Calcutta, May 3: The jute industry fears there will be a further dilution of the Centre's mandatory packing rules for foodgrain and sugar that will severely hurt the sector and benefit the plastic players.

The department of food and public distribution has recommended compulsory use of jute for packaging 75 per cent of grains down from 90 per cent under the Jute Packaging Materials (Compulsory Use in Packaging Commodities) Act 1987.

The standing advisory committee that recommends norms for use of jute bags for jute year (July-June) is set to take up this recommendation soon.

The department has also recommended full exemption for sugar from mandatory packaging norms. So far, 20 per cent of sugar had to be packed in jute bags.

The Centre's logic behind this dilution stems from the inadequate supply of jute bags from mills.

Textile ministry officials said the orders of jute bags are required to be placed in advance and if the supply is not according to the demand packaging is affected.

Jute industry representatives, however, said this year production was adequate for smooth supply unlike last year when there were shortages.

"Any dilution will hit the industry hard, especially in Bengal. Close to 80 per cent of raw jute produced and 90 per cent of jute mills are located in the state," a jute mill owner said.

The proposed dilutions are in line with the recommendation of the Commission for Agricultural Costs and Prices (CACP) as well. "There has been demand for 100 per cent mandatory packing of foodgrains and sugar in bags but production of jute has not kept pace with increase in demand for sacking and other value-added products," the CACP said in its report on price policy.

"If 100 per cent packaging for both foodgrains and sugar is made mandatory as proposed by Indian Jute Mills Association and farmers, the supply will fall short of the demand. It would also not encourage jute industry to develop and diversify into high-value products," it added.

CACP had also recommended dilution in compulsory packaging in a time bound manner so that some raw jute can be used for value-added products.