IJMA wants jute policy to revive demand

With the mandatory requirement for packaging of sugar in jute bags falling to 20% from 100%, half the jute mills have been facing demand crisis for past two-and-a-half years

Reeling under a crisis triggered by the shutdown of jute mills, the Indian Jute Mills Association (IJMA) has urged West Bengal chief minister Mamata Banerjee to announce a jute policy early to help revive demand for jute bags.

In the past two months, 15 jute mills have faced temporary closure amid tepid demand. With the mandatory requirement for packaging of sugar in jute bags falling to 20 per cent since 2013-14, as opposed to 100 per cent stipulated originally in the Jute Packaging Materials Act (JPMA) of 1987, half the jute mills have been facing demand crisis for the past two-and-a-half years.

"The indents by the various state government agencies for this year's rabi crop virtually came down to a trickle in April 2015 and there is little likelihood of further indents of jute bags for food grains packing for the months of May and June. Had West Bengal announced the state policy under which packaging of potatoes and rice could have been included, all jute mills in the state would probably have continued production well beyond April 2015," said IJMA chairman Raghavendra Gupta in a letter to Banerjee.

Gupta said a quick announcement of the jute policy would not only revive the sector, but also improve sentiments among jute growers, workers and jute mill owners.

At present, there are four million jute growers and about 300,000 workmen engaged in the jute sector. If their families are factored in, approximately one-third of the West Bengal's total population of about 90 million are directly or indirectly linked to jute.

Pointing out to the overt flouting of JPMA provisions by rice millers, Gupta said very few millers are utilising new jute bags for packaging of rice. According to him, mandating packaging of potatoes grown in West Bengal in jute bags would create a demand of 50,000 tonnes annually for jute bags, he felt.

Over the past two years, around 25 per cent of the jute mills have been shut, rendering nearly 100,000 workmen jobless. The precarious situation has arisen due to continuous dilution of JPMA, attempts to violate the Act by sugar sector and different procurement agencies, and erosion of non-government market due to heavy imports from Bangladesh. Surge in imports from Bangladesh have been aided by zero duty on imports and 10 per cent export subsidy provided by the Bangladesh government.

Procurement of jute bags has fallen from an average of 2.68 million bales in 2012-13 to 2.03 million bales in 2013-14, dropping further to 1.99 million bales in 2014-15 (one bale is 180 kg).

The jute sector is passing through a phase of stagnation as investments in modernisation and product diversification have almost stopped since 2012-13.