The recent woes of the jute industry in West Bengal

Contact Counsellor

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.

Current Issues

  • 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.

Exam track

Prelims Take Away

  • Jute
  • Cyclone Amphan
  • CACP
  • Conditions for Jute Cultivation
  • FAO