The recent woes of the jute industry in West Bengal

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Last Updated03/05/2022

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”.

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.

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.

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.

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