West Bengal’s jute industry barely hanging by a thread

News: Recently, the West Bengal’s jute industry is facing a severe crisis. Several mills (like Reliance Jute Mill, the Gondolpara Jute Mill etc.) have announced the temporary suspension of operations this year.

Status of jute industry in the West Bengal

According to the Indian Jute Mills Association (IJMA), there are about 93 jute mills in India, of which 70 are in West Bengal. Of the 70, 54 mills are located in the three districts of North 24 Parganas (25), Howrah (15) and Hooghly (14).

There are around 3.5 lakh workers associated with the entire supply chain of the industry ranging from the production and trade of the golden fibre, production of the finished product among others.

What are the factors behind the current crisis?

The recent crisis began when the heavy increase in maximum price of raw jute by the Office of the Jute Commissioner. This led to a fall in procurement and mills decided to suspend work.

There have hardly been any protests by trade unions in a State. There have been no demands that the mills open, nor have there been strikes. In fact, it is argued that there is no trade union left in the state.

At present, the jute mill owners in the West Bengal jute industry are already incurring heavy losses.

Non-implementation of the Tariff Commission’s report for a fair price of B. Twill jute bags. It has caused a huge loss to the industry.

The jute mills are legally bound to supply jute bags to the government, for which they are reimbursed at the notified rate. Therefore, the jute industry has no other alternative but to sell the finished products at a loss.

According to a report of the Commission for Agricultural Costs and Prices (CACP), 2022-2023, India’s jute production has been declining during the last decade. There has been a decrease in acreage due to shift in cropping pattern to crops such as paddy, maize, groundnut, and sesame.

The demand for jute products is declining due to increasing demand for various types of synthetic substitutes.

The farmers also expressed concern about extreme climate conditions. This is impacting jute cultivation.

What are the impacts of the jute industry crisis?

It is leading to the loss of livelihood of workers, owners and farmers. The Mill worker’s family are facing hunger and are forced to take credit for their survival.

The century-old jute mills on both banks of the river Hooghly has become totally dysfunctional.

The people of this region are witnessing terrible riots and intense political battles.

Mill workers living in the mill quarters have been facing the issue of irregular power supply ever since the mill closed.

Several retired employees have not received their PF dues because the management did not deposit its share.

The closed jute mills are witnessing reverse migration, with workers from Bihar and Uttar Pradesh going back to their homes after the mills closed.

The Way Forward

The notified rate at which jute is purchased should be increased. If the government does not agree to pay more for the jute bags, the idea of switching over to cheaper alternatives may be a viable option.

The Government of India (GOI) has been considering continuing anti-dumping duties against imports of jute products from Bangladesh.

Source: The post is based on an article “West Bengal’s jute industry barely hanging by a thread” published in the “The Hindu” on 14^th May 2022.