The recent woes of the jute industry in West Bengal

What is the News?

Member of Parliament(MP) from Barrackpore constituency in West Bengal has met the Textile Minister to apprise him about issues concerning jute farmers, workers and the overall jute industry.

He said that the operations of 20 jute mills in his constituency with lakhs of people dependent on them were adversely affected with many forced to shut down and many others on the verge of closure.

What is the problem the Indian Jute Industry is facing?

In simple words, jute mills are procuring raw jute at prices higher than what they are selling after processing. 

Why is this happening? 

Mills do not acquire their raw material directly from the farmers. This is because the farmers are far-off from the mill’s locations and the procurement process is cumbersome. Due to this, procurement now flows through middlemen or traders. 

These middlemen charge mills for their services which involve procuring jute from farmers, grading, bailing and then bringing the bales to the mills.

The government has a fixed Minimum Support Price(MSP) for raw jute procurement from farmers which is ₹4,750 per quintal for the 2022-23 season.

However, jute reaches mill at ₹7,200 per quintal that is, ₹700 more than the ₹6,500 per quintal cap for the final product. This is why the procuring price is higher than the selling price.

Jute Industry in India

Jute Industry in India is 150 years old. In India, Jute is primarily grown in West Bengal, Odisha, Assam, Meghalaya, Tripura and Andhra Pradesh. (West Bengal, Bihar and Assam account for almost 99% of India’s total jute production)

Jute is the only crop where earnings begin to trickle in way before the final harvest. The seeds are planted between April and May and harvested between July and August.

Jute production is a labour-intensive industry. It employs about two lakh workers in West Bengal alone and 4 lakh workers across the country.

Uses of Jute: The bulk of the final jute produced is used for packaging purposes. The provisions of the Jute Packaging Material (Compulsory use in Packing Commodities) Act, 1987 or the JPM Act mandate that 100% production of foodgrains and 20% sugar production must be packaged in jute bags. 

Other uses of Jute are: Used in insulation (replacing glass wool), geotextiles, activated carbon powder, wall coverings, flooring, garments, rugs, ropes, gunny bags, handicrafts, curtains, carpet backings, paper, sandals and furniture.

India as a Jute Producer

India is the largest producer of jute followed by Bangladesh and China. However, in terms of acreage and trade, Bangladesh takes the lead accounting for three-fourths of the global jute exports in comparison to India’s 7%. 

This can be attributed to the fact that India lags behind Bangladesh in producing superior quality jute fibre due to infrastructural constraints related to retting, farm mechanization, lack of availability of certified seeds and varieties suitable for the country’s agro-climate. 

Further, Bangladesh provides cash subsidies for varied semifinished and finished jute products.

Source:  The post is based on the article “The recent woes of the jute industry in West Bengal” published in The Hindu on 2nd May 2022.