Centre to continue 100% reservation for jute bags

In a major relief to the jute industry in the country, the Cabinet Committee on Economic Affairs (CCEA) has decided to continue 100 per cent reservation for jute bags for packaging of sugar and food grains by the government procuring agencies.

The decision was taken at a meeting of CCEA held on Monday.

The continuation of 100 per cent reservation under the Jute Packaging Materials Act (JPMA) of 1987 has put to rest all speculation of a possible 25 per cent dilution recommended by the Centre’s Standing Advisory Committee chaired by the Union textiles ministry.

The dilution proposal had led to an unprecedented situation which had resulted in a progressive decline in prices of raw jute and jute goods in this month.

Amid fears of dilution, the sugar industry in the country had refrained from procuring jute bags from July this year even though the new jute crop had started arriving by then.

Prices of raw jute had drastically fallen from Rs 28,500 per tonne on August 1 this year to Rs 20,500 per tonne (as on August 26 this year).

Indian Jute Mills Association, the apex body of the jute industry in the country had strongly objected to the dilution proposal keeping in view the interests of more than four million jute cultivators and 2.5 million jute workers across the country.

After approaching three Union Cabinet ministers- Sharad Pawar, Mamata Banerjee and Pranab Mukherjee, IJMA had sought the intervention of Prime Minister Manmohan Singh last month in a last ditch effort to reverse the dilution move.