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The Union government ordered a few weeks ago that 100% of food grains would be packed in jute sacks. But this is not a new thing. Under the Jute Packaging Materials (Compulsory Use in Packing Commodities) Act, 1987, the government specified the commodities and the extent to which they were mandatorily required to be packed in jute packaging materials.

 The Government of India is the biggest purchaser of jute products. The Food Corporation of India and many state food departments are using jute bags to pack food. The price of jute bags is fixed by the government in such a way that there have always been profit margins for the producers. Even 20% of the sugar produce is to be mandatorily packed in jute sacks.

But in spite of all these steps, the industry is unable to meet all the requirements of the government. Therefore, a lot of food items have to be packed in plastic materials. Recently, the government of West Bengal was short of supply of jute bags for its food department. Chief Minister Mamata Banerjee took official steps and urged the Jute Corporation of India to look into the matter. Many other states also reportedly faced the similar problem. Naba Dutta, Secretary, Nagarik Mancha, an organisation that deals with social and economic issues told that the jute industry was unable to meet more than 40% of the total demand. But Debashis Ray, Director General, Indian Jute Millers’ Association (IJMA) told that the industry has been able to supply more than 70% of the demand. 

Jute industry in India

Mechanised jute spinning and weaving started near Kolkata and George Acland’s mill started it in 1855. Between 1869 and 1913, the number of mills increased from 5 to 64 and employment increased from around 10,000 to 215,000. Until World War I, the jute industry was entirely owned and managed by the Europeans. 

India is the world's biggest producer of jute followed by Bangladesh. Jute is primarily grown in West Bengal, Odisha, Assam, Meghalaya, Tripura and Andhra Pradesh. At present there are 70 jute mills in the country out of which around 60 are in West Bengal - along both banks of the Hooghly river. About four lakh labourers are involved in this industry and more than half of that labour force is employed in West Bengal only. Jute is the second most abundant natural fibre in the world.

Basic problem of the jute industry

In early July, 2019, Union Textiles Minister, Smriti Irani said in reply to a question in the Lok Sabha that the Indian jute industry has no crisis. Antidumping duty has been imposed on jute products from Bangladesh and Nepal, subsidy has been provided in different heads in the industry, secure demand of jute products has been ensured from the government and assured MSP of jute has helped the industry to run well.

The industry is potentially very strong. But at the same time, it has been going in such a way that it has failed to supply even that demand that is there in the market. Additionally, if the industry poises itself well, the international market can be explored as well. But what are the problems?

First, the industry is not as modernised as required. It is known that only about half a dozen mills like the Gloster Jute Mill, the Ganges Jute Mill, the Hukum Chand Jute Mill, the Howrah Jute Mill and the Cheviot Jute Mill are modernised. So productivity of most of the mills is low. It is also said that most of the mills are run on lease or on a sub lease basis. So, the purpose of these millers is to earn as much money as can be reaped from these production units. So, modernisation or enhancement of productivity or any other steps for development of the mills are not pursued judiciously. In many cases, they are not interested or even entitled to have any long-term plan of development of those mills. But Roy told BE that it is wrong to think that owners are not entitled to take on development plans. At present, a lot of development plans have been taken by most of the mill owners and its result will be public within a short span of time.

Secondly, the workers are in a precarious condition. The biggest number of industrial workers in the state are involved in this sector. Out of this, only a small portion are registered workers who earn comparably better wages - `400 or more per day and enjoy some statutory benefits. Rest are casual workers who get only about `150 per day with no statutory benefits.

Declining jute cultivation and high fluctuation of jute prices

In 2010-11, the area of jute cultivation in West Bengal was nine lakh hectares. But it has come down to 5.78 lakh hectare in June 2020, according to AK Palit, Secretary, The Jute Balers’ Association. This is because jute cultivation has been becoming increasingly un-remunerative. It is known that many jute cultivators have switched from jute to boro-paddy, particularly in Hooghly and Howrah districts – which were the most important jute growing districts in West Bengal. Palit told that price fluctuation is very high in this sector. Many times, it becomes increasingly difficult for jute growers to secure even the cost of cultivation in jute planting. Palit added that this year, the jute prices were remunerative but in the last three years, prices of jute were not favourable for the cultivators. In 2019-20, the average price of TD5 jute in Kolkata was `4642 per quintal. Those had been `4365 and `3694 per quintal in 2018-19 and 2017-18 respectively. Though there has been MSP, it is known that only 5% of jute has been sold at MSP in the last few years.

According to Palit, the cost of cultivation of jute is about `13,000 to 14,000 per bigha (1 bigha is equal to about 0.62 acre). One hectare produces, under normal weather conditions, about 3.5 quintal of jute. That means about `3,900. This year MSP has been `4225 per quintal of TD5 jute at agency houses. Ashis Banerjee, Minister in Charge for Agriculture, West Bengal, told BE that unremunerative MSP and JCI’s lack of interest in purchasing jute is the main cause of declining jute cultivation in West Bengal.  

Way forward to revive jute industry

Ray said that there would be some changes in the jute industry. Several plans have been taken. First, the industry is heavily dependent on government purchase of jute products. But unless the customer base is increased, mill owners will not find it worthwhile to modernise mills and increase productivity. Secondly, efforts have been taken to increase the productivity of jute. If properly implemented, jute productivity can be increased significantly. Thirdly, the labour productivity can be increased only when special training for labourers for jute related products is arranged. That is why skill development centres are being built. The West Bengal government is also planning on setting up a Jute Industry Skill Council and a jute industry management institute under IJMA.