Jute industry in crisis as Govt orders dry up

Amiti Sen New Delhi | Updated on July 13, 2014

Textiles Ministry to ask Punjab to honour commitment on jute procurement

The Textiles Ministry will hold talks with the Punjab Government to convince it to bail out the country’s crisis-stricken jute industry.

The industry has taken a further hit due to the State not honouring its sourcing commitments this production season.

Santosh Gangwar, Minister of State for Textiles (independent charge), has assured jute manufacturers that he will meet Punjab Chief Minister Prakash Singh Badal to find out why the State did not place any orders for jute bags in June and July despite prior commitments.

“Punjab sourced only 2 lakh bales of jute bags in May despite committing to source 7 lakh between May and October in the meeting convened by the Food Ministry for finalising the Kharif procurement plan for food bags,” Raghavendra Gupta from the Indian Jute Manufacturers Association (IJMA) pointed out.

The jute industry, predominantly in West Bengal, is in a state of panic after the recent killing of HK Maheshwari, CEO, North Brook Jute Mill, by workers, following disagreement over reducing the working days of the mill.

“It’s a difficult situation. Mills are forced to lay off workers as there is not enough demand. It is creating unrest and leading to mob violence,” Gupta said.

Source of livelihood

The jute industry employs about 4,00,000 workers whose livelihood is threatened by the drying up of orders.

Things started turning ugly for jute millers with the watering down of the June Packaging Material Act (JPMA), which mandates the use of the material for packaging of sugar and foodgrains by the UPA Government over the last two years. Demand for bags has taken a sharp hit since then.

States are now increasingly using plastic bags to pack agricultural produce, especially sugar.

According to the IJMA, the jute industry lost ₹1,000 crore of business in 2013-14, as the sugar industry was allowed to pack 80 per cent of its requirement in non-jute products. Gupta said orders completely dried up from the Government in the last six months, as there was an over-estimation of demand for bags by the Food Ministry in 2012-13, which led to a huge carryover of stocks the following year.

Punjab is an important State for the jute industry as half of the procurement of jute bags done by the Food Corporation of India is on behalf of the State.

The Government procures about 40 per cent of production of jute mills.

According to the IJMA, 115 lakh bales of raw jute are expected to be available in the country in the jute year 2014-15, and due to the installed production capacity, jute bags of about 18 lakh tonnes can be supplied under the JPM Act.

Published on July 13, 2014

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