The recent woes of the jute industry in West Bengal
- Member of Parliament (MP) from Barrackpore constituency in West Bengal met the Union Textile minister about issues concerning jute farmers, workers and the overall jute industry.
- The Barrackpore MP had earlier written to West Bengal CM, seeking her intervention into the “arbitrary decision” of capping the price for procuring raw jute from the mills.
- He was referring to the Office of the Jute Commissioner (JCO)’s September 30 notification mandating that no entity would be allowed to purchase or sell raw jute at a price exceeding ₹6,500 per quintal.
- Mills are now procuring raw jute at prices higher than what they are selling them at after processing.
- 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, as the executive stated, this reached his mill at ₹7,200 per quintal, that is, ₹700 more than the ₹6,500 per quintal cap for the final product.
- Though the Union government has come up with several schemes to prevent de-hoarding, the executive believes the mechanism requires a certain “systematic regulation”.
What happened to the supply?
- The occurrence of Cyclone Amphan in May 2020 and the subsequent rains in major jute producing States affected the production.
- These events led to lower acreage, which in turn led to lower production and yield compared to previous years.
- Additionally, as the Commission for Agricultural Costs and Prices (CACP) stated in its report, this led to production of a lower quality of jute fibre in 2020-21 as water-logging in large fields resulted in farmers harvesting the crop prematurely.
- Acreage issues were accompanied by hoarding at all levels – right from the farmers to the traders.
Where does India stand in comparison to Bangladesh?
- As per the Food and Agriculture Organisation (FAO), 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-fourth 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 and varieties suitable for the country’s agro-climate.
- Further, as the CACP report stated, Bangladesh provides cash subsidies for varied semi-finished and finished jute products.
- Hence, competitiveness emerges as a challenge for India to explore export options in order to compensate for the domestic scenario.
What is at stake?
- The jute sector provides direct employment to 3.70 lakh workers in the country.
- It supports the livelihood of around 40 lakh farm families, closure of the mills is a direct blow to workers and indirectly, to the farmers whose production is used in the mills.
- West Bengal, Bihar and Assam account for almost 99% of India’s total production.
Prelims Take Away
- Cyclone Amphan
- Conditions for Jute Cultivation