“A guy from our place is going to be the first space tourist,” says Antony, a rubber grower from Pala in Kerala, with a twang in his voice. He is referring to Santosh George Kulangara who will be first Indian space tourist, in a few months, riding aboard the Virgin Galaxy service. That is how good things are in this town of about 20,000 people — some people can afford space travel.

The rubber trade is booming and so is the Pala town economy which is powered by rubber plantations. “There are new cars rolling everywhere. Reliance retail has taken 10,000 sq ft space for a new store at a monthly rent of Rs 2 lakh and property prices, too, are up,” Antony says almost out of breath, counting the blessings of the boom in rubber plantations due to consistently good rubber prices since 2005. “We are getting Rs 90 per kg of rubber.”

But the government thinks otherwise. Next week it is likely to approve a Rs 50 crore subsidy to cover re-plantation, in Kerala, of rubber in 33,500 hectares, along with a subsidy of Rs 476.10 crore for tea, Rs 180 crore for coffee and Rs 211.35 crore for cardamom. While some might argue that these subsidies will benefit small plantation owners, an economist will argue that given a boom, if small plantations are unsustainable let mergers and acquisitions lead to economies of scale. In this case, subsidies are only blocking a process that will create higher efficiency in the economy.

... contd.