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G. Srinivasan

New Delhi , July 29

THE Government has restored the 100 per cent compulsory reservation through jute packaging by the foodgrains and sugar industry. The new order is to be effective from August 1.

Sources in the Government told Business Line here that this follows the decision by the Cabinet Committee on Economic Affairs (CCEA) on July 25. The decision reverses the Textile Ministry's September 28, 2004 notification, stipulating that foodgrains and sugar be compulsorily packed in jute bags to the extent of 100 per cent and 90 per cent respectively of their total production during the current jute year ending June 30, 2005.

The reason for the latest decision to make 100 per cent packaging reservation for jute by foodgrains and sugar is the ecological justification the golden fibre has over plastics and synthetics, the sources said adding that jute was easily bio-degradable and thus environment-friendly.

Jute bags also lend themselves to reuse and multiple uses, whereas plastics and synthetics bags contribute to eco-degradation.

However, plastic manufacturers and sack-woven industry representatives are upset over the decision of the Government to enforce the Jute Packaging Materials (Compulsory Use in Packing Commodities) Act 1987 which would drive many of the small plastic and sack-woven manufacturers out of business.

They said the original Act is being revived now by the United Progressive Alliance(UPA), as it is drawing outside support from the Left parties.

They also recalled that the NDA government was contemplating to put in place a progressive dilution of the compulsory Jute Packaging Order through an inter-ministerial Committee on the basis of the recommendations of the Standing Advisory Committee. That Committee also drew a roadmap for the progressive dilution of the packaging Act. But after the advent of the UPA Government, the Government had abandoned the proposal of the previous government and, instead, began progressively strengthening the original Act.

An internal study made by the Textile Ministry reveals that when there was 90 per cent compulsory packing by sugar industry which was using 14.4 million tonnes of jute bags, 1.4 million bags were provided by the synthetic and sack-woven segment which caused the jute industry a loss of Rs 45 crore a year. Now with the 100 per cent reservation for jute packaging by sugar industry, the jute sector would benefit as the entire Eastern region, particularly West Bengal, supports nearly four million farm families by providing direct employment to 2.6 lakh industrial workers and livelihood to another 1.4 lakh people in the tertiary sector and allied activities.

Official sources recalled that in the National Jute Policy unveiled in April 2005 categorically said: "The Government will ensure a reasonable market for jute products by continuing the ongoing policy of reserving foodgrains and sugar to be packed in packaging material made from jute. The quantum of reservation will be as approved by the Government from time to time".

The sources further stated that the House panel report in March 2005 under the Chairmanship of Mr P.K. Vasudevan Nair (CPI-M) also cautioned the Government against any dilution of the compulsory reservation packaging Act as it might adversely affect the interest of the industry and the workers employed by it.

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