Kerala Budget Hikes Rubber Support Price to ₹250 as Market Hits Record Highs

At a time when rubber prices are scaling record highs in both domestic and international markets, the maiden Budget presented by Chief Minister V.D. Satheesan has delivered a major boost to Kerala’s plantation sector by raising the support price under the Rubber Production Incentive Scheme (RPIS) to ₹250 per kg, the steepest increase since the scheme was introduced 11 years ago.

While the hike may not translate into an immediate financial benefit for growers, given that prevailing market prices already remain above the benchmark rate, the announcement is widely seen as a strong signal of the government’s commitment to the sector. Growers believe it will reinforce confidence among farmers and encourage higher production, while sparing the government any immediate subsidy burden.

Industry observers point out that even if rubber prices soften from their current historic highs, a sharp correction is unlikely in the near term due to a combination of factors, including rising synthetic rubber prices, adverse weather conditions in major producing countries and a continuing global supply deficit.

The announcement also hands the United Democratic Front (UDF) a significant political dividend, as raising the support price of rubber to ₹250 per kg was among the coalition’s key election promises. The small-scale rubber growers have welcomed the move, describing it as a much-needed morale booster for a sector that has endured years of uncertainty.

“The increase in market price and base price has brought new hope and enthusiasm to rubber farmers in Kerala. The economic sector of the high-range region, which has faced setbacks for a long time, is expected to regain strength,” said Babu Joseph, general secretary of the National Consortium of Rubber Producers’ Societies (NCRPS).

The announcement, however, also triggered political sparring. Kerala Congress (M) chairman Jose K. Mani welcomed the decision but criticised the government for falling short of its promise to raise the support price to ₹300 per kg. BJP leader and chairman-designate of the Rubber Board N. Hari was more critical. “The State Budget has fixed the support price of rubber at ₹250 per kg at a time when international prices have touched ₹300. This amounts to little more than a mockery of farmers,” he said.

The RPIS was launched in 2015 by the then UDF government as an emergency intervention when rubber prices had plunged to distress levels. Since then, the State has disbursed ₹2,079.43 crore as subsidy under the scheme. Initially, the government fixed a benchmark price of ₹150 per kg and compensated farmers for the difference between that rate and the daily market price notified by the Rubber Board. The benchmark was subsequently revised to ₹170 in 2021, ₹180 in 2024 and ₹200 in 2025 before the latest jump to ₹250.

The demand for a higher support price has long found a powerful advocate in the Catholic Church, particularly the Syro-Malabar Church, which enjoys considerable influence among the settler-farmer communities of Central Travancore and North Malabar. A senior Church official said the latest hike had addressed a long-standing concern raised by the Church. “This will surely go a long way in smoothening the relationship between the Church and the government,” he said.