Commerce ministry sources said government's decision to procure natural rubber at market rate not exceeding Rs 34 a kg for the RSS four variety when prices were hovering around that level, seemed to have dissuaded the farmers.

The government had decided during the second week of may that STC would procure 20,000 tonnes of rubber as part of market intervention operations to arrest sagging prices of the commodity. The entire quantity was to be procured in two months' time. An STC official, when contacted, refused to divulge details regarding the exact quantity procured by the corporation.

Kerala Congress (Mani) MP PC Thomas told PTI that hardly 1,000 tonnes had been procured by STC even after the two-month period lapsed.

Prices for both RSS four and lot rubber hit a five year low inApril before picking up on improved sentiments and market intervention by the centre.

Rubber prices have hovered around Rs 3,400 a quintal for RSS four since the announcement of the procurement but have tended to decline this week. RSS four prices closed at Rs 3,200 a quintal in Kottayam, the primary market, on Wednesday.

"Farmers will come to sell their stocks to us when the prices in the open market are lower than their expectations. Procurement will have to be seen from that angle," the STC official said.

Industry sources said growers were perhaps awaiting the new benchmark price to sell their stocks. But the STC official said the corporation was happy as long as the growers did not approach it.

Commerce minister Ramakrishna Hegde told the Parliament two weeks ago that government was monitoring the rubber price situation closely and it would ensure that the growers were not affected by the low prices.

Prime minister Atal Behari Vajpayee during his visit to Kerala in May also said interests ofsmall farmers, who constitute a majority of the rubber growers, would be protected. While ordering the procurement, government also decided that the procured rubber would either be exported or sold against surrender of advance import licence to the industry.

STC had procured about 10,000 tonnes of rubber last year but its sale to the industry has been stalled due differences over "trading technicalities".