Food ministry for 30% dilution in jute bag use rule

Mill body protests, says arguments not factual and sector will lose Rs 2,000 cr

In a setback to the jute sector, the Union food ministry has recommended dilution of the Jute Packaging Materials Act of 1987 (JPMA), pressing instead for a 30 per cent use of plastic bags for packing foodgrain in the 2013-14 agriculture season.

It has based this on a recent price policy report on raw jute for 2013-14 by the Commission for Agricultural Costs and Prices (CACP). The CACP said reservation in the JPMA should be reduced to 70 per cent of the total need. JPMA provides for mandatory use of jute bags for packaging of foodgrain and sugar up to 100 per cent by government procurement agencies. The food ministry is the biggest purchaser of the annually produced 2,000 million jute bags. About 35-40 per cent of jute bags produced by the industry are purchased by the food ministry on behalf of different state food procuring agencies and the Food Corporation of India (FCI).

"The dilution proposal is very unfortunate. If implemented, it will shrink further. The industry will lose around Rs 2,000 crore if this happens. Though the textile ministry is supposed to take care of the industry, it is neglecting our concerns. There are alternative jute bags available for packaging of foodgrains but these are not being used," said Sanjay Kajaria, joint managing director, Hastings Jute Mill and former chairman, Indian Jute Mills Association. The total market for jute bags, including exports, are estimated at around Rs 10,000 crore.

In 2012-13, the Cabinet Committee on Economic Affairs allowed 10 per cent use of plastic bags for packing foodgrain and 60 per cent for sugar. According to the food ministry, the industry has a peak capacity to supply 2.5-3 million bales (a bale is 180 kg) of jute bags, while the yearly requirement is 3.5-4 million bales.

In a recent letter, Union food secretary Sudhir Kumar complained to his counterpart in the textiles department, Zohra Chatterjee, that for the past two to three years, the state grain procuring agencies were facing many problems regarding timely supply of packaging material. To relax pressure on the grain producing farmers, the JPMA should be eased by 30 per cent, Kumar suggested.

In 2011, Madhya Pradesh witnessed law and order problems because of irregular supply of jute bags. In its proposed arguments before the coming meeting of the Standing Advisory Committee on jute, the industry has claimed the demand for jute bags is lower than production. And, that there are no proven records of supply default to food procuring agencies and FCI.

The Jute Advisory Board at its meeting on May 10 had projected an estimated total production of 12 million bales for 2013-14 . This includes 11.2 million bales of jute and 0. 8 million bale of mesta. In 2012-13, the production was 11.4 million bales, including 10.8 million bales of jute and 0.6 million bales of mesta.