. This can cause unemployment. Due to the fear of this failure, people go for white caller job. This leads to the lacks of production of required raw materials for our daily use. It leads to a trade with which we have pay a huge amount for it. Globalization Puts Agriculture at Risk!

Globalization Puts Agriculture at Risk – THE HINDU – Agriculture faces the biggest risk from deepening globalization. The volatility of international prices of agricultural commodities has a direct impact on the country. Among the worst affected are the tropical agricultural products like the ones that Kerala produces, large quantities of which are exported. The agriculture sector is the mostly affected due to Globalization. It is at risk. The raw materials which are produced here have no demand in India as there is import of the same in cheaper cost. The producers have great problem over this and they are forced to stop their cultivation as there is no profit, but only loss. Especially the planters in Kerala are passing through a very difficult period as s result of steep fall in prices due to globalization. The products which are raised by them have no demand in the market. But it had an intention to promote the indigenous goods produced in Kerala. Later it deviated and started importing goods which are even produced in our country. Gradually the amount of products are decreasing with the area of land of cultivation. Hence Kerala is now depending for other states for goods which mainly include rice, wheat, spices, vegetable and for fruits.

How Globalization Affected Rubber Industry in Kerala

In case of rubber, the problem arose due to import of the rubber while we had enough production of it. Malaysia, Indonesia, Philippines and Thailand are some of other countries which produce and export it. India has absolute advantage over the production of rubber. But it is imported from other countries since they demand a lower cost for it. Hence the demand for Indian rubber decreases and it is a great loss for the producers, workers as well as for the Indian economy. Here, what happens is a modern or a reformed form of mercantilism: a zero sum game where only the country which exports are the benefiter and India has no profit, but lose of economy. Those countries are engaged in trade with the expense of India. Indian rubber producers are not even getting the money which they invest for rubber cultivation.

Latex is undergone different process before the owner sells it in the market. The process includes tapping, filtering etc. By the process of tapping, latex is collected from rubber trees and it is clumped in a tray by adding acid. The clumped form of latex is rolled into sheets in a mill to remove water and then it is smoked and dried. These are considered as the initial process, which are done by the rubber planters. But when the end product of this process is sold at market, the produces are not even getting the money to give to their workers. Hence the planter dropped this and what most of them do now is, they do tapping ones in two or three days and they collect the dried latex and they will dry it again and sell it without doing any other process. Now, most of the rubber planters in Kerala depend on other source for their livelihood. Hence the import of rubber increased further.

India’s condition can be related to this table. India had comparative advantage over the production of rubber, but it was imported from other countries. India gets no profit out of it, but loss and thus it can be called as a reformed form of mercantilism. The less demand for rubber in India made the market to decrease the cost of it and it is being a great problem for the planters even today. Automobile companies were the chief consumer of rubber. They got rubber cheaper from other countries and they depended them for more. If this condition continues, the Indian economy goes down as there is unemployment, lack of production of required resources, and variation in the price of commodities. A nation with enough resources is an Utopian theory. But it is essential to have advantage over the production of commodities over other nations in order to balance the economy.

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