Jute Industry

• Mills are procuring raw jute at prices higher than what they are selling them at after processing. A September 30, 2021, notification mandated that no entity would be allowed to purchase or sell raw jute at a price exceeding ₹6,500 per quintal.

• The cyclone Amphan in May 2020 and the subsequent rains in major jute producing States aggravated the crisis.
• Bangladesh provides cash subsidies for varied semi-finished and finished jute products. Hence, the competitiveness emerges as a challenge for India to explore export options in order to compensate for the domestic scenario

What is the problem? 

• Mills are procuring raw jute at prices higher than what they are selling them at after processing. 
• Mills do not acquire their raw material directly from the farmers, but instead through intermediaries. 
• As a standard practice, the middlemen charge mills for their services, which involves procuring jute from farmers, grading, bailing and then bringing the bales to the mills. 
• 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.
• 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 supply? 

• The situation particularly worrisome recently was the occurrence of Cyclone Amphan in May 2020 and the subsequent rains in major jute producing States. 
• 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 is jute used? 

• Bulk of the final jute produced is used for packaging purposes. 
• The provisions of the Jute Packaging Material (Compulsory use in Packing Commodities) Act, 1987 or the JPM Act mandate that 100% production of foodgrains and 20% sugar production must be packaged in jute bags. 
• The share of jute used for sacks, therefore, increased from 67.9% for the 2010-11 to 78.3% in 2020-21. 
• On the other hand, jute used for manufacturing other products (such as furnishing materials, fashion accessories, floor coverings or varied applications in paper and textile industries) has declined from 15.5% to 9.7% during the same period. 
• 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 related to retting, 
• Farm mechanisation, 
• Lack of availability of certified seeds and varieties suitable for the country’s agro-climate. 
• The increased availability of synthetic substitutes is further bothering the demand for jute domestically. 
• Further, as the CACP report stated, Bangladesh provides cash subsidies for varied semi-finished and finished jute products. Hence, the competitiveness emerges as a challenge for India to explore export options in order to compensate for the domestic scenario. 

What is at stake? 

As the jute sector provides direct employment to 3.70 lakh workers in the country and 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.

Climatic Conditions for Jute Cultivation

For jute cultivation, a warm and humid climate, plenty of rainfall, and well-drained, loamy soils are required. The interesting thing about the growth of jute is that fertilizers and pesticides are hardly needed.

• For good cultivation, temperatures ranging from 25-30 °C and relative humidity of 70 percent-90 percent are favourable.
• For jute cultivation, river basins or alluvial or loamy soils are best.
• Jute cultivation in red soils which includes a greater dose of manure, and it is best for cultivation in the PH range between 4.8-5.8.
• Known as the ‘golden fibre’ jute is one of the longest and most used natural fibre for various textile applications.
• Retting of Jute is a process in which the tied bundles of jute stalks are immersed in water by which fibres get loosened and separated from the woody stalk.
• World’s leading jute producing countries are India , Bangladesh , China and Thailand . India is the world’s largest producer of raw jute and jute goods , contributing to over 50% and 40% respectively of global production.
• The cultivation of jute in India is mainly confined to the eastern region of the country . The jute crop is grown in seven states – West Bengal , Assam , Odissa , Bihar , Uttar Pradesh , Tripura and Meghalaya . West Bengal alone accounts for over 50% of the total raw jute production.
• To promote and popularize jute diversification work, National Jute Board, Ministry of Textiles, acts as the apex body for promotion of the products in India and abroad.
• The first jute mill was established at Rishra (Bengal – now in West Bengal), on the river Hooghly near Calcutta in the year 1855, by Mr. George Aclend. In 1959, the first power driven weaving factory was set up.