Rubber (Promotion and Development) Bill, 2022

07 May Rubber (Promotion and Development) Bill, 2022

Rubber (Promotion and Development) Bill, 2022 – Today Current Affairs

The repeal of the Rubber Act, 1947 (hereafter the act) and the enactment of Rubber (Promotion and Development) Bill, 2022 (hereafter the bill) have been under heated discussion ever since the bill was uploaded on the website of the Ministry of Commerce and Industry (MoCI) for comments and it is expected to be introduced in Parliament forthwith. 

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Legislations in Rubber Sector

The Rubber (Production and Marketing) Act, 1947: After the end of World War II, deliberations on setting up a statutory body for regulatory and development activities in the rubber sector were expedited and the central government passed the Rubber (Production and Marketing) Act, thus establishing the­Indian Rubber Board, which came into force from 19 April 1947. 

Context of the New Bill : The Hindu Analysis

Implications

The implications of the bill are examined with regard to the scope of the act: autonomy, constitution, functions, and powers of the board and powers of the central government.

Scope of the act: As per the original version of the act, the purpose of the legislation was “to provide for the development, under the central control of the rubber industry, so far as regards the production and marketing of rubber and for regulating export and import of rubber.” The amendment in 1954 revised the purpose of the act as “to provide for the development under the control of the union of the rubber industry.” However, as “rubber industry” was not defi­ned in the act and as “rubber” was defi­ned as natural rubber obtained from rubber trees, the revision had just taken away the limiting condition of “so far as regards the production and marketing of rubber and for regulating export and ­import of rubber.” In the bill, the purpose is stated as “to promote and develop the Indian rubber industry, enable the functioning of a modern rubber board and for matters connected therewith or incidental thereto” and “rubber industry” is defined. As per the bill, “rubber industry” means “the industry engaged in the production, manufacture, supply, distribution, trade and commerce, utilization of rubber and rubber products, and includes rubber plants, the production, processing, and of ­Hevea wood, research, development of rubber estates, and services related thereto.” 

Rubber board’s autonomy: The term “board” here means the rubber board constituted by the central government (as per Section 4 of the act and Section 13 of the bill) comprising the chairman, executive director, members of Parliament, and representatives of state governments and stakeholders and not the esta­blishment of the board headed by executive director with departments/divi­sions undertaking extension, rese­arch, training, and other activities. The board is primarily a statutory advisory body and executive powers are vested with the principal executive officer who reports to the central government.

Constitution of the Board : The Hindu Analysis

Nine members were nominated or app­ointed by the central government in 1947 to the board. The stakeholder associations could nominate 11 members, whereas six members were nominated by the state governments of Travancore–Cochin and Madras. By amendment in the act in 1954, the provision of nominations by stakeholder associations was discontinued, the number of representatives allotted to the states of Travancore–Cochin and Madras were raised to 10, and the central government could nominate/appoint 12 persons. The central government officials, as representatives in the board, were excluded and the representatives of the states of Madras and Travancore–Cochin were made, not necessarily nominated by the respective governments. The Hindu Analysis

Another development was the inclusion of three members of Parliament in the board. The change in the 1980 was the addition of an executive director to the board, and in the 2010, three officials of the central government were included. Meanwhile, the Rubber Rules, 1955 have been amended on several occasions, which included the number of members to be nominated by the central and state governments, the number of small and large growers, etc. The major change in the bill is that ­except for the three members nominated by Parliament, all the members of the board will be either nominees or app­ointees of the central government.

Central Government’s Powers : The Hindu Analysis

The allegation that the central government would acquire the powers of the board through the bill is not right as ­almost all the powers are vested with the central government even in the exi­sting act. There are also accusations that Section 30 of the bill was dubiously added to enable the central government to prevent any increase in the rubber prices by notifying maximum prices to help the rubber product’s manufacturing sector. Section 30 of the bill is just a reproduction of Section 13 of the act, on notification of minimum and maximum prices, and nothing new at all. This provision has been there from 1947 and the only changes made were omitting the PAC in 1954 and adding “if it deems necessary” in 2010 to avoid compulsion in the notification of prices in the context of a high court order. There is no change between the act and the bill with regard to the provisions on control of import and export of natural rubber, and the central government has similar powers even under Section 3 of the Foreign Trade (Development and Regulation) Act for all commodities (GOI 1992). The added power of the central government in the bill is vide Section 27, which enables it to supersede and reconstitute the board any time.

