Member of Parliament (MP) from Barrackpore constituency in West Bengal met Textile Minister to apprise him about issues concerning jute farmers, workers and the overall jute industry.
Mills are procuring raw jute at prices higher than what they are selling them at after processing.
A September 30, 2021, notification mandated that no entity would be allowed to purchase or sell raw jute at a price exceeding ₹6,500 per quintal. The cyclone Amphan in May 2020 and the subsequent rains in major jute producing States aggravated the crisis.
The operations of 20 jute mills in Barrackpore constituency, with lakhs of people dependent on them, were adversely affected with many forced to shut down and many others on the verge of closure.
Approximately 60 mills operating in the State, 15 had shut down because of the crisis.
Climatic Conditions for Jute growth:
The jute plant needs a plain alluvial soil and standing water. Soft water is necessary for jute production.
Availability of quality jute: The Ganga-Brahmaputra delta grows about 90 percent of India’s jute and provides raw material to jute mills.
Transportation: Cheap water transportation is available in the Ganga-Brahmaputra delta region. The area is also served by a network of roads and railways.
Labour: High density of population is required for abundant cheap labour.
The suitable climate for growing jute (warm and wet) is offered by the monsoon climate, during the monsoon season.
Temperatures from 20 to 40 °C (68–104 °F) and relative humidity of 70%–80% are favorable for successful cultivation. Jute requires 5–8 cm (2–3 in) of rainfall weekly, and more during the sowing time.
What is the problem all about?
In simple words, mills are procuring raw jute at prices higher than what they are selling them at after processing. Let’s understand the mechanism first.
- Mills do not acquire their raw material directly from the farmers. There are two reasons for the same.
- First, because the farmers are far-off from the mills locations and the procurement process is cumbersome.
- Mills would have to go to multiple farmers to acquire the requisite quantity as no single farmer produces enough to fulfil the requirements of the entire mill.
- The procurement now flows through middlemen or traders. As a standard practice, the middlemen charge mills for their services, which involves procuring jute from farmers, grading, bailing and then bringing the bales to the mills.
- The government has a fixed Minimum Support Price (MSP) for raw jute procurement from farmers, which is ₹4,750 per quintal for the 2022-23 season.
- However, as the executive stated, this reached his mill at ₹7,200 per quintal, that is, ₹700 more than the ₹6,500 per quintal cap for the final product.
- Though the Union government has come up with several schemes to prevent de-hoarding, the executive believes the mechanism requires a certain “systematic regulation”.
What happened to supply?
What made the situation particularly worrisome recently was the occurrence of Cyclone Amphan in May 2020 and the subsequent rains in major jute producing States.
These events led to lower acreage, which in turn led to lower production and yield compared to previous years.
Additionally, as the Commission for Agricultural Costs and Prices (CACP) stated in its report, this led to production of a lower quality of jute fiber in 2020-21 as water-logging in large fields resulted in farmers harvesting the crop prematurely.
Acreage issues were accompanied by hoarding at all levels – right from the farmers to the traders.
Where is jute used?
- Bulk of the final jute produced is used for packaging purposes. The provisions of the Jute Packaging Material (Compulsory use in Packing Commodities) Act, 1987 or the JPM Act mandate that 100% production of foodgrains and 20% sugar production must be packaged in jute bags.
- The share of jute used for sacks, therefore, increased from 67.9% for the TE (TE: Triennium Ending or three years ending) 2010-11 to 78.3% in TE 2020-21.
- On the other hand, jute used for manufacturing other products (such as furnishing materials, fashion accessories, floor coverings or varied applications in paper and textile industries) has declined from 15.5% to 9.7% during the same period.
- As per the Food and Agriculture Organisation (FAO), India is the largest producer of jute followed by Bangladesh and China.
- However, in terms of acreage and trade, Bangladesh takes the lead accounting for three-fourth of the global jute exports in comparison to India’s 7%.
- This can be attributed to the fact that India lags behind Bangladesh in producing superior quality jute fibre due to infrastructural constraints related to retting, farm mechanisation, lack of availability of certified seeds and varieties suitable for the country’s agro-climate.
- What also does not bode well for India is that jute acreage competes with crops as paddy, maize, groundnut, and sesame.
- The increased availability of synthetic substitutes is further bothering the demand for jute domestically.
- Further, as the CACP report stated, Bangladesh provides cash subsidies for varied semi-finished and finished jute products.
Hence, the competitiveness emerges as a challenge for India to explore export options in order to compensate for the domestic scenario.
What is at stake?
As the jute sector provides direct employment to 3.70 lakh workers in the country and supports the livelihood of around 40 lakh farm families, closure of the mills is a direct blow to workers and indirectly, to the farmers whose production is used in the mills.
West Bengal, Bihar and Assam account for almost 99% of India’s total production.
Measures taken for the jute industry:
- Improve quality: Innovative ways of bleaching, dyeing, and finished goods processes the jute industry now provides finished jute products that are softer and have to luster with aesthetic appeal.
- Today Jute has been defined as eco-friendly natural fiber with utmost versatility ranging from low-value geo-textiles to high-value carpets, decorative, apparel, composites, upholstery furnishings, etc.
- Efforts in R&D to strengthen the jute industry and implement newer technologies, diversified products, and improved machinery through intensive modernization.
- These will fetch more profit by reducing cost and has less market competition (synthetic counterpart) due to its eco-friendly property which has good prospects in the coming days.
- Jute cultivation is being expanded. There has been some dispersion, due to increasing demand from the sugar industry in UP and cement industry MP.
The future prospects of the Jute industry, however, is bright due to the following:
- Diversification of jute products
- Environmental awareness
- Ban on polythene and plastic bags
- Increasing use for oil conservation
- Construction of bunds, river embankments, landslide protection
- Along with cotton, jute is also being used for apparel manufacturing.
Diversification of jute products such as clothing items, decorative items, matting of carpet improve durability, packing items, etc. has been done to increase the horizon of Jute Industry.
Jute is environment friendly and renewable; hence its use must be encouraged e.g. by making it mandatory to use jute for packaging.
Govt has issued orders like cement, sugar, fertilizer, have to strictly make use of jute production to packing the materials, Food Corporation of India, oilseeds, and tea sector also have to implement this order.
National jute Manufactures Corporation has been formed to boost the jute industry.