Key meeting on jute crisis
The Bengal government has convened a meeting on jute next week amid concerns over the deterioration in the quality of the fibre and distress sale by farmers.
- Published 21.10.17
Calcutta: The Bengal government has convened a meeting on jute next week amid concerns over the deterioration in the quality of the fibre and distress sale by farmers.
The central government, in December 2015, had revised the specifications for jute bags procured for mandatory packaging by government agencies. As a result, light bags of 580 grams replaced heavy bags of 665 grams.
These light bags require a higher grade of raw jute, which is in short supply, putting the mills in a spot.
According to industry sources, Murshidabad and Nadia districts, which account for 60 per cent of the total production in Bengal, have seen a significant fall in acreage and quality between 2007 and 2017.
Aggregate data show production in south Bengal down to 9 lakh bales this year from 15 lakh bales in 2007.
The demand for light bags has resulted in a surplus of 35 lakh bales of lowgrade jute and a shortage of 10 lakh bales of the higher grade.
Farmers are now resorting to the distress sale of lowgrade jute, a situation made worse by a bumper crop last year.
Sources said the high-level meeting could explore the possibility of mills producing bags that requires at least 50 per cent of the lower grade fibre.
At the same time, the idea to create a buffer stock of 10 lakh bales through the Jute Corporation of India to tackle the demand-supply mismatch could also be explored. A buffer stock of such size could require capital to the tune of Rs 630 crore.
The government could also explore whether gunny bags could be directly procured from the Jute Corporation of India in order to get full reimbursement from the Centre. At present, rice millers buy new and old gunny bags from local markets themselves and submit the bills for reimbursement.