Revised Kerala Budget: rubber support price hiked to ₹250 at record highs in the market

Rubber farmers believe the move will boost confidence among farmers and encourage higher production, while sparing the government an immediate subsidy burden. | Photo credit: File Photo

At a time when rubber prices are hitting record highs both domestically and internationally, the first budget presented by Chief Minister VD Satheesan has given Kerala’s plantation sector a big boost 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 this increase 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 this will boost confidence among farmers and encourage higher production, while sparing the government any immediate subsidy burden.

Industry observers point out that even if rubber prices moderate from their current all-time 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 brings a significant political dividend to the United Democratic Front (UDF), as raising the rubber support price to ₹250 per kg was one of the coalition’s key election promises. Small-scale rubber farmers welcomed the move, calling it a much-needed boost to morale in an industry that has been going through years of uncertainty.

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

“a mockery of farmers”

However, the announcement also sparked political controversy.

Kerala Congress (M) president Jose K. Mani welcomed the decision but criticized the government for not fulfilling its promise to increase the support price to ₹300 per kg. BJP leader and Rubber Board chairman-designate 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 is 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 fell to emergency 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 this 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 a final jump to ₹250.

The demand for a higher support price has long found a powerful supporter in the Catholic Church, especially the Syro-Malabar Church, which enjoys considerable influence among the settler-farming communities of Central Travancore and North Malabar.

A senior Church official said the latest increase addressed a long-standing concern expressed by the Church. “This will certainly lead to the smoothing of relations between the church and the government,” he said.

Published – 19 Jun 2026 19:51 IST