MSP for jute to be around Rs 2,350-2,400 for 2014-15

Estimated 9.5-10 million bales of raw jute expected to be produced this year

The  minimum support price ( MSP) of jute for the marketing season 2014-15 is expected to be in the range of RS 2,350-2,400 per quintal, a marginal rise over last year’s MSP of RS 2,300 per quintal.

According to official sources, the MSP for the crop had witnessed a sharp correction in 2012-13, when it was raised by 31% to Rs 2,200 per quintal. Therefore this year’s MSP will aim at recovering the cost.

The other mandate is to contain the farm gate price so as to check the inflationary pressure on every commodity.

Recently the wheat MSP was increased by Rs 50 per quintal as per the recommendation of CACP even when the ministry of agriculture batted for an increase of Rs 100 per quintal. On the other hand, both the ministry of finance and ministry of food had opposed to such a move.

In its recommendations submitted to the ministry of agriculture, CACP has recommended complete review of the policies of pricing and administrative allocation followed for jute bags. This is because the jute bags are allocated at administered prices of jute mills and this is done at the expense of consumers of other industries which use jute bags, primarily foodgrain industry. This acts as a major impediment to modernization, sustainability and growth of the jute industry, said sources.

An estimated 9.5-10 million bales (a bale is 180 kg) of raw jute are expected to be produced this year and the sector is already burdened with a stock pile of 2.7 million bales. Few months back the industry faced cut in demand due to the decision of state food procurement agencies to cut down their procurement, primarily due to alleged irregular supplies, high costs and the poor quality of jute bags.

The industry's installed capacity is about 1.5 mt. Though 75% of jute mills are located in West Bengal, the state doesn't have a policy to procure jute bags.

According to a parliamentary reply in Lok sabha, the government of India is implementing various schemes to increase the use of jute/jute products in the country. Accordingly,  the government encourages extensive research in jute in order to increase production of Jute Diversified Products (JDPs) like jute geotextiles. Jute in the form of Jute Geotextiles (JGT) are used in road construction and the specific areas of its application are road construction, especially medium and low volume roads, river bank erosion control, stabilisation of flood and road embankments, hill slope erosion control, soft soil consolidation and watershed management.