"We have cut down our collection runs – farmers have stopped tapping” – this was the ‘news’ I was told numerous times during a recent short visit to Sri Lanka: I was on (other) business in India,
and used the proximity to visit a number of current and potential new supplier partners ‘across the straights’.
Globally, the majority of rubber, some 85%, is produced by small farmers, not on plantations. Sri Lanka is no exception. But with world market prices low, past present and future, for many of
them it simply does not make economic sense to invest the time and effort needed to produce rubber. It may be possible to eke out a living by tapping, whatever one gets for the raw latex milk is
‘income’. But if income alternatives exist, i.e. other types of work, in the countryside, or in the cities – and if these provide a better return, the choice is obvious: you give up rubber.
And the same goes for plantations: sections, which previously, after 35 years of tree life, would have been replanted with fresh rubber saplings, are being converted to palm oil. A serious loss
from an environmental point of view, as rubber trees are probably the best species for CO2 absorption.
Small farmers plant other crops, too, if they can. And even this group (apart from the very smallest of the small farmers) employs tappers: If tapping is stopped, it will result in job losses as
well as a future skills shortage – that is IF rubber trees are still there to be tapped – should prices increase.
The Fair Trade premium of EUR 0.50/kg Dry Rubber Content (DRC) as fixed by the Fair Rubber Association ensures that producing rubber remains economical even in times of low world market prices,
provided that the uptake is steady.
We are regularly criticised, that this Fair Trade premium is ‘far too high’. But then: In 2011, when prices were at USD 6.19/kg DRC – how did the industry cope? Because, in the end, the cost of
raw materials as part of a final product is usually comparatively small, that of the Fair Trade premium almost beyond the digits on a calculator: A balloon weighs 2 grams. The Fair Trade premium
on 2 grams is 0.001% of EUR 0.50.
On the other hand: Take a car tire. For ease of calculation, let’s assume the tire weights 10 kg – 30% of which may be natural rubber – so the Fair Trade premium would be EUR 1.50/tyre. 3% on a
bargain tire costing EUR 50*. Too much?
Of course, for a company that buys 100 tons of rubber, whether for tires or balloons – the Fair Trade premium would add up to EUR 50.000 in Fair Trade premiums. It actually does, for our members
– who physically show that it is possible to pay that extra and keep the latex flowing – with the help of consumers who care about the environment – and the living and working conditions of
rubber tappers and farmers.
The car industry uses 70-75% of all rubber produced world wide. The content of natural rubber varies from tire to tire, as does the weight and cost of tires: Passenger car tires have a low
content of natural rubber, high performance tires, e.g. buses, air planes, formula one use a maximum amount due to the requirement for heat resistance, abrasion etc.