Centre miffed with Jute Corporation over low scale of MSP operations

CCEA has found that JCI and other cooperatives have procured under 4% of the jute produced in the country in the past five years

The Union government is seemingly peeved with the Jute Corporation of India (JCI) for its low scale of MSP (Minimum Support Price) operations of raw jute in the past five years.

Recently, the Cabinet Committee on Economic Affairs (CCEA) has found that JCI and other cooperatives have procured less than four per cent of the jute produced in the country in the past five years. Between 2012-13 (July-June) and 2017-18 (July to January), JCI has procured 3.4, 1.5, 0.2, zero, 2.5 and 3.1 per cent of the jute produced in the country. On an average around 8.5-9.3 million bales of jute is produced in each crop year.  

The findings have been unravelled at a time when the government is confronting difficulties in implementing the revised MSP rates. At a recent meeting of the central food ministry, the Office of the Jute Commissioner dodged responsibility on overseeing MSP jute operations, stating it is in the eminent domain of JCI. In contrast to these claims, many sections in the Jute and Jute Textile Control Order of 2016 empower the Jute Commissioner's office to launch action to control and manage operations of raw jute.

JCI is understood to have convened a meeting on Monday (July 9) to take stock of the situation. KVR Murthy, chairman cum managing director at JCI did not respond to calls or text message on his number. An industry source said JCI is constrained to carry out large scale MSP operations as it is crippled by lack of efficient and professional manpower. In 2017-18 crop year, JCI was able to manage only 77 of its 141 direct jute purchase centres. Only 13 co-operatives took part in procurement operations. JCI conducts MSP operations through its 16 regional offices. JCI’s present storage capacity is also inadequate.  

The MSP for raw jute has been fixed at Rs 37,000 per tonne for 2018-19, Rs 200 higher than the previous fiscal. However, the landed price of raw jute comes to Rs 40,000 a tonne in the Kolkata market. Presently, raw jute is selling at Rs 36,000 per tonne. Due to appallingly low level of intervention from the JCI, the jute farmers are forced to go for distress sale of the crop. Around 0.4 million farmers are engaged in raising jute crop.

CCEA has noticed a substantial gulf between potential yield and actual yield of raw jute at the farm level. Production of poor quality of raw jute is a vexing issue since it does not contribute towards manufacture of high quality diversified jute products. As per industry estimates, 70 per cent of the raw jute output belongs to the inferior grade which is only suitable for producing coarser materials like sacks. The jute industry and Jute Balers' Association do not foresee any shortage of raw jute in this financial year.