Powers of the Board : The Hindu Analysis

The power to import rubber for sale, or to purchase rubber, in the internal market under Section 8A of the act is not included in the bill, but this was provided to be carried out only with the prior ­approval of the central government. Through Section 5 of the bill, the board is empowered to issue directions to dea­lers, exporters, growers, manufacturers, processors, and such other persons in the rubber industry and the contravention of such directions can lead to penalties under Section 9. The functions of the board have been expanded in the bill by including rubber products in rese­arch, technical advice, and export promotion. However, most of the functions additionally mentioned in the bill are activities already being undertaken by the board to a certain extent. Thus, in fact, the functions and powers of the board have not been undermined in the bill.

Suggestions : The Hindu Analysis

(i) Scope of the bill: Several sections in the act have been modified in the bill to include the downstream rubber products manufacturing and rubberwood sectors within its scope. This is appropriate as the legislation shall cover the entire rubber industry value chain as well as the ancillary sectors. Rubber products manufacturing sector consumes natural rubber, synthetic rubber, and reclaimed rubber (rubber recovered from used rubber products). In most of the products, combinations of natural rubber and synthetic rubber are used for better performance and properties, whereas in other products, reclaimed rubber is used for cost-effectiveness. It is appropriate to cover synthetic rubber and reclaimed rubber also in the legislation so that the entire rubber industry value chain is within its scope. 

(ii) Representation in the board: The bill has included additionally the dealers, processors, exporters, and institutes or authorities specializing in research in the rubber industry as categories eligible for getting appointed as members of the Rubber Board. The act had specified the number of members in the board representing different segments, such as small growers, large growers, manufacturers, and labour interests. The Hindu Analysis

(iii) Ex officio members in the board: The chairman, executive director and rubber production commissioner (RPC) are the ex officio members in the board as per the act. The bill includes the chief financial officer and secretary who head the finance and administration departments of the board also as ex officio members. The core functions of the board are plantation development and research activities handled by the rubber production department and the Rubber Research Institute of India (RRII), resp­ectively, as substantiated in Section 3, under the objectives of the bill. 

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CONCERNS

• Declaring rubber cultivation as an industry: it would have many domestic legal implications, for instance if rubber plantation is not considered by courts as agricultural land it would have far reaching implications on bank loans etc.
  • The government is once and for all closing the doors of re-negotiating with the WTO to make rubber an agricultural product by explicitly defining rubber cultivation as an industrial activity.
• Confusions regarding quality standards: according to the bill quality standards to be implemented for all rubber produced in India and imported to India but it also adds that quality standards would be enforced for rubber produced in India and not for imported rubber.
  • It has been said that there is a huge pressure from very high levels on the Bureau of Indian Standards (BIS) and the Rubber Board to agree to import low-quality cup lumps. Today Current Affairs
    
  • The lumps are a form of unprocessed, often decaying natural rubber of uncertain quality. The above provision would make it easy to import poor quality, cheap rubber.
• Timely re-plantation: the Bill does not provide a framework for timely replanting of plantations once they cross their economic life.
  • The demand for rubber would more than double in the next decade and triple by 2040.
• Safeguarding the interests of small and marginal farmers: Concerns have been raised that the bill favors the industry and harms the interests of the growers. The bill defines a Grower as one who owns the state but it is not the case, the mean size of rubber holding is hardly 0.5 hectare.
  • Rubber growers are small and marginal farmers, and safeguarding their interests is crucial to sustaining rubber production in the country.
  • Natural rubber cultivation gives livelihood to more than 1.3 million households.
• Fixing a fair Price: The bill provides for fixing the minimum or maximum price for rubber however it does not provide for fixing a fair price, the Grower needs a fair price and not a minimum price. Today Current Affairs
  
  • The Rubber Board should be allowed to buy and export rubber to provide relief for growers when the domestic market falls below the fair price.
  • The Act earlier had a provision enabling the Rubber Board to procure rubber and export, but this provision has been removed in the Bill.

In this article we mention all information about Rubber (Promotion and Development) Bill, 2022  Today Current Affairs.

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