In recent news, the Cabinet Committee on Economic Affairs, under the leadership of the Prime Minister, has sanctioned a directive requiring 100% of foodgrains and 20% of sugar to be compulsorily packaged in jute bags. The decision is anticipated to catalyse the diversification of the jute industry..
The Implications of Extended Norms
The adopted decision stipulates that the initial 10% of orders placed for jute bags used in packing food grains will be done via a reverse auction on the GeM portal. This method is predicted to spark a regime of price discovery gradually. In this system, sellers compete for business from the buyer, typically driving down prices as each one tries to undercut the others.
Expanded Scope Under Statutory Provision
The government has broadened the compulsory packaging norms under the Jute Packaging Materials (Compulsory Use in Packing Commodities) Act, also known as the JPM Act, established in 1987. The act demands that the government consider and provide for obligatory use of jute packaging material in the supply and distribution of certain commodities.
Role of Government in Jute Industry
The jute industry heavily depends on the government sector, which purchases jute bags worth over Rs. 7,500 crore every year to pack foodgrains. This effort ensures core demand for the jute sector and sustains the livelihood of workers and farmers who depend on it. Roughly, 3.7 lakh workers and many lakh farm families rely on the jute sectors. The government has therefore been diligently working to develop the jute sector by improving the quality and productivity of raw jute, diversifying the sector, and maintaining a strong demand for jute products.
Benefits of the New Mandate
This move is projected to benefit farmers and workers primarily in the Eastern and North-Eastern regions of India, particularly in states like West Bengal, Bihar, Odisha, Assam, Andhra Pradesh, Meghalaya, and Tripura. It will promote domestic production of raw jute and jute packaging material in India, ensuring self-reliance in line with Aatmanirbhar Bharat.
Government Initiatives in Jute Industry Development
Several initiatives have been launched to improve and promote the jute industry. These include Jute-Improved Cultivation and Advanced Retting Exercise (Jute ICARE), Jute SMART, Definitive Anti-Dumping Duty, Incentive Scheme for Acquisition of Plants and Machinery, and collaboration between the National Jute Board and the National Institute of Design.
Jute Production in India
The National Jute Board acts as an apex body to promote jute products both domestically and internationally. Jute is included in the country’s Minimum Support Price (MSP) regime. With a temperature requirement between 25-35°C and rainfall of around 150-250 cm, jute thrives in well-drained alluvial soil. The top jute-producing states in India are West Bengal, Bihar, Assam, Andhra Pradesh, and Odisha, largely due to the fertile grounds of the Ganga-Brahmaputra delta.
As far as global standings go, India tops the list of jute-producing countries, followed by Bangladesh, China, and Thailand. India remains the largest producer of raw jute and jute goods, contributing to over 50% and 40% respectively of global production. Known as the golden fibre, jute is one of the longest and most used natural fibre for various textile applications. However, due to its high cost, it has been losing market to synthetic fibres and packing materials, particularly nylon.
