The Union textiles ministry has proposed to dilute the mandatory jute packaging order mandated under Jute Packaging Materials Act (JPMA), 1987. The legislation provides for 100% reservation for jute bags for packing food grains and sugar by government procurement agencies.
The ministry has favoured a minimum reservation of 90% for food grains and 20% for sugar for 2014-15 jute year, a move if implemented could spell Rs 4000 crore loss for the industry. In 2013-14, the Centre had fixed mandatory packaging in jute bags at 90% for food grains and 20% for sugar.
The beleaguered jute industry has taken strong exception to the move.
“The textile ministry’s dilution plan is aimed at killing the jute industry. There is no open market for the jute mill owners. The dilution of the order prescribed by the ministry would deprive the jute industry of a market worth Rs 4000 crore. The ministry is proposing dilution even though the industry has sufficient capacity to meet the demands of government procurement agencies”, said Sanjay Kajaria, a leading jute mill owner and former chairman of Indian Jute Mills Association (IJMA).
The dilution plan has been arrived at keeping in view of the performance and production trends of sacking bags of the jute industry over the years. The dilution move is also aimed at gradually decreasing the dependence of jute mills on sacking and persuade them to go for product diversification.
The huge dilution in sugar has been proposed since jute bags are not preferred by the user agencies due to reasons such as contaminants like jute fibre, jute batching oil, moisture pick up, mildew and leakage of sugar.
The textiles ministry has assessed the total kharif season requirement of jute bags for packing food grains at around 1.39 million bales (or 465,000 tonne). Total government requirement for jute bags has been pegged at approximately 2.39 million bales.
The ministry observed that production of reserved products over the past few years has continually increased the demand for packaging even while the total production pf jute goods has remained stagnant.
This has resulted in mills diverting capacities from non-sacking products such as hessian to sacking with the mills giving scant attention to investments in technology upgradation for diversification to higher value added products